Co-founder Brian Murphy on growing Loeffler Randall to an $80 million business by 2025

On the podcast episode, Murphy breaks down Loeffler Randall’s approach to physical retail, which has resulted in its 750-square-foot NYC store doing $1.3 million in annual sales. He also talks through the company’s international ambitions and its strategy for becoming an $80-million, 100-employee company within the next 18 months. Excerpts from the conversation, below, have been lightly edited for clarity. 

Surviving the pandemic

“This was an independently financed, mom-and-pop business financed the traditional way — through SBA loans at the beginning and then bank-financed based on a blend of receivables and inventory. … Being bank-financed [involves] strict covenants and monthly reporting to the bank. And I always loved that because I was like, ‘Hey, you know what? There’s a lot of eyeballs on the business. There’s a lot of integrity in the numbers; everything has to be perfect. And this is the way a real business is run — and I don’t have to worry about pleasing some VC capital that’s got 52 bets spread across consumer [businesses].’ That setup had always worked for us. … But we’re kind of an events-driven business; we are a specialty product; we are worn heavily at things like engagement parties, weddings, bachelorette parties, proms, black tie events, evenings out, wear to work, … And it wasn’t product that performed particularly well during Covid. That was a drastic athleisure moment. So that was tough for this business, along with the wholesale environment — that was also very difficult. We had already had a major wholesale partner, Barney’s, declare chapter 11 in Q4 2019. … We had all this great product. A lot of this product that [eventually] drove our growth in 2021, 2022 and 2023 was in development, was being marketed, and was for sale. But 2020 was slow.  … And the bank I was in wasn’t super committed to the American market and also wasn’t committed to the small- and medium-sized business market. They had their own issues. And so, for us, it was a very difficult six months with them. … It was really scarring. I think they knew that we were honest and that we were accountable, and that we were transparent. … But I feel like they wanted to close this business and they wanted to close that loan.” 

Thoughtful retail expansion

“At the end of 2020, with [new] financial partners, we were like, ‘We’ll have four stores open by 2024.’ But I have two stores open now, and I don’t have a third lease. So, it’s slower [than expected]. When I do retail, it’s a big part of my job — just thinking [about] and finding where it’s going to be. There’s not much [real estate] available. But I think about people like Tory Burch, and — God bless — she’s operating, like, 300 stores. … Doing our second store in Charleston was like a labor of love. Our design team is omnichannel: They work in marketing, they work on the products, … they work in every medium. …  So they’re designing, and they’re also thinking about how it’s going to be visualized. … They’re styling the shoot, they’re going on the shoot, they’re picking the furnishings for the store, they’re looking at the architect’s drawings — it is fully integrated. … I usually pick the [store] site, though it’s collaborative. … The Charleston [store] was hard. It was a new building, so there were a lot of zoning and logistical [challenges]. But I’ve been working in creative or media or advertising or graphic design — I came here as a graphic designer in the late ‘90s — and I was like, ‘This is the best creative project I may have ever been involved in.'”

Joyful is the new minimal 

“We’re in this weird in-between era [of retail], right? You have a lot of people in retail with experience, but they’re from a Gap or a Banana Republic, and those stores were huge — 6,000 square feet — and stacked high with product. The old Mickey Drexler thing of, ‘Stack ’em high, let ’em fly,’ it just doesn’t work [today]. People don’t want to go into those stores and feel like there’s too much product. … And I still see a lot of brands using this model, where it’s like, ‘We’ve got all this stuff. Come by.’ And I’m just like, ‘I’m overwhelmed.’ That’s like the world I grew up in; I’m an ’80s mall kid. And I’ve been to every version of Victoria’s Secret and Brooks Brothers and J.Crew that’s ever been created, by every creative director. … So then we flipped. We had a new era of largely DTC businesses, funded by VC, that went heavy into retail — this is in the last 5-7 years. And a lot of their stores are super clinical, a lot of them feel distant from the customer, and a lot of them look the same. … Some of them are truly bad retailers, and they shouldn’t be doing it. They’re too hard and too bare, and I don’t get it. … But we want to create a joyous connection to the business [in our stores], and we want to share the creative stuff we’re doing. … I see a lot of this in food and bev, too. You see a real joy returning to the small, boutique, high-touch food and beverage businesses.”