Karen Walker's $35m specs appeal
The fashion runway is a road less travelled by Kiwi entrepreneurs. Fashion designer Karen Walker has forged her own path to global success in an industry that’s not traditionally been part of New Zealand’s business identity.
You won’t find Walker swapping business cards at New Zealand entrepreneurial events and “never in a million years” will she take her company public. But with her brand thriving - sales of Karen Walker eyewear alone are expected to top $35m this year - the company has a global reach that many Kiwi tech firms would envy.
For the second year in a row Walker has been named on British magazine Business of Fashion’s BoF500 list of top global fashion influencers - the rag trade’s equivalent of being named on Forbes Innovative Companies list.
On the BoF500 list, Walker rubs shoulders with three other New Zealanders (Tim Blanks, Aaron de May and Lisa Eldridge) as well as top designers such as Christian Louboutin. The list includes influencers at all level of fashion including Axel Dumas, chief executive of Hermès, Vogue editor Anna Wintour and celebrities such as David Beckham.
The rest of the world has noticed Walker, so why hasn’t New Zealand’s business community?
“Fashion isn’t culturally part of New Zealand’s business landscape traditionally - if you look at our stock exchange it’s all commodities or discount brands,” says Walker who is both the company’s managing director and head designer.
“As soon as you get into the US or Europe, fashion is well respected and it’s perceived as a very big business.”
By the end of the year Walker will have clocked up 250,000kms worth of air points while taking her brand across the world. Exported to 34 countries and sold in more than 950 stores globally, the Karen Walker empire of clothing, bags, interior paints, jewellery, children’s wear, dog accessories, homeware and eyewear – celebrating its 10th anniversary this month - is one of New Zealand’s most visible brands.
The label’s bold, quirky and sometimes irreverent looks are coveted by celebrities such as Lady Gaga, Anne Hathaway and Charlize Theron. While the world of Hollywood’s starlets might seem far away from New Zealand’s startup community, the reality is tech firms share more in common with Karen Walker than you might expect.
“Technology and fashion brands speculate on how people will want to live in the future. These industries are constantly living in the future and thinking forward. This is something any business would benefit from,” Walker says.
“Our business is about innovation, it’s at the heartbeat and the core of everything we do.
“Whether it’s creating a show for New York Fashion Week, a new eyewear range, or putting an email out – everything has to come back to the questions, ‘is it a good idea, was it original and is it well written? I absolutely don’t allow anything to slip through.”
Walker won’t go public with her business figures – but she says all of her lines are profitable and the last five years has seen an increase of 20 per cent per annum on top and bottom lines across the group. Her range is growing and her company is expanding into new products and markets.
Creating a business environment that fuels fresh, yet consistent, ideas across all products is a continual challenge for Walker and her business partner and husband Mikhail Gherman, the label’s creative director.
Keeping the company private and funding its own growth has been key to maintaining an innovative culture, Walker says.
“I don’t need to quantify how successful I am, that’s the great thing, I don’t need to report to stockholders.
“It makes for a very creative company because ultimately, we have a board but Mikhail and I - we’re the bosses. We own the company and we make the decisions and sometimes it comes down to whether something feels right.
“We work smart and intuitively and we don’t have to seek approval for every decision.”
Nor does Walker chase innovation grants to help fund growth.
“Sometimes it takes more work trying to get a grant than just showing up and doing the business,” she says.
“You can’t be a Buddhist to be in fashion because you are never in the present,” the designer laughs. When she meets with Unlimited it’s only a few hours after she stepped off the plane from New York Fashion Week, where she showed her Garden People 2015 Spring Summer Collection – inspired by Britain’s society gardeners from the 60s and 70s. The future is always now in the Karen Walker office in Grey Lynn, Auckland.
Currently Walker is working two years in advance on her homeware range and is planning next year’s launch of the jewellery line into the US. This month she launches her latest eyewear collection, while simultaneously putting the final touches on the next range out in February.
It’s 10 years since Walker first launched her eyewear line and a decade ago Unlimited was the first to talk about the lucrative new venture. Sold through a licence arrangement with Australian company Sunshades, the glasses have been one of Walker’s big triumphs. The unique designs, which retail for around $350, are sold in 548 stores globally. Quite deliberately, demand for the frames exceeds supply.
“If we let the kite string out we could sell 10 times more product,” she says.
“But the strategy has always been to be in the right stores and the right environment and not have it be everywhere - but still be a quite considerable piece of business.
“This year we expect retail sales on eyewear globally to be well over $35 million and this is with us purposefully undersupplying the market and turning away the majority of approaches from stores.
“You can only do that if you are global. Our approach is to have it be a niche product on a global scale, we keep it very controlled.”
Walker saw an opening in the sunglasses market for distinctive styles that were bold, colourful and “more toy-like”.
“The big brands were doing really boring stuff…We thought what we do has got to be interesting, it can’t be generic and homogenous.
“At (UK department store) Liberty we were the biggest selling brand on the ground floor at one point last month, and that’s the floor with all the perfumes and beauty products on it. It’s got this incredible following.
“I was in Barneys last week and the entire time we were there we saw groups of girls with their gay friends trying them on selfie-ing and instagram-ing and loving it.”
Social media has been a big driver of Walker’s recent success and now 20 per cent of retail sales come from the online store. It allows her company to broadcast big news like her New York Fashion Week show and small things like Lady Gaga wearing her specs.
“I’ve been in the business more than 20 years and this is why it’s better now than ever to be a designer. You can reach out and talk to people. It’s very democratic and there are no gatekeepers.
“Sure, we like to sell to people like Barneys but when you have a web store, the whole world is yours. Equally you are competing against the rest of the world in a way that never happened before.”
New York Fashion Week is just a small element of the company’s cross category marketing plan, Walker says. But the $150,000 undertaking (per season) isn’t just about talking to the American market and drives business in all 35 countries the brand sells into.
The philosophy behind the Karen Walker brand is a “360 degree offering” with a broad range of products at different price points. A customer could walk into a store and buy a $25 headband - or a $50,000 diamond ring.
“The idea is a flexible experience for people, and hopefully it gives people the same feeling no matter what they are buying and maybe that purchase will lead them into other parts of the brand,” Walker says.
One of the label’s entry points is its clothing line Hi There. The company has a partnership agreement to exclusively supply the more cost efficient range to Australian department store Myers. Hi There is also sold through rapidly growing US women’s wear retailer, Anthropologie.
“Sometimes Anthropologie will buy 10 styles, sometimes they will say, ‘we don’t need anything this month’ –there’s no contract there. But they are a big company so when they buy, they really buy.”
When Anthropologie orders large, the company has the flexibility with its manufacturers in China, Romania, Turkey and New Zealand that they can produce the required quantities. Around 100,000 apparel units of Hi There and the other Karen Walker apparel brands were made in total this year.
The firm’s eyewear partner Sunshades “is like family”, the designer says. Walker has learned over the years to be careful who she teams up with.
“Of course we check if the people we work with can do the job, if they’re sound financially and if they have good taste. But the most important question for any agreement is, ‘do we want to go out to dinner with them?’, and if the answer is ‘no’ then no deal. You have to like the people you work with.
“I have only had [bad experiences] once or twice in my career and that was a good lesson. Ultimately, if you are going to be married to those people you’ve got to like them.”
The company employs 80 staff in New Zealand and
has agents and distributors in the UK and on the east and west coasts of the US. As managing director and head designer Walker is on top of both the big picture and the little details across all the territories.
“My job is to ensure the ideas are really good and the brand is protected. Everything that goes out around the brand has to be correct and share the same DNA,” she says.
“For example, one of our partners prepared a brand document which got sent out to retailers and didn’t run it by me first. When I saw it, it wasn’t good enough and it had to be recalled and done properly.”
It sounds exhausting but the payoff is big, she says.
“You know why I am not exhausted? Because the work when it’s good – and hopefully it is most of the time - it’s energising and it pays you back.
“When you see your clothes looking good in a window it gives you that lift and I love it.”
Unlimited magazine, published by Fairfax Media, is New Zealand's leading digital business magazine dedicated to entrepreneurs, start-ups, leaders and innovators. To subscribe, go to www.mags4gifts.co.nz