Minnesota has long been the center of retail innovation. Besides being home to both Target and Best Buy, there have been countless retail innovations and brands born of the Northland. Among the many: the handled grocery bag (1912), water skies (1922), Milky Way Candy Bar (1923), masking tape (1925), Tonka Trucks (1947), and Southdale, the first indoor shopping mall (1956). Then there is the Twin Cities claim to fame, America’s preeminent retail destination Mall of America (1992).
Hammer Made’s attention to detail is mindboggling. Unexpected prints, piping, buttons, inner cuff and collar contrasts, unique trims, and their signature gussets with the now-famous Hammer logo adorn every shirt. The brilliance of such limited runs creates a FoMO factor for their loyal customer base. New looks and styles arrive virtually every week, often selling out instantly.
Beyond iconic retail brands, there is a host of smaller, consequential Minnesota-based retailers who are making a national name for themselves. What differentiates them is not their scale, but the market niche they have carved out or brilliantly occupy.
Minnesota, here we come with a trio of exceptional homegrown retailers.
Winmark is Winning in Recommerce
Unless you are steeped in the world of franchising, Winmark Corporation may be unfamiliar to you. For over 30 years, the franchising parent to well-known resellers like Plato’s Closet, Once Upon a Child, Play It Again Sports, Style Encore, and Music Go Round have been dominant resale players. In fact, it wouldn’t be hyperbole to suggest that they reinvented the once small neighborhood “thrift shop.” Winmark found a way to scale recycling and sustainability long before it was “fashionable” and before ecommerce.
Celebrated by Fortune Magazine’s 2023 annual “Change the World List” Winmark was recognized for using the power of capitalism to improve the human condition. It was among the top 59, combining social and environmental initiatives with a profit-making strategy and operations.
For over 20 years Minneapolis-based Franchise Times has published their annual Top 400 Issue of franchised operations. Considered the leading franchising news and information source, the cull to top players among the 4,000 nationally franchised operations. In the last, 2023 issue, all five of Winmark’s operating brands appeared on the list. Plato’s Closet was listed at #120, Once Upon a Child came in at #161, and Play it Again Sports batted #189. The final two operating units, Style Encore® and Music Go Round® were slightly over the line at #405 and #440 respectively.
- Strong and Stable Player
A major differentiator and “stabilizing factor” that makes Winmark Corporation stand out is its ownership, with 71 percent of the company’s shares held by institutional investors. The list includes mutual funds, pension funds, and large financial institutions, such as The Vanguard Group, BlackRock Inc., and Dimensional Fund Advisors. Their significant stakes in the company give them influence over its ownership and governance. And given the vast amount of money and research capacity at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors.
In an era when many employees would rather “make a job” than “take a job” Winmark is uniquely positioned to help guide entrepreneurs by providing training and resources as well as financial support to start and grow their businesses. These are crucial for those lacking the necessary capital to “get in the game.” nAs of July 1, 2023, Winmark had 1,303 franchises in operation. Additionally, 70 franchises had been awarded but were not yet open.
From Hot Mama to Evereve
After a defeating dressing room experience, Megan Tamte became inspired to reimagine what fashion shopping could be. Evereve, formerly known as Hot Mama, was founded in 2004 by Megan and her husband, Michael, then an MBA student.
Initially focused on “moms-in-waiting” and moms in general, Megan dreamed of a national boutique where women felt welcomed, seen, and understood. She thought there was a vacancy in the retail landscape for a store that sold better-quality contemporary women’s fashions for high-earning women. She aimed to try and fill it. The Tamtes opened their first store in Edina, MN, in 2005.
- Expanding and Rebranding
After 10 years and considerable success, the potential to expand nationally presented itself. However, by then the name and brand positioning was no longer suitable, so the whimsical Hot Mama was rebranded Evereve. The Tamtes found both validation and help with writing their next chapter, thanks to Crate & Barrel’s Co-Founder Gordon Segal who became an investor.
One of the keys to Evereve’s success, Tamte says, is that it provides a highly curated selection of upscale fashion brands which are much easier for women to access than, say Nordstrom. Their 150+ brands include Kenneth Cole, Marc Fisher, Rag and Bone, Sweaty Betty, Dolce Vita, and Guanabana. These are among the premier brands favored by women from households with average incomes of $150K-plus.
Evereve’s corps of stylists are there to help women put outfits together— in a very Nordstrom-like manner. And because they are relatively small by national specialty store norms, their loyal customers can build relationships with Evereve’s brand ambassadors. This also extends to Evereve’s personalized subscription styling service and daily fashion inspiration and conversations on their social channel @evereveofficial. With over 100 stores in 30 states (and counting) Evereve’s five-year plan is to open between 12 and 15 stores a year. They are striving to achieve about 200 units by 2030.
Is menswear in their future? The Tamtes appear to be paying attention to their customers who frequently request a menswear equivalent, crediting its success to their laser-like focus on lifestyle apparel aimed primarily at women over 30. Last September it was made public that Evereve purchased a 17 percent stake in Minnesota-based specialty menswear retailer Jaxen Grey. Grey’s terrific merchandise mix, attention to detail, and highly attentive sales staff could well be the Yang for Evereve’s Yin. Jaxen Grey, currently has three stores in Minneapolis and a fourth in St Louis, MO.
Tailormade by Hammer Made
While Winmark and Evereve represent polar opposites in terms of market space, operating structure, and customer demographic, there are important traits they share. Besides both being Minnesota born and bred, they both combine brand clarity, operational excellence, and laser-like customer focus.
A third Minnesota-born company, by far the smallest, is also worthy of mention. Hammer Made started life as a direct-to-consumer (DTC) ecommerce company. Currently celebrating its 15th anniversary, its founder Jason Hammerberg set out to create very distinctive shirts in extremely small runs, often fewer than 100 pieces in total! Some “Limited Editions” are numbered, like a lithograph print. Their trifecta of exclusivity, distinctive fabrics and styling elevates the products to something akin to collectibles rather than attire.
Hammer Made’s attention to detail is mindboggling. Unexpected prints, piping, buttons, inner cuff and collar contrasts, unique trims, and their signature gussets with the now-famous Hammer logo adorn every shirt. The brilliance of such limited runs creates a FoMO factor for their loyal customer base. New looks and styles arrive virtually every week, often selling out instantly, like limited edition Air Jordan Nikes.
Hammer Made shirts are made in both Italy and Portugal, often by third-generation private companies. Hammerberg makes regular visits to his textile producers as well as shirtmakers to coordinate the myriad of styling choices required for each “edition.”
As you might imagine, the shirts are not inexpensive, usually running between $100 and $150. I’ll admit, ten years ago during my initial brand exposure I had sticker shock. But I, like many other brand newbies as well as seasoned brand advocates, became hooked. The feel and durability are a match for the tailored styling. In fact, my first, now 10-year-old shirt has been laundered more times than I can count and still receives compliments.
- Brand Expansion, Brand Extension
The brand has recently expanded beyond their signature button-down shirt, and its four Minneapolis locations, opening in The Forum Shops at Caesars in Las Vegas. I applaud the Forum Shops move which could pay huge online sales dividends once tourists get addicted to the brand.
However, I’m a bit more measured about their brand extension move beyond their signature products (which have long included socks and ties) into general menswear. My fear is it could muddle the secret sauce and complicate the business model. While I did not receive a response from Hammer Made regarding growth-plan inquiries, I would not expect major unit expansion from this specialized brand.
Perhaps the most important upshot of this brand’s story is that there has never been a better time for a small niche specialty retail startup. With the washout and the commoditization that has taken place in middle-market retailing, opportunities abound, particularly with “make-a-job” rather than “take-a-job” next-gen entrepreneurs.
Whether that concept is digital first or not, there remains marketspace for highly differentiated and pinpoint-focused specialty retail concepts. Remember, we’ve now entered a chapter in retailing history where scale, for scale’s sake, is no longer “a thing.”
