Tory Burch. Doing Almost Everything Right
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\"RRAbout a dozen years ago, sitting in her blue and white David Hicks and Billy Baldwin design-inspired kitchen in her 6000-square-foot Pierre Hotel co-op overlooking Central Park, Tory Burch set about to create an affordable clothing line that she and her friends would like to wear. By this time, Tory Burch was already something of a socialite and had appeared in the pages of Vogue and on the cover of Town & Country. Not entirely to the manor born, but close enough, Tory, a graduate of the University of Pennsylvania, had worked in the fashion industry, not in design, but in advertising and public relations. Perhaps this is where she learned about marketing and branding, or perhaps she just has very good instincts.

The first Tory Burch boutique opened in 2004 on Elizabeth Street in Manhattan’s Nolita, now a fashionable retail stretch, but a somewhat more pioneering location at the time. With a $2 million dollar investment from then-husband Chris Burch and additional funds from friends and family, the store launched with multiple categories of clothing and accessories. In 2005, Oprah Winfrey discovered a Tory Burch tunic and pronounced it the next big thing. With Oprah’s endorsement, a unique fashion point of view that struck a chord with a certain crowd in Manhattan in its early days and some good exposure on Gossip Girl, fashion history was made.

Privately held, Tory Burch LLC has been valued at over $3.3 billion. In the 10 years since the first boutique opened, it has grown to 136 stores in the United States and globally, from Shanghai to Singapore to Dubai – where it is open until midnight. Tory Burch is also distributed in about 3000 department and specialty stores, and on a beautifully designed and engaging multinational web-site which features free standard shipping and returns, complimentary gift wrap and a Tory Daily which lets readers know what Tory is up to and her comings and goings.

Now a multi-category “lifestyle” brand, Tory Burch products include clothing, shoes, handbags, sunglasses, and accessories; blue and white sponge wear patterned china with coordinating napkins; and at least one grey flannel doggie coat. Watches are licensed by Fossil, a Tory Burch collection is licensed by Fitbit, and Estée Lauder launched a Tory Burch fragrance, blush and lipstick successfully this year. Like Martha Stewart and Ralph Lauren, Tory Burch herself is the brand. Now 48, the attractive blonde mother of three boys has an estate in Southampton, shows up at all of the right social events, and chairs her own foundation whose mission is the economic empowerment of women entrepreneurs through affordable loans, mentoring and education.

\"Fashion\'s60s and 70s Redux

Tory Burch stores and in-store boutiques present a very specific Tory Burch aesthetic inspired by the English society decorator and style maker of the 60s and 70s, David Hicks. He was known for color, pattern and geometric prints, which have become Burch’s signature. Stores feature orange lacquered doors, brass trim, and geometric fretwork on banisters, which is also evoked in the fragrance and cosmetic packaging. Parsons tables with upholstered stools, brass and glass étagères, 70s-inspired chandeliers, fabric covered and wallpapered walls, patterned carpets, lush curtains in bold geometric prints, and sink-in sofas all create the feeling of comfortable, but aspirational luxury that is the brand.

Ralph Lauren’s muse is his wife Ricky. Tory Burch’s muse is her mother, Reva, who raised her family – Tory and three older brothers – in a 250-year-old white Georgian farmhouse with pool, tennis court and gardens at the end of the Philadelphia Main Line. Tory learned fashion, style, taste and tennis from her gorgeous former model/actress mother and her attractive father, Buddy, who had his blazers lined with Hermes scarves.

Black-and-white photographs of Reva and Buddy Robinson appear in Tory Burch boutiques and throughout her recently published book, Tory Burch in Color. Sales associates talk about Reva and Buddy (and Tory) on a first name basis. Watches are named for them. Tory Burch’s signature tunic was inspired by one her mother bought in Marrakesh. The Tory Burch corporate values, “The Buddy Values,” including Honesty and Kindness, Passion and Humility, Integrity and Compassion, Elegance and Humor were inspired by her father, who died in 2007. Reva’s 60s and 70s designer wardrobe continues to provide the basis for Tory Burch clothes.

The Reva Flat

Reva told Vanity Fair that she did not think she would be remembered for a shoe. Tory Burch hired footwear maven Vince Camuto, founder and former CEO of Nine West (now head of his own company) to design what is now likely the most recognizable symbol of Tory Burch: the Reva ballet flat. Following a fashion trend begun by Marc Jacobs with a $300 flat evoking Audrey Hepburn’s style, the initially $195 priced, rubber soled, elastic backed, double T gold logo embellished Reva was launched in 2006. By 2008 more than 250,000 pairs had been sold; by 2013, more than five million. Department stores were encouraged to return product rather than mark it down; the shoes were reportedly short shipped to create must-have status. The Reva flat, along with the Oprah endorsement, put Tory Burch on the map.

Tory Sues Chris, Chris Sues Tory, and Tory Gets Roger

Tory and Chris Burch married in 1996, had three sons, and separated about 10 years later. Chris, an entrepreneur, started a sweater company with his brother when he was a student at Ithaca College. In 1990 they sold 70% of the company for $60 million. Chris invested early in Internet Capital Group, a B2B web business that went public in 1999. He sold his stake in ICG when restrictions on his stock were lifted and the stock, a high flier in the Internet bubble, was selling at $170. Later, shares were valued at 52 cents.

Chris Burch had sourcing and retailing experience from his sweater days, capital, and clearly a good nose for timing and investing. But there is little question that Tory Burch is the creator, visionary, tastemaker, leader and ambassador of her brand. After their separation, Chris continued to serve as co-chairman of the company. That changed when Chris launched C Wonder, a less expensive copycat version of Tory Burch, complete with a similar brass logo, store design and fashion stance, including ballet flats priced at about half of the Reva. Tory Burch LLC sued Chris. Chris countersued the company. The settlement involved the sale of about half of Chris’ 28.3% stake in Tory Burch at the end of 2012. After the sale, the company was valued at about $3.3 billion; Chris and Tory each were listed as Fortune billionaires. Tory remains largest shareholder. Chris spawns businesses, fashion, retail and otherwise, through his investment firm, Burch Creative Capital.

Tory Burch LLC sales are now reported to be over $1 billion globally. Sources estimate that a quarter of Tory Burch sales are generated outside the US and the company’s overall growth rate is in the high teens.

In September 2014, Burch hired Roger Farah, 61, to be her Co-CEO not long after he retired as Executive Vice Chairman of Ralph Lauren. A seasoned and successful retail executive, Farah had been, among other high profile jobs, Chairman of Federated Merchandising Services; CEO of Rich’s; and President and COO of Macy’s. During Farah’s tenure at Lauren, sales grew from about $2 billion to over $7.5 billion. In a statement released when Farah retired, Ralph Lauren credited him with building a leadership team and “…evolving our company into a highly profitable global business.”

Tory Burch apparently has a sense for attracting and retaining talent; her management team has been with her for some time. Now, Roger Farah can provide Burch with the gravitas she needs as the company moves forward in its next chapter, perhaps, in the words of The Wall Street Journal, “to build the brand into a global fashion empire.” While there has been much speculation about Tory Burch going public, both Burch and Farah have dismissed an IPO. “We want to grow on our own terms, in our own way, and don’t want to have to answer to the public at this point,” Burch said in an interview.

Logos Are a Tricky Business

The distinctive double T logo, somewhat Asian in feeling, was the only design Tory Burch said she connected with after looking at many others. It appears prominently in Tory Burch boutiques and department and specialty stores as an identifier. It is also a design element on clothing. It is embossed or attached as a brass appliqué on leather goods, imprinted on shopping bags, and sits prominently on the toe of the Reva ballet flat.

Logos are a tricky business indeed. They need to be used wisely and well. Remember the overexposure of the Gucci double G and the effort it took to bring the brand back to its original status and heritage? The revitalization of Louis Vuitton’s brown leather LV in bright white and color by Marc Jacobs? Bottega Veneta’s long-term campaign, “When your own initials are enough,” championing the absence of a visible logo and the status of being recognized for the singularity of the product itself? Ralph Lauren’s effective management of his signature polo player? There is a delicate balance that must be played between an overreaching outward logo display, which some customers find offensive, and the visible symbol that signals being a part of the tribe that is especially important for aspirational, “wanna be” customers who fuel the sales of handbags and accessories.

I conducted a survey to find out what consumers thought about Tory Burch. Many found the overuse of the logo distasteful. A Pittsburgh real estate executive said: “The shoes are cute, but the gold emblem is too ubiquitous and now seems garish.” A California financial executive and young Mom smack in the middle of the Tory Burch demographic said, “I associate Tory Burch with the classic shoes that so many people seem to have…I tend to prefer to wear things where the brand is not quite as overt.” A New York woman thought the “the logo on everything was distinctive when the brand was launched, but is now a turnoff… all those T’s and the flats were completely over represented…for me, that killed the brand.”

On the positive side, consumers were consistent in their responses about who the brand is for and its aspirational appeal. A New York corporate executive and working mother of two girls associates the brand with “the affluent casual crowd from Connecticut who maybe goes sailing on the weekend and has a home on the Vineyard.” Most consumers agreed that the brand was for a “youngish” consumer who looked for quality, classic or traditional style. Comments ranged from, “Women in their 20’s and 30’s trying to blend in while dressing well…” to, “Women who are interested in looking fashionable without looking like they are trying too hard.” The brand’s emphasis on color and pattern is clearly recognized and appreciated: “I am always attracted to her pretty prints…” “classic colors with lots of white…” “patterns, designs…a colorful, modern, clean look.”

But many consumers find the clothes boring and not as interesting, unique or of the quality they were when the brand was first launched. “Her ready to wear can be slightly dowdy.” “Her dresses are often matronly looking.” “Every time I go in the store the stuff seems frumpier than expected.” “I think it is tasteful but a bit stuffy.” A department store executive I spoke with off the record told me that although Tory Burch is an important vendor, the apparel wasn’t “contemporary” was a bit “matronly, lacked hanger appeal and youthful energy.” But the Foundation was seen as a plus because the “story behind a brand is important.” This was echoed by many of the consumers I interviewed who seem aware of Tory Burch’s pubic and philanthropic persona. “Tory Burch as a person is awesome. She is beautiful, smart, philanthropic and a role model to women.”

Will Tory Burch become the next “global fashion empire”? Will there be enough demand for logo embossed purses, shoes and watches to sustain a concept that has a relatively narrow appeal in customer focus and clothing style? Can a fashion empire be built on color and pattern and brass fretwork? Will additional licensed product categories – possibly furniture, home and kids – find the brand modeling itself more like Ralph Lauren than Michael Kors?

I say anything is possible, provided the merchandise quality and brand focus is maintained, the clothing is invigorated seasonally, and Tory Burch can sustain the hard work and appropriate high profile one consumer describes as “her whole pretty blonde society look and her narrative that makes the brand distinctive.” We shall see.

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