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Yahoo Finance’s Brian Sozzi sits down with Ciara, The House of LR&C Co-Founder, and Christine Day, The House of LR&C President & Co-Founder, to discuss their new venture together as well as what’s driving fashion, and their business goals in the coming years.
BRIAN SOZZI: Former Lululemon CEO Christine Day has teamed up with Grammy Award-winning artist Ciara to launch a different kind of fashion house. The House of LR&C aims to do good in the business of fashion by doing good for the world. Christine Day and Ciara join me now. Good to see you both. Christine, I have to start with you. How did Ciara talk you to dust off your power roots to get back into this business?
CHRISTINE DAY: Well, C and I actually met through Russell Wilson, her husband. And Russell and I have known each other for about seven years, and I've kind of become an unofficial mentor to him. And he asked me for help with the Good Man Brand, which was a brand that he started with a couple of ex-Nordstrom people about 4 and 1/2 years ago, almost five years ago now. And it really was just a private line at Nordstrom's. So he asked for some help in looking at the business model and bringing the brand more to life online. And so, I started helping.
And then he asked me-- and then he met C because I knew him before he met C. And she came into the world, a lovely human being. And we just connected and started talking about what we love about fashion, the world, purpose, values, and just realized there was space to do something. And so, we created the House together. And we created Human Nation. And we have an amazing women's brand that will be launching in August. But it was really just a story of shared values, connection, and friendship that started this.
BRIAN SOZZI: Well, Ciara, I don't know you. We've never talked before, so I will call you Ciara, not C, but maybe the next time we talk. How-- you have a lot going on. You're making music. You're a mother of three. Why now? Why have you gotten into the apparel business?
CIARA: Oh my goodness, it's been a long-time dream of mine, you know? And when this opportunity came along, it was perfect on every level. And as Christine talked about-- Russ was raving about Christine. And Christine is like family to us, and she's really a blessing for many different reasons. And the timing just felt right, you know?
And when you set up any business, I think you want to make sure you go with like-minded individuals, but also people that know what they're doing. And it couldn't have been any better for things to align the way they did. And we just had so much respect for Christine and what she's already done. And what we want to do, we want to work with the best. And so, that was really important to us.
And at the time, it just felt right. You know, really, like I say, it's a dream come true. And it feels like and as we're doing it, like, in every step, it's like, this is really the part of the dream. And it feels just like it. So it's been amazing so far.
BRIAN SOZZI: Ciara, I would characterize you as a fashion icon, really. Why-- what is not happening in the fashion industry that you are saying, you know what? I have to start this company. There's a hole here. The industry is not doing something, and I can do it better.
CIARA: Well, I think the greatest thing that we all really-- all of us, you know, from myself to Russ and Christine is just knowing the values that we're building our house on. It's really important. You know, the House of LRC stands for love, respect, and care. And I think the world needs a lot more of love, respect, and care-- love, respect, and care for ourselves, love, respect, and care for each other. And so, it just really-- you know, it just felt-- it felt really good to be able to have a focal point and to have a foundation.
And I think that when you think about a lot of brands, there's not really that component to it. And especially for us, the give back component was also just as important. At our house, we give back what we receive. And so just being able to know that while we're out here, living our dreams through fashion, we're also impacting at the same time.
And so, you know, I think when you look at it, at the end of the day, that's what it's all about. It's like, how did we-- you know, what did we really do? Yes, we were able to be creative and live out our creative dreams. We were also able to make a difference in the same breath. And so, I think that's what kind of allowed us to really set ourselves apart, is having that foundation, having, you know, something that's deeper than the material.
And so, I really believe that that's what allows us to set ourselves apart. Christine, I know you would say the same. As far as what our foundation, how we built-- what we built our foundation of our house on, it really is really important to put out the love, respect, and care in the world. And, you know-- and it's been a-- it's really, really fun and exciting because you really feel that thing happening.
Great example is with the Good Man Brand. We've already been able to give back $1.6 million through our Why Not You Foundation to organizations like Friends of the Children. And those organizations, they provide mentors for each child that would be least likely to succeed. And when you see these kids going through every step of their lives and actually living out their dreams, you go, this is why we do what we do.
And so, it's deeper than just the material item. It's like, we're actually making a difference in the process. And it's really real. Like, you really see it materializing. And I just think that you don't really see that happening in fashion. And so, that's been really beautiful.
BRIAN SOZZI: Christine, talk to us about what Ciara just mentioned, the giving back component of this brand. Now you spent over 20 years in executive positions at Starbucks, in many respects, a leadership company in giving back to workers and its constituents, really, in its neighborhoods. But the apparel industry has been different. I wouldn't say they have given back to the extent as a company like Starbucks or other companies. What's the barrier there in the apparel industry? Why are you not hearing a lot of messages like that?
CHRISTINE DAY: I think maybe there's too much focus on sometimes the designer as artists, as opposed to the business as what I call the values economic chain, where you're really creating value at every stage, from factory to your employees that work for you. And that was really a lesson I did learn at Starbucks. You know, the way that Starbucks went deep, all the way to the coffee growers, all the way to how they treated their people on their partners on the front line, and how they engaged and worked on communities, I mean, I think that's really a model, and yet, created a best of class company, right? And a very good value for shareholders.
And I think that's what we're up to. So there's really for me six principles that we've really tried to organize the company around. And it's purpose and value led, right? It's inclusion. So what you see in Human Nation is including all genders, all body types, giving a voice for people to communicate because I think fashion is one of the few things, along with music and the arts, that allow for self-expression, plus unity in the multitude, right? And I think that's what's powerful.
Community is another one of our really big principles and how we engage. And we have lots of ways we do that, right, all the way through from the design process. We set up what we call rival communities. So we have a built-in set of 400 Gen Z's for Human Nation that we ask them, what do you think the top selling color or the T-shirt and design? So it's very participatory. And then, the community that we do through our outreach and giving, so that community participation.
Sustainability is also huge about what we do. What I love about creating a company today with all the experiences, we've set it up right from the beginning as a public benefit corp. We signed up to create a company that can meet the UN's 17 standards for sustainability and transparency. So we're a pending B corp right now already right from the beginning. And every material choice, every factory that we use, I can live those values. I'm not fixing something. And that, I think, is really a great opportunity to build something.
And my goal, frankly, is to squeeze out some of those fast fashion companies that I think have taken advantage of the environment of the workers, the factory workers, the countries that, you know, it's about raising the bar. And that's one of the reasons why we chose Kohl's as one of our first partners. Obviously, a deep long-time friendship for me with Michelle Goss. And C had done some work with them on Nine West and shoes that was very successful.
So, right from the beginning, we collaborated with Kohl's. And my goal there was to create a price point that was very accessible and create a reach that actually reached into some of, I think, those less sustainable, less participatory to raise the bar in the fashion industry. So that was-- and it created the discipline for us about creating great products that met all those standards at a great value, yet still had a good gross margin from the business perspective.
So, there's lots of exciting things going on here for me about bringing all of this to life and a lot of fun working with Russ and C, who have a very natural talent for this space.
BRIAN SOZZI: And I apologize to you both if you hear a dog barking. I'm working from home. I've been here for almost a year. And this is just the reality of my current situation, along with a lot of other people. But Ciara, on the business, where do you see the business a year from now?
CIARA: Did you say a year from now?
BRIAN SOZZI: Yeah.
CIARA: A year from now, oh my goodness. I mean, I think the start we're having so far is pretty tremendous and exciting. Perhaps we would have went another level up. We would have doubled where we are from start. Christine, you know, she really can handle it all on the technical side, the numbers side of it all. But I like to believe that next year is going to be even better than the year before.
And it's like, we're going to be exactly where we want to be. And I think the greatest thing is that having the community of all our brands activating and creating that community in general of conversation and just finding-- continuing to find more unique ways to activate with the world and get everybody to come along with us on our mission, I think that that's what I'm looking forward to.
A great example with Human Nation, we've already been starting off finding ways to, like, really speak to the audience of the Human Nation, which is really the Gen Z group, and to be able to do things like the fun TikTok activations, and just finding unique ways to extend the legs of the fashion part of it, but again, to really make it materialize and feel real to everyone, so that when they're coming along with us, it does feel like it's something bigger than fashion. It's like, yeah, I'm looking fly, but I'm also impacting at the same time.
So I like to believe we would have went double or triple where we started from the beginning. But I do believe we'll definitely be another level up in where we started from. And so, that's what I would say.
BRIAN SOZZI: Christine, she sounds like a real public company CEO already, you know?
CHRISTINE DAY: I have her in training.
BRIAN SOZZI: Christine, how do you-- you're no stranger, Christine, to scaling up brands. I was a former stock analyst while you helped grow Lululemon significantly. I saw what you did there. What are your scaling up plans now with this brand from here?
CHRISTINE DAY: You know, even with the pandemic, we've been able to be one of the top-selling brands in men's at Nordstrom's with the strategies that I deployed, particularly around inventory, because we knew that Nordstrom would have to cut back. So a lot of the lessons I learned from 2008 and '09, '10, really challenging years in running Lululemon, was all about inventory strategy.
So we were able to actually predict-- I think I was within $30,000 of what I predicted they would do. So that allowed us to have a very successful buy, have a lot of newness, and drove sales for Nordstrom's. Like, the jetset jogger that we produce is in the top 1% of searched items for men's at Nordstrom's.
So creating great product has definitely been part of the strategy, really help focusing on driving the gross margins and redoing the supply chain. But Good Man Brand has now-- it's tripled, and our DTC penetration of overall sales went from, like, 2% to now we're closing in on 15%. So we've been able to drive the business with that.
Human Nation launch was also very successful with Kohl's. We've just told the last two weeks we've been the top-selling brand in their curated group in stores. So we're driving traffic to stores for Kohl's. So, really excited about creating some brands that are resonating with consumers with great product, great value. And we're working hard on making that a great business model. And we do expect we'll have tripled the business by the end of this year in 2021. And so, we're looking forward in 2022, 2023 to be able to tell a great shareholder story.
BRIAN SOZZI: I'd be remiss before I let you both go, and I'll put this question to both of you. Ciara, you first. We've had a historic change in the White House. A lot of optimism here post-Inauguration Day. What's your hope for the country now?
CIARA: First of all, I have to say yay! You know what? I think I probably speak for most of the rest of the world that you could feel the sense of a fresh start immediately in that moment of yesterday. And I wrote on my Instagram and all my platforms, a new hope, new beginnings. And so, I really have faith in, you know, the world continuing to come together.
I know it's been a trying-- I mean, these past few years been very trying, especially the last one. But I do believe that there's this new energy that you can feel in the air. You kind of felt like America and the rest of the world took a deep breath. And they let out a lot when they released that breath. And so, I think within that, I just-- like I say, there's a new hope. I have faith that we are going to get better.
And there's been so much conversation and activa-- like, conversation and activation that's been happening that I think is very necessary during these times that I believe is also going to be a part of contributing to us getting better as a whole, as people, as a world. I love a lot of things that Joe Biden-- President Joe Biden spoke about in reference to his vision for our country and for the nation and repairing some relationships. And just all the things that he was speaking about, you know, I think it really kind of helped people feel a little bit better at home.
And so, I'm believing in that. I'm excited for what's to come. And then, of course, I mean, I can get emotional when I think about our first ever vice president, female vice president, Black woman. Huh! I mean, like, even talking about it, it's so much inspiration in that. And so, it brings you so much joy. It just makes you excited about what's to come because even that within itself symbolizes how far we've come.
And, you know, I spoke about it I think the day that it was confirmed as she was president-- I mean, sorry, Vice President Kamala Harris is going to be the running mate with Joe Biden. When you saw that, you realized the marker was 100 years or century since women had the first right to vote. And so, you think about, like, how far we've come. It makes me excited about how far we're going to be able to go and my daughter. And just so many thoughts come to my mind, and I'm excited for it all. I'm hopeful. And I'm looking forward to the fresh days that we're about to start embarking on and just the times ahead. I'm really hopeful.
BRIAN SOZZI: Sure, how about you, Christine?
CHRISTINE DAY: I think what I would hope for is that we're going to enter a phase of what I would call civil disagreement. And I think business's role to support this new administration president is, we have a responsibility to thread the needle between the things that society is concerned about-- the environment, racial divide, the inequity that we see in disparaging income levels, and rebuilding infrastructure.
So I think business has to step up and stop being so entrenched in, whether it's protectionism or just only focusing on profits and not the environment. So it's our responsibility to live what I call that values economic chain and do it in a way that supports what our nation needs. And I think that's the type of company we're trying to be. And I hope that this administration creates the environment that's collaborative with business that allows us to thread that needle, use our innovation and our technology to create a better society.
BRIAN SOZZI: Extremely well said. Amazing. And we'll leave it there. I'm rooting for you both on this brand. I think it's the message is phenomenal, and not enough apparel retailers are doing this. So good luck. I look forward to following this journey. Christine Day and Ciara, stay safe. I'll talk to you both soon.
CHRISTINE DAY: Thank you, Brian.
CIARA: Thank you so much. Thank you very much, Brian. More love, more respect, and more care.
BRIAN SOZZI: You better believe it.