“The contemporary world is a hot mess,” said Tibi designer Amy Smilovic, on a recent call from her office in New York’s NoHo neighborhood. “It’s like watching a bunch of four-year-olds playing soccer: They’re not playing their positions. They’re all on the off-the-shoulder ball, then they’re all on the lace dress ball. They’re all just chasing this ball.”
Smilovic, whose brand currently lives in the advanced contemporary space, blames department stores. “You’d have them saying, ‘This is what’s doing well. Can you please undercut them?’” she said, of her experience with store buyers. “And then you’d sit down, and you’d say, ‘This is what we have that’s kind of similar.’ Or, ‘This is what we can create for you.’”
Today, it’s a different story. “They sometimes still approach us the same way, but we shut them down very quickly,” she said. “We say, ‘Then go buy more. That has nothing to do with us whatsoever.’”
The switch came about in 2010, when Smilovic abruptly decided to change the direction of Tibi, which she and her husband, Frank, established in 1997. At the time, it was reportedly worth $22.4 million.
“I really felt like this designer imposter, always approaching everything from a business perspective,” she said. “So I took inventory of everything that was going on — in fast fashion, in contemporary, in department stores, in the world — and how I was feeling about my collection. Finally, I was just like, ‘Fuck it.”
Ad position: web_incontent_pos1
Her new plan: “I decided to just be maniacal about what I love and to make business creatively fulfilling.”
Tibi designer Amy Smilovic (Image via nordstrom.com)
Immediately, that meant moving from the print-heavy looks with which Tibi had become synonymous to styles that were in tune with what she and her design team wore on a daily basis: “clean, easy and feminine” pieces.
As a result, the brand lost Neiman Marcus as a retailer for short time, which was “very difficult,” Smilovic said. But her assertion that the rebranding was “absolutely the right decision” seems spot-on. Tibi’s annual sales have since doubled.
It’s a remarkable feat, especially considering the unstable contemporary market, formerly known as “bridge.” Sitting somewhere between designer and fast-fashion markets, included brands (Rebecca Taylor, Milly, Alice + Olivia, to name a few) are comparatively more reliant on department stores, which have been struggling, to say the least.
Ad position: web_incontent_pos2
In August, Macy’s announced plans to close 15 percent of its stores. Last week, JCPenney revealed it will be closing 138 stores this spring. From 2016 to 2017, Neiman Marcus, which is said to be on the market, saw a decrease of 6.1 percent in total revenue for the quarter ending January 28.
The fact that Tibi’s rebranding centered on asserting independence made it timely.
“Five years ago, if all department stores went out of business, I just wouldn’t have had a business,” she said. “Today, we could put our heads together and figure out a way to make it work.”
Here’s how Tibi got there.
Aligning with the right partners
Within the last year, Coach has pulled its products from 250 department stores, and Michael Kors has demanded to be excluded from their promotions. Smilovic understands their decisions well.
“What happened a few years ago, with the advent of e-commerce, is that when a store became promotional, the ripple effect was phenomenal,” she said. “If Bloomingdale’s had a 20-percent-off promotion, Saks and Nordstrom would price-match. It wasn’t an isolated situation; they were eroding my profit margin at every single department store.” She eventually pulled out of Bloomingdale’s.
Tibi is still sold at Neiman Marcus, Saks Fifth Avenue and Nordstrom, the latter of which is one of Smilovic’s preferred partners. “They’re not looking at it from an intellectual point of view, but from an instinctual point of view,” she explained. “That’s great for us.”
What’s more, Nordstrom is succeeding where others are failing: For the fourth quarter of 2016, it reported a 2.4 percent increase of net sales, to $4.2 billion.
A look from the Tibi fall 2017 collection (Image via vogue.com)
Carving out a niche
“We looked at the players in advanced contemporary brands that represented certain looks,” Smilovic said, in regard to redefining her direction, which involved a promotion to the advanced contemporary space. “You had Alexander Wang, which was a little edgy and aggressive; and then you had Isabel Marant, which was very bohemian with a bit of edge … There was one opening, and that was for someone who was feminine and modern.”
She said that, unlike the contemporary market, where brands are defined by whatever trend is happening, advanced contemporary players are defined by their brand. “People know what Tibi stands for.”
A happy result: Her relationship with department stores has greatly improved. “They don’t try to make me create a product that doesn’t look like Tibi because it would be confusing to the Tibi customer.”
Establishing a direct-to-consumer business
Currently, Tibi’s e-commerce site, which launched in the year it rebranded, accounts for about 25 percent of its sales. Of the remaining 75 percent, 80 percent are through wholesale partners and 20 percent are through its brick-and-mortar stores — it has a Soho location and an outlet in Georgia, in Smilovic’s hometown, both of which opened in the past two years.
As a draw, Tibi sells exclusives online, including its handbag collection created in collaboration with Myriam Schaefer and styles that Smilovic “really, really believed in,” but couldn’t get stores to get behind.
In an effort to have “a seamless shopping environment,” she also hopes to sell on Instagram in the near future. (“Probably 80 percent of my purchases are influenced by what those I’m following on Instagram are wearing,” she admitted.)
A former Macy’s and Bloomingdale’s executive backed Smilovic’s strategy: “Brands selling directly to consumers via their own website or Instagram has definitely reduced dependence on department stores,” she said. “And it’s more than just a trend; it is part of the current evolution of the retail landscape. These brands are eliminating the middleman.”
Maintaining patience
Smilovic attested that the reason she was able to “take an ax to” her company was that she never jumped the gun in terms of building it.
“We never really grew beyond our means to where we were handicapped to do things we didn’t want to do,” she said. “And we’ve never bloated ourselves; we’re certainly not over-leveraged with employees or brick-and-mortar costs, or anything like that.”
As they say, patience is a virtue. “Five years ago, we didn’t stand for anything to anyone, at all,” she said. “Today, I’m confident we can survive. I have my brand DNA. I can apply that anywhere.”
Tibi spring 2017 image via firstview.com
