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Catching Up: Michael Buckley

 

November 14, 2007

Since True Religion’s president Michael Buckley joined the premium denim company in 2006, they’ve signed six licenses and expanded from their niche into men’s and women’s shoes, accessories, swimwear and other categories. They’ve also begun an ambitious retail campaign with seven new stores this year and three more to come.

Buckley spoke candidly to MR about the new stores, how he deals with competing accounts and what he likes about his team.

MR: How's LA treating you these days?

Mike Buckley: Not bad at all. I live in Manhattan Beach where the temperature is about 65-70 all year long. It may get 90 for one week a year, but you always have a breeze coming from the ocean. It was easy to get used to living there. I’m much more physically active, every sport you can imagine doing is here. I run, I bike; I’m outdoors all the time.

MR: Where is True Religion's denim business heading?

MB: Over the last two years there has been a consolidation of brands in the market. We are consistently in the top three of store's best selling jeans brands, including Seven, Diesel, Rock&Republic, and some might include Citizens. We are considered fashion leaders. We don’t make a basic jean. We have a patent on a Super T stitch. We had to make a special sewing machine that allows us to make only two stitches per inch. It’s our number one selling jean. We finally got the patent approved. We have a loyal customer.

MR: What are you strategic goals for the brand?

MB: When I first came to True Religion they wanted to go from being just a denim company to being a full range of products, to build a business not only in America, but across the world, and to roll out retail stores.

For five years before I started at TR, I was the CEO of Ben Sherman in America, and before that I was with Diesel for five years. When I started there they were converting to being just a denim company into being a full product company and they rolled out vertical retail. They built that strategy in the U.S. and the U.K., market by market. They built a brand. A big reason for me coming to TR was to lay the roadmap for the company to grow and to teach Jeff about building a brand. The goal was to go from 90 percent denim to become 50 to 60 percent denim and the remaining sportswear, with wovens, fleece, sweaters, and jackets. We will get the business to 50/50, hopefully, within the next year.

MR: How do you plan on getting there?

MB: In only a year and half, we’ve expanded product categories, we’ve signed six licenses. We signed a license for footwear last year: flip flops, sneakers, and casual shoes.

We also signed headwear, outerwear, handbags, and a swimwear license -- we won three awards at the Miami Swim Show. Right now the line is 60/40 women’s to men’s. We recently signed a men's and women's fragrance license that we’re launching in fall ’08.

MR: You also have a pretty aggressive retail rollout going on, right?

MB: Exactly, it's a big initiative for us. When I first joined TR, we had opened a test store in Manhattan Beach. It was 800 sq. ft., and it was doing $2,000 a sq. ft., so we decided to try a few more. Last year we opened on Prince Street in Soho, Robertson Boulevard in Los Angeles, and an outlet store in Dessert Hills, CA. All of those stores we’re doing anywhere from $1,300 to $2,000 a sq. ft. per store in sales on an annualized basis. So far this year we’ve opened seven stores, with another three to open by the end of the year. We’ll end the year with 15 stores. We opened Miami, Short Hills, NJ, Chicago, Woodbury Commons, North Park in Dallas, Houston Galleria, Valley Fair in San Jose, Porta Madera in Marin County. We have Lenox in Atlanta opening in October, Fashion Show in Las Vegas and Miracle Mile shops at Planet Hollywood opening in November. The plan for ’08 is to have at least 30 stores total open in 2008 which means another 15 to open. And 20 new in 2009. so we’ll have at least 50 open by 2009. And that’s just in North America.

MR: How do you deal with the issue of competing with other TR accounts?

MB: When we look at a potential site, we want to make sure that we’re not going to hurt an already established retail account. We’re going to street and mall locations. Nordstrom, Neimans and Saks understand that it’s a branding exercise. Diesel has their 50 stores, Juicy has their 40 to 50 stores, it helps build the brands. Retailers understand. Occasionally there might be an independent store that if we’re too close, they may buy less of the line or drop the line, but if we have to we’ll sacrifice a $50K independent order for a store that can do $2 million. We have mapping software where I know what kind of volume we’re doing by zip code and I can drill it down to the street. I have accounts doing $500K to a $1 million a year and these are independent, one-store operations. We try to go where there’s a lot of traffic, but without jeopardizing other businesses.

MR: What is the key to your success?

MB: I have a very good team. I hired a senior level person who handles all of our construction -- he used to work for Guess where he opened 210 stores over seven years. I hired a VP of Real Estate from Limited and Pac Sun -- he knows all the major developers across the country, so we’re getting all the real estate we want. We recently hired a Director of Stores who comes from Limited and Cache and is used to running a 100+ store chains. So we have a very solid team. I also have a very sharp Ivy-League MBA who runs all our licensing and buying for our stores. One thing I’ve done well over the years is surround myself with very good people.

MR: How do you and Jeffrey Lubell work together?

MB: Jeff is the CEO, chairman and creative director. He manages the product hands on. He’s gone from a four-person design team to a 13-person design team. Jeff has been a product guy, a true merchant for 25 years. He looks at every garment and says, “Change this, change that.” There are not a lot of people out there who are real, true merchants. Jeff is like the Michael Jeffries of Abercrombie. He has a great eye. He’s into stitch details and all kinds of technical qualities and finishing processes. I know the financial and retail sides, and he’s a whiz at product.

 

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