NEW YORK, United States — Theory chief executive Andrew Rosen sits on a couch in his showroom, holding the label’s “T-Bar” handbag in his lap. The oblong shoulder bag, rendered in smooth calf leather, features an elegantly topstitched “T” across the body. That detail is incorporated into several of the styles that comprise the first delivery of Theory’s first full-fledged handbag collection, which goes on sale this August in Theory stores and on Theory.com.
While approximately 50 percent of the Fast Retailing-owned company’s global revenue comes from wholesale partners, and 70 percent of its US revenue is generated by wholesale, Rosen has adopted a different strategy for the launch of Theory’s new accessories: a focus on direct-to-consumer distribution.
“As we continue to build our direct-to-consumer platform, not only in the US but around the world, we need to add to the lifestyle of Theory,” he says. “Accessories are clearly an important opportunity in that regard. I want to create more emotion in our stores, more energy in our stores, and this gives us the permission and ability to do that,” he continues. “The retail environment too has to be more curated. This allows me to do more business in the same square footage without adding more clothes.”
When asked which of the new bags he predicts will be a runaway hit with customers, Rosen points to the “T-Bar” and says: “This one.” Indeed, it’s this kind of instinct, along with his insight into the current market, that is driving Theory’s first significant push into bags.
In clothing, we’re able deliver the price-value equation because we have a sophisticated manufacturing platform. In accessories, we’re able because of the vertical-retail model.
The contemporary label has sold handbags before, but it was mostly one-off styles. Theory also stocks a select number of third-party brands in its own stores — such as Common Projects sneakers — and has had success with some of those bags, including styles from Mansur Gavriel and Building Block, in the past. However, the company stopped carrying third-party bags a year and a half ago, and about a year ago, Rosen hired creative director of accessories Rory O’Hanlon, who is now working to make the category a true pillar of the Theory brand. “Being able to find Rory, who has an incredible pedigree and experience in the accessories world, was a great motivation,” Rosen says. “It wasn’t like I would have done this if I didn’t find Rory. Part of the reason was that [he] was available to join the company.”
O’Hanlon — whose resume includes stints at Smythson, Coach and Céline, among others — was tasked with building a small-but-considered collection that could serve as a foundation for the future iteration of the line. “The idea is to incubate this and have it run as a start-up, even though we’re a big company,” Rosen says. “It’s not like I think we’re going to just put bags in our stores around the world and it’s going to be instantly successful. It’s going to take a lot of work and we’re going to have to continue to evolve the initial concept.”
That means starting with less than 10 styles, ranging from $125 for the suede “Transformer” — a flat cross body for women — to $995 for the men’s pebble-leather “Signature” tote, which is essentially a weekender bag. Women’s styles make up the majority of the selection and notable silhouettes include the aforementioned “T-Bar” bag, with an interior calf-hair pocket version clocking in at $875, and the “Whitney” hoop bag — a particularly relevant design that can be worn as a clutch or a shoulder bag — ranging from $345 to $395.
Calf-hair and shearling details add just enough novelty to otherwise minimal styles. “The accessory business gives us an opportunity to be more adventuresome in terms of colour, etcetera,” Rosen says. “Theory, as a brand, is conservative in a lot of ways. I hope we don’t operate conservatively, but we have some conservative elements to us and this gives us the permission to be less [so].”
Every item — some of which are made in Italy — falls below the $1,000 mark, and many well under it. The idea, Rosen explains, is to offer designer-quality products — with Napa- and suede-bonded leather — at more accessible prices. “In clothing, we’re able to over deliver in terms of the price-value equation because we have a very sophisticated manufacturing platform,” he says. “In accessories, we’re able to do it because of the vertical-retail model. In today’s world, that’s infinitely more important than it was in yesterday’s world. Even though I think it was important in yesterday’s world, too.”
Everyone talks about affordable luxury, but nobody’s actually done it.
This, perhaps, is where O’Hanlon’s expertise is particularly important, having designed for a broad range of labels that use an even broader range of suppliers. “Everyone talks about affordable luxury, but to me, nobody’s actually done it,” he says. “There’s no Napa-bonded leather in this section of the market, at this price point. I’m very pleased with the quality and I think the customer will respond to that.”
To be sure, the market for accessories is overcrowded. But while the pre-recession mid-2000s boosted accessible luxury labels like Coach, Kate Spade and Mulberry, only a handful of brands have successfully entered the mid-range market since, most notably Mansur Gavriel. And yet, at the same time, prices for luxury handbags have risen significantly, leaving a wider gap between cheap-and-cheerful high-street labels and well-crafted, but highly priced luxury brands.
Rosen sees this as a big opportunity and is clear that selling direct is the way to tap it. “I can take all sorts of risks in terms of accessories because I have nothing to protect,” he remarks. “In this day and age, being able to just react to the modern consumer is a very enviable position. If you have to protect what you had, it doesn’t allow you to be experimental and innovative.”
But while direct-to-consumer sales are projected to play a significantly larger part in just about every fashion business, Rosen sees things more holistically. “The better retailers we are, the more successful we’re going to be, not only in our own retail business, but in our wholesale business,” he says. “I’m not saying, ‘Never will this ever appear in one of my [wholesaler’s] stores.’ In this category, we can really push the envelope. This is just the place we’re starting.”