The Retail Pilot

In this episode of The Retail Pilot, host Ken Pilot sits down with Alex and Mike Faherty, co-founders of Faherty Brand, to discuss their business journey, recent successes, and future plans.

Key Topics Discussed:

• Faherty's performance during Black Friday and Cyber Monday 2024

• The brand's growth trajectory and end-of-year projections

• Expansion of retail stores and focus on in-store experiences

• Product development and bestselling items

• Marketing strategies and collaborations

• Tech innovations and simplification efforts

• Team building and company culture

• Preparing for potential tariff changes in 2025

• Exciting plans and collaborations for 2025

Highlights:

• Faherty now operates 72 stores, with plans to open more in 2025

• The brand is doing "hundreds of millions" in revenue

• Focus on hero products like the Legend Shirt and Stretch Terry Pants

• Emphasis on creating a boutique feel while making shopping easier for customers

• Upcoming collaborations with a surf club in Ghana and big wave surfers in Portugal

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In this episode of The Retail Pilot, Ken Pilot welcomes back Stephen Yalof, President and CEO of Tanger, Inc.

With over 25 years of experience in the commercial real estate industry, Stephen shares insights into Tanger's growth strategies, the evolution of retail spaces, and how the company is adapting to changing consumer behaviors. From expanding into full-price lifestyle centers to enhancing customer experiences through digital innovation and loyalty programs, Stephen provides a comprehensive look at Tanger's journey and future direction.

Key Topics Discussed

1. Tanger’s Recent Successes Performance Highlights: Tanger achieved a 4.3% increase in net operating income (NOI) and a 97.4% occupancy rate. The company executed 543 leases covering 2.6 million square feet over the past year. Expansion Efforts: Recent acquisitions include The Promenade at Chenal in Little Rock, Arkansas, which features the only Apple Store in the state.

2. Growth Strategy Diversification: While maintaining its core outlet business, Tanger is expanding into full-price open-air lifestyle centers that include specialty stores, grocery anchors, and other amenities. Acquisition Focus: Stephen emphasized the importance of acquiring high-quality properties in strategic markets to leverage existing regional management teams.

3. Enhancing Customer Experience Tanger Club Loyalty Program: A tiered membership program offering discounts and perks for shoppers. Members can choose between free or paid memberships ($20 annually) for additional benefits. Digital Integration: Introduction of QR codes for real-time offers and digital savings passports, replacing outdated coupon books. Amenities and Entertainment: Investments in food offerings, gathering spaces, and entertainment options like pickleball courts to create a more engaging shopping experience.

4. Industry Trends Blending Physical and Digital Retail: Tanger is exploring e-commerce integration as part of its long-term strategy while using digital tools to enhance in-store experiences. Health & Beauty Brands: Increased presence of brands like Sephora and Ulta in outlet environments, offering regular-priced products alongside experiential services.

5. Leadership and Team Building Talent Development: Stephen emphasizes hiring complementary skill sets to address organizational blind spots and promoting from within to keep employees motivated. Communication Practices: Regular town halls, employee resource groups (ERGs), and an intranet ensure transparency and engagement across the organization.

6. Reflections on Leadership Lessons Learned: Stephen highlights the importance of "failing fast" to pivot quickly when strategies don’t work. He also stresses the value of building a strong team aligned with company goals.

Notable Quotes "Fail fast—if something doesn’t work, pivot quickly and move on." – Stephen Yalof "We’re lifestyle-izing our portfolio by adding food, beverage, amenities, and entertainment to enhance the customer experience." – Stephen Yalof "Our loyalty program is about understanding our customers better and providing them with personalized value." – Stephen Yalof

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Rent the Runway 2.0 - Redefining the Future of Fashion with Jennifer Hyman

Jennifer Hyman, co-founder and CEO of Rent the Runway, joins Ken Pilot to discuss the company's journey over the past 15 years.

Jennifer Hyman is the Co-Founder and CEO of Rent the Runway, a company that is disrupting the trillion-dollar fashion industry with the world’s first and largest shared designer closet. She has led the company for 15 years through all stages of growth, from inception in 2009 to a scale of more than 3M lifetime customers. Jennifer took the company public in 2021, making her the first woman ever to IPO a company with an all-female executive suite and the 30th woman ever to IPO a company. She has been honored on the TIME Top 100 Most Influential People List and the CNBC Disruptor List for 5 out of 10 years. She also serves on the Board of Directors of The Estée Lauder Companies and Zalando.

Rent the Runway's Origins and Growth

• Hyman pitched the concept to Diane von Furstenberg 48 hours after having the idea

• The company now rents about $5 billion worth of designer clothing annually

• Rent the Runway works with over 1,000 designers and has had 100% brand retention over 15 years

Business Model and Profitability

• The company has focused on becoming capital-light, with revenue sharing agreements with brands.

• Rent the Runway has more than doubled its margins over the last few years.

• The goal is to reach free cash flow breakeven.

Challenges and Resilience

• COVID-19 presented significant challenges for the business.

• Hyman emphasizes the importance of resilience and staying in the game.

Marketing and Customer Acquisition

• The company is refocusing on top-of-funnel marketing activities.

• Rent the Runway is leveraging its community and introducing new initiatives like the "Icons" program.

  
  

Physical Retail and Partnerships

• Hyman expresses interest in partnerships with retailers like Sephora, Ulta, or Zara.

• Previous partnerships with Neiman Marcus drove significant foot traffic.

Industry Insights

• Hyman discusses the disruption in the fashion industry, particularly from companies like Shein and Amazon.

• She notes the changing perception of brand value among consumers. T

• echnology and AI Rent the Runway is exploring AI applications in various areas, including photography, customer service, and search algorithms.

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Jennifer Hyman, co-founder and CEO of Rent the Runway, joins Ken Pilot to discuss the company's journey over the past 15 years.

Rent the Runway's Origins and Growth

• Hyman pitched the concept to Diane von Furstenberg 48 hours after having the idea
• The company now rents about $5 billion worth of designer clothing annually
• Rent the Runway works with over 1,000 designers and has had 100% brand retention over 15 years

Business Model and Profitability

• The company has focused on becoming capital-light, with revenue sharing agreements with brands.
• Rent the Runway has more than doubled its margins over the last few years.
• The goal is to reach free cash flow breakeven.

Challenges and Resilience

• COVID-19 presented significant challenges for the business.
• Hyman emphasizes the importance of resilience and staying in the game.

Marketing and Customer Acquisition

• The company is refocusing on top-of-funnel marketing activities.
• Rent the Runway is leveraging its community and introducing new initiatives like the "Icons" program.

Physical Retail and Partnerships

• Hyman expresses interest in partnerships with retailers like Sephora, Ulta, or Zara.
• Previous partnerships with Neiman Marcus drove significant foot traffic.

Industry Insights

• Hyman discusses the disruption in the fashion industry, particularly from companies like Shein and Amazon.
• She notes the changing perception of brand value among consumers.

Technology and AI

• Rent the Runway is exploring AI applications in various areas, including photography, customer service, and search algorithms.

Episode Summary:

In this episode of The Retail Pilot, Ken Pilot welcomes back Stephen Yalof, President and CEO of Tanger. With over 25 years of experience in the commercial real estate industry, Stephen shares insights into Tanger's growth strategies, the evolution of retail spaces, and how the company is adapting to changing consumer behaviors. From expanding into full-price lifestyle centers to enhancing customer experiences through digital innovation and loyalty programs, Stephen provides a comprehensive look at Tanger's journey and future direction.

Key Topics Discussed

1. Tanger’s Recent Successes

• Performance Highlights: Tanger achieved a 4.3% increase in net operating income (NOI) and a 97.4% occupancy rate. The company executed 543 leases covering 2.6 million square feet over the past year.
• Expansion Efforts: Recent acquisitions include The Promenade at Chenal in Little Rock, Arkansas, which features the only Apple Store in the state.

2. Growth Strategy

• Diversification: While maintaining its core outlet business, Tanger is expanding into full-price open-air lifestyle centers that include specialty stores, grocery anchors, and other amenities.
• Acquisition Focus: Stephen emphasized the importance of acquiring high-quality properties in strategic markets to leverage existing regional management teams.

3. Enhancing Customer Experience

• Tanger Club Loyalty Program: A tiered membership program offering discounts and perks for shoppers. Members can choose between free or paid memberships ($20 annually) for additional benefits.
• Digital Integration: Introduction of QR codes for real-time offers and digital savings passports, replacing outdated coupon books.
• Amenities and Entertainment: Investments in food offerings, gathering spaces, and entertainment options like pickleball courts to create a more engaging shopping experience.

4. Industry Trends

• Blending Physical and Digital Retail: Tanger is exploring e-commerce integration as part of its long-term strategy while using digital tools to enhance in-store experiences.
• Health & Beauty Brands: Increased presence of brands like Sephora and Ulta in outlet environments, offering regular-priced products alongside experiential services.

5. Leadership and Team Building

• Talent Development: Stephen emphasizes hiring complementary skill sets to address organizational blind spots and promoting from within to keep employees motivated.
• Communication Practices: Regular town halls, employee resource groups (ERGs), and an intranet ensure transparency and engagement across the organization.

6. Reflections on Leadership

• Lessons Learned: Stephen highlights the importance of "failing fast" to pivot quickly when strategies don’t work. He also stresses the value of building a strong team aligned with company goals.

Notable Quotes

• "Fail fast—if something doesn’t work, pivot quickly and move on." – Stephen Yalof
• "We’re lifestyle-izing our portfolio by adding food, beverage, amenities, and entertainment to enhance the customer experience." – Stephen Yalof
• "Our loyalty program is about understanding our customers better and providing them with personalized value." – Stephen Yalof

Connect with Us

• Stay updated on Tanger’s latest developments:Website: Tanger
• Follow The Retail Pilot for more insightful conversations with industry leaders!

In this episode of The Retail Pilot, host Ken Pilot sits down first in a Pre-Flight conversation with Simeon Siegel, Senior Retail Analyst for BMO Capital Markets, to discuss the state of the Retail market both post-election and leading into the holiday season.

For the main Flight, Ken speaks with Rachelle Hruska MacPherson, founder of the fashion brand Lingua Franca. Rachelle shares the unexpected journey that led her to create a company known for its hand-embroidered cashmere sweaters and socially conscious messaging.

Origins of Lingua Franca

• Rachelle started the company unexpectedly in 2016 while dealing with stress from her previous business
• The idea came from embroidering "booyah" on an old sweater as a therapeutic exercise
• Early success came from a viral "I Miss Barack" sweater after the 2016 election

Business Growth and Model

• Lingua Franca offers custom embroidery on cashmere and cotton items
• The company has expanded into ready-to-wear clothing and collaborations
• Current revenue is under $30 million, with 60-70% from direct-to-consumer sales

Product and Pricing

• Cashmere sweaters with embroidery retail for around $380
• Cotton items start at $150, opening up a new market segment
• Custom embroidery is available in stores and through an online customizer

Marketing and Collaborations

• Growth has been largely organic, with minimal traditional marketing
• Collaborations with celebrities, artists, and brands have been key to expansion
• Upcoming collaborations include Wicked and Gilmore Girls

Challenges and Future Plans

• Rachelle discusses the difficulties of scaling while maintaining brand authenticity
• She emphasizes the importance of product quality and customer service
• The company is exploring new marketing strategies, including digital advertising

Personal Insights

• Rachelle shares her favorite travel destinations and TV shows
• She discusses the importance of mentorship and community in the fashion industry

The episode provides an in-depth look at how Lingua Franca has grown from a personal project into a socially conscious fashion brand, navigating the challenges of scaling while maintaining its core values and unique positioning in the market.

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In this episode of The Retail Pilot, host Ken Pilot welcomes Jan Rogers Kniffen, CEO of J Rogers Kniffen Worldwide and retail industry expert, to discuss the current state and future of retail. Key Topics Discussed: Post-Election Retail Bounce

• Jan predicts a post-election retail bounce, as seen in previous presidential election years
• Discretionary retail is currently running at zero inflation, making it attractive to consumers

Fourth Quarter Outlook

• Despite potential headwinds, Jan expects a strong fourth quarter
• Forecasts 3.5-4% sales growth, similar to last year
• Believes discretionary goods will perform well due to their perceived value compared to inflating services

Walmart vs. Target

• Walmart is outperforming Target significantly
• Walmart is attracting higher-income customers, traditionally Target's demographic
• Walmart's focus on in-store experience and competitive pricing is paying off

Off-Price Retail Sector

• TJ Maxx ranked as the fifth-best retailer in America by Jan
• Concerns about over-saturation in the off-price sector
• Potential challenges for off-price retailers as the market matures

Department Store Future

• Predicts most department stores will go private by the end of 2026
• Cites lower interest rates and increased real estate values as factors facilitating buyouts
• Mentions Nordstrom, Macy's, and Kohl's as potential candidates for privatization

Tariffs and Manufacturing

• Discussion on the impact of potential tariffs, especially on goods from China
• Many retailers have already reduced their exposure to Chinese manufacturing
• Predicts that moderate tariff increases might be absorbed by Chinese manufacturers rather than passed on to consumers

Notable Quotes:

"May the bounce be with you." - Jan Rogers Kniffen on the post-election retail bounce

"I think it's come down to who can do this stuff as opposed to where you happen to be." - Jan Rogers Kniffen on retail performance

Closing Thoughts:

Jan expresses optimism for the retail sector going into the fourth quarter and 2025, despite potential challenges. He emphasizes the importance of execution and adaptation in the evolving retail landscape.

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On this episode of The Retail Pilot podcast, Ken speaks with Nick Green, Co-Founder & CEO of Thrive Market, a membership-based online platform that makes healthy and sustainable living easy and affordable to all. Nick launched Thrive 10 years ago shortly after graduating from Harvard.

The business has also been recognized as a leader in regenerative agriculture, carbon-neutral shipping, and Zero Waste operations, and in 2020 became the nation’s largest grocer to receive B Corp Certification.

Outside of Thrive Market, Nick lives in Venice, CA with his wife, Carolina, and their three children.

Key Points

About Thrive Market: An online retailer offering natural and organic products at affordable prices through a membership model1

Mission: Making healthy and sustainable living easy, affordable, and accessible to all1

Business Model: $60 annual membership fee

• Curated assortment of natural and organic products
• AI-powered personalization
• Zero-waste fulfillment and carbon-neutral shipping

Company Stats

• Founded: 10 years ago
• Members: 1.5 million
• Annual Sales: Over half a billion dollars
• Profitability: Now profitable and cash flow positive1

Nick Green's Background

• Grew up in Minneapolis with a health-conscious mother
• Previously founded and sold an education company
• Met co-founder Gunnar, who grew up on a hippie commune

Business Strategy

• Product Mix: 90% third-party brands
• 10% Thrive Market branded products (generating 25% of sales)
• Private Label Strategy: Focus on filling gaps in the catalog rather than copying existing products1
• Margin Profile: Strong margins on both private label and third-party products
• Sustainability: Zero-waste fulfillment centers, carbon-neutral shipping

Marketing Strategy

• Referrals: 25% of new members come from existing member referrals
• Influencer Marketing: Unique approach to partnerships
• Digital Marketing: Leveraging technology for personalized experiences

Future Outlook

• Focus on expanding online presence rather than immediate brick-and-mortar plans
• Potential for future physical stores, but not a current priority
• Continued investment in AI and personalization technologies

Competitive Advantage

• Purpose-built for healthy living
• Membership model driving profitability and customer behavior
• Technology-first approach to e-commerce
• Strong focus on sustainability and ethical supply chains

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Ken Pilot interviews Oliver Chen for this flight of The Retail Pilot podcast.

Oliver Chen is a Managing Director and senior equity research analyst covering retail and luxury goods at TD Cowen.  His deep understanding of the consumer and his ability to forecast the latest trends and technological changes that will impact the retail space have set him apart from peers.

Prior to joining TD Cowen in 2014, he spent seven years at Citigroup, worked in the investment research division at UBS, in the global mergers and acquisitions/strategic planning group at PepsiCo International, and in JPMorgan’s consumer products/retail mergers and acquisitions group.

Oliver holds a bachelor of science degree from Georgetown University, an MBA from the Wharton School at the University of Pennsylvania, and is a CFA charterholder.

His passion for the sector began at the age of 12 when he began working with his parents at their retail business in Natchitoches, Louisiana.

Summary:

In this conversation, Oliver Chen discusses the current state of luxury retail and the beauty sector, highlighting the challenges and opportunities faced by brands. He emphasizes the importance of pricing strategies, the impact of digital transformation, and the need for brands to connect with younger consumers. The discussion also covers emerging trends in fragrance, the potential of the men's beauty market, and the role of AI in enhancing the retail experience.

Key Takeaways:

• Luxury retail is facing an inflection point with declining sales.
• China's economic factors are influencing luxury spending.
• LVMH's strong brand portfolio positions it well in the market.
• Hermes thrives due to its timeless luxury appeal.
• Luxury brands are increasingly focusing on direct-to-consumer sales.
• Ralph Lauren's success is attributed to its cultural relevance and value perception.
• Fragrance is a growing category with opportunities for premiumization.
• The men's beauty market is still developing but shows potential.
• TikTok is becoming a significant platform for beauty brands.
• AI is set to transform the retail experience through personalized search.

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Ken Pilot interviews Shai Eisenman, CEO and Founder of Bubble, on this episode of The Retail Pilot Podcast. Bubble Skincare is the first modern, affordable, science-backed skincare line formulated to clean, balance and hydrate young skin all for under $20. Today, the Bubble line consists of 20+ products that work together to create a complete routine from face cleansers to face masks. Bubble products are available on hellobubble.com, in over 16,000 retail locations across the US, Austrailia and the UK including Boots, Beauty Bay, CVS Walmart and Ulta stores.

Prior to starting Bubble in 2018, Eisenman started her B.A. at 15, and began her career in business at 16 years old. She lives in New York with her partner and two children. 

Key Points:

• Shai started Bubble after an early start in academics and entrepreneurship
• Bubble focuses on affordable, high-quality skincare products for younger consumers
• The company built a community of 4,600 Gen Z advisors before launching
• Bubble now has over 50,000 brand ambassadors who provide input on all decisions
• Products are priced affordably (around $15) but with prestige-level quality
• Initially launched D2C but quickly pivoted to retail partnerships
• Now available in 13,000 U.S. stores including Walmart, Ulta, CVS, and Amazon
• Recently expanded to the UK (Boots) and Australia (Priceline)

Business Strategy:

• Focused on margin dollars rather than margin percentage
• Found retail partnerships more profitable than D2C for their price point
• Invests in physical experiences and grassroots marketing over traditional advertising
• Collaborates with brands like Disney to reach new audiences
• Raised capital primarily from individuals and early-stage funds
• Aims to be profitable and not reliant on external funding

Community Engagement:

• Uses multiple platforms to communicate with brand ambassadors
• Offers gift cards and commissions to ambassadors
• Runs college campus programs with exclusive merchandise
• Involves community in product development, naming, and marketing decisions

Challenges and Growth:

• Adapting leadership style and operations as the company scales
• Expanding internationally while remaining an independent brand
• Balancing control over brand experience with benefits of retail partnerships

Leadership Insights:

• Values building a strong team and fostering community
• Relies on experienced advisors for guidance in different growth stages
• Emphasizes the importance of adapting to different business stages

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