Designer Tory Burch on taking risks
Kai Ryssdal: We’ve got a live audience here at the Belly Up club in Aspen, Colo., with us today. So that’s one different thing we’re doing — 250 of our closest friends. The second different thing is no news spots, no feature stories. Instead, the economy sideways, we like to say — a couple of conversations about risk. How to calculate it. How to handle it. And how to thrive despite it.
Fashion designer Tory Burch has some experience with all three of those. She started her line eight years ago in her apartment in Manhattan. Today there are 73 Tory Burch stores in the United States and around the world. So one could fairly say, risk? Ha! First of all, welcome to the Belly Up.
Tory Burch: Thank you. So happy to to be here.
Ryssdal: I want to talk about risk and speed. Eight years, a global company. Talk to me about the terror involved with that speed.
Burch: Yeah, so I think I’m terrified every day. When people say, “Oh, do you feel your success,” to me we’re just beginning. I think after eight years I feel like that day in and day out. I think every store we open is a risk and we try to do the best we can to learn the market and what we’re getting into and learn to serve our customers there.
Ryssdal: Not to get technical, but marginal risk declines the more stores you have, right? Store one was incredibly risky, store 74 is going to be meh?
Burch: I don’t look at it that way. I think 74 is a risk as well. Every single one of our stores is performing and doing what it needs to do. And if it wasn’t, then we would quickly fix that. But to me, it’s a risk no matter what.
Ryssdal: There are 40, plus or minus, in the states. Right?
Burch: About 48 in the states.
Ryssdal: OK. And about 30-something overseas? 25-30?
Burch: That’s right.
Ryssdal: OK. As you expand internationally, how do you handle risk of expansion and entrepreneurship in places that can be tricky? I mean you’re in Singapore, I think, now has a new store. Lots of places in Asia. How do you do that?
Burch: Yes. We just opened on Orchard Road in Singapore.
Ryssdal: If you happen to be there.
Burch: If you happen to be there. I don’t know what that means. But we try to be very cautious about the people there, their customs and traditions. We also see who’s shopping our line. And we do a lot of that by looking at who’s shopping on our e-commerce business. And we move in slowly — I never want to open with a big bash and we do it in subtle way.
Ryssdal: Really? You don’t do one of those big parties at the stores?
Burch: We do eventually and I visit every store eventually, but for me it’s better to be a little more subtle and get in there and hopefully let the collection speak for itself.
Ryssdal: What’s the moment of maximum peril for you in opening a new store, in that decision process?
Burch: It’s all about instinct and gut. And I think that no matter what, we’re a patient brand and we wait for the right positions. And it is about adjacencies and who we’re sitting next to, but really we think about will women respond to it and is it the right location for us five years from now.
Ryssdal: Right. Do you have a team whose job is that for each store, or each region probably right?
Burch: We do. We have someone who runs our stores who came from Apple, so he has a very broad view of things. And he looks at us as a very tiny company. What he likes to do and what our team likes to do and our team likes to do is really understand the nuances of where we are and the people there.
Ryssdal: Let’s give a sense of scale. The last public numbers I saw were $800 million of revenue every year. That’s not a small amount of risk that you’re playing with.
Burch: Yeah. It’s about that. We’re approximating. It’s around there. We have a great team. A lot of employees.
Ryssdal: When did you know, I guess, that the risk of that first store had evaporated and you were going to make it?
Burch: In the beginning I was thinking about that earlier. There were so many naysayers and so much noise and so much saying, “Oh this is luck,” “You’re so lucky it’s another season.” My parents always taught me, No. 1, I didn’t have limitations. I grew up with three bothers. I didn’t know that things were impossible for women and things like that. So I looked at that as sad to hear, but I just kept moving along and moving forward. And then we had certain things that seemed to take traction. I knew in the first few years that it seemed to have longevity. Being on Oprah Winfrey didn’t hurt us on any level, it really helped us build the brand.
Ryssdal: Never hurts. So when that happened — when the Oprah thing happened — what happened inside your brain and inside the company? This was a year, plus or minus, after you started.
Burch: It was. We were in business eight months and I got a call that Oprah was interested in putting us on her show for the next big thing in fashion.
Ryssdal: Oh my god.
Burch: Yeah. I thought one of my brothers was playing a joke. I honestly never thought it was real. We ended up going on the show and in short, the next day we had eight million hits on our website.
Ryssdal: Unbelievable. Unbelievable. All right, let’s go to a question in the back.
Don Finley: Question on the timeline meaning on risk. When David [Brashears] talks about mountaineering, I think he’s probably talking in terms of a couple of seconds of rock is getting after him to two days maybe on a big mountain. Whereas in your business, it goes out from a day to a week to two years or longer. How do you see the risk in that, or how do you see it evolving as you work your business?
Ryssdal: How do you judge long-term risk?
Burch: Oh, I think each collection is a risk. You’re only as good as your last collection.
Ryssdal: So every fall and every spring you go through this whole thing over again?
Burch: Well, at least. We do five collections a year and it’s 11 deliveries. So each time you deliver into a store, you’re judged, you’re written about. With the Internet, it’s instant. So it’s a whole new world we’re learning.
Ryssdal: There’s a difference between risk and criticism — fashion critics and writer and all that. There’s the sales thing and there’s the vibe thing.
Burch: There is.
Ryssdal: If that makes any sense.
Burch: At the end of the day it’s really about the sales. You want the critics to love it and that’s great if they do. They don’t always love it and I don’t know that at the end that it really affects the bottom line.
Ryssdal: Right. What’s next for Tory Burch? Where do you go from here?
Burch: So we’re opening more stores. We’ve started a foundation for women.
Ryssdal: Yeah, actually let’s talk about that a little bit. Actually, it’s the Tory Burch Foundation. It focuses on female entrepreneurs and micro-finance, micro-credit.
Burch: That’s right. And mentorship.
Ryssdal: Which is risk, but smaller.
Burch: So we’re trying to help women in the United and then hopefully one day abroad start small businesses and help them with mentorship as well. Launching a fragrance with Estee Lauder in a year. It’ll be the first time. We’ve never advertised before, so it’ll be our first national ad campaign.
Ryssdal: Which is risky in and of itself.
Burch: Yes.
Ryssdal: Cause as you know, half of advertising works. You just don’t know which half.
Burch: And we’ll see. Hopefully the perfume will work.
Ryssdal: Tory Burch, thanks very much for coming out.
Burch: Thank you very much.
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