Suitsupply: Fokke de Jong

When Fokke de Jong started selling suits out of his dorm room in Amsterdam in the late 90's, he wasn’t planning on becoming the next Tom Ford—he just wanted to supply luxury suits at an affordable price. But he was so successful that around 2000, Suitsupply went from his side hustle to his full-time gig. Fokke sourced the best fabrics and production in Italy, and grew the business by selling his wares online long before that was the norm. Suitsupply thrived on Fokke's unorthodox ideas, like when he opened his first physical shop by the side of a highway, or when he goaded competition into suing him over ads. By 2011, Suitsupply had grown beyond Holland, opening stores in cities like London, Milan, and New York. Today, they have over 150 locations worldwide. This episode was produced by J. C. Howard, with music by Ramtin Arablouei Edited by Casey Herman, with research help from Sam Paulson. You can follow HIBT on Twitter https://twitter.com/HowIBuiltThis & Instagram https://www.instagram.com/howibuiltthis, and email us at [email protected] mailto:[email protected]. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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• 0:00Guy Raz?

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• 0:46Guy Raz?

  build the prototype, analyze the market, maybe even come up with the idea, what separates the people who actually build something from everyone else? I don't have a clean answer yet, so I've been sitting with it with Claude. There's hope in hard questions. Ask yours at claude.ai/hibt. We get support from U.S. Bank. A question I love asking founders. What's the one decision you almost didn't make? The one that changed everything? Because it's never the obvious stuff. It's never, I decided to start a company. It's the small, boring, Tuesday afternoon decision you barely remember making until you realize it's the reason everything after it either worked or didn't.

• 1:32Guy Raz?

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• 2:16Guy Raz?

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• 3:00Guy Raz?

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• 3:45Guy Raz?

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• 4:27Guy Raz?

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• 5:11Speaker 01

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• 5:23Guy Raz?

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• 6:08Guy Raz?

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• 6:13Guy Raz?

  Does your team want a website that looks and feels handcrafted but is still fast to ship? Well, Framer is built exactly for that. With Framer, you design on a visual canvas with responsive layouts, hosting, and a CMS built in, so the work is production-ready from day one. And you can get it done with help from Framer's AI agents. Framer is the AI website builder that helps creators, teams, and businesses ship production-ready sites faster than ever while getting every detail right. Prompt, inspect, edit, and publish in one place at a whole new pace. AI agents and humans work together.

• 6:55Guy Raz?

  The agents bring speed and scale, and people bring taste, judgment, and control. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/built for 30% off a Framer Pro annual plan. That's framer.com/built. Rules and restrictions may apply. Hey, it's Guy here. And before we get to the show, you know that feeling when you think back to some of your early work and you cringe? Well, I recently spoke with Tom Hanks, and he told me he gets that feeling too. He can't even watch his own movies. And for a man widely known as the nicest person in Hollywood,

• 7:38Guy Raz?

  Tom Hanks also struggles with what it means to be authentic. Check out our conversation on my other podcast, The Great Creators. Just search for The Great Creators with Guy Raz wherever you listen to podcasts. And now, on to today's show.

• 8:01Speaker 02

  There was a piece in the Wall Street Journal that did a blind test on suiting. And our website blew up. And I'm like, OK, we got to capture this momentum. I mean, this is a dream. We're doing an opening. We have all kinds of press coming. You know, I think 600, 700 people on the guest list. This was the moment. And two days before opening, I get a call from this landlord. I say, "Hern, you heard you're going to open tomorrow." I said, "Yeah, yeah, yeah, we're all done. I mean, you know, big opening. Yeah, you're still, I don't have your permit closed out, so that's not going to happen." And I'm like... Shit.

• 8:50Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 9:02Guy Raz?

  I'm Guy Raz, and on the show today, how Focaccia De Young started by selling suits out of his dorm room in Amsterdam and grew Suit Supply into a global fashion brand.

• 9:20Guy Raz?

  Today's story is about improvising, and improvising is an important word here because every single entrepreneur will have to just figure it out multiple times along their journey. For example, you can't plan for a city inspector to threaten to shut down your business because you violated an obscure zoning code. You can't plan on a supplier refusing to sell you goods. You can't plan on the factory that makes your stuff messing up all your product. You can't plan on your well-laid plan falling apart. But no matter what happens, your job is to solve the problem in a creative way and preferably quickly.

• 10:01Guy Raz?

  And that is the story of Suit Supply. It's a fashion brand with around 150 locations around the world. Suit Supply sells men's clothing and also makes made-to-measure suits. And like some of the higher-end designer brands, all of its fabrics come from Italy. But Suit Supply sells high-quality suits at a fraction of the price. This was Focaccia De Young's model from the very beginning, to build an efficient manufacturing and supply chain that would allow him to cut out unnecessary costs and drastically reduce the price of a high-end suit. And by 2000, the year Suit Supply was officially founded,

• 10:42Guy Raz?

  Focaccia was selling those suits online. In fact, Suit Supply was one of the earliest e-commerce retailers in Europe. And today, around a third of its business happens online.

• 10:54Guy Raz?

  Fokke was born in the early 1970s and grew up in a small town in the Netherlands. He studied law and economics at the University of Amsterdam. And after graduating, he got one of those fancy management training jobs at Procter & Gamble, a job that practically guaranteed a stable career. But it wasn't the life Fokke was looking for. He wanted to be his own boss. And it just so happened that while he was a student in the late 1990s, Fokke came up with the idea for selling suits, which began when he needed to buy one himself.

• 11:29Speaker 02

  When my grandfather died at a very old age, for his funeral, I needed a suit, and a nice suit. I want to have a nice suit. And then somebody knew a guy that knew a guy that was selling suits straight out of Italy from a factory. And I met this guy, bought a suit. And then I thought, OK, he was using this connection to buy leftover fabrics that were produced into suits. And it was very nice product. I was still studying. I needed a sort of a, you know, some ways of actually making a little money to get by. And I thought, you know what? I'm going to sell suits to my fellow students for their interviews, graduation parties, and all that kind of stuff.

• 12:09Guy Raz?

  Wait, hold on, hold on. You said, "I'm going to sell suits to my fellow college students." But how were you going to? You were going to go get them from that same factory or from that guy that you bought?

• 12:21Speaker 02

  I would get that from that guy that, you know?

• 12:23Guy Raz?

  You're basically saying, hey, let me just buy a bunch of suits from you, and then I'll resell them. I'll mark them up 20% or something.

• 12:29Speaker 02

  Exactly, right. And he was giving me a discount if I bought some more. And then, you know, I was basically a little distributor and folding up my bed in my dorm room when some of my buddies came in to come and fit. And then... The problem was with student business, it was only a few times a year, right?

• 12:49Guy Raz?

  Yeah.

• 12:50Speaker 02

  When there were graduations or when there were parties, right?

• 12:53Guy Raz?

  Yeah.

• 12:53Speaker 02

  So, you know, it was not consistent. So when these events were not there, I was like, okay, you know, where else can I sell them? And that's how I ended up ringing doorbells.

• 13:04Guy Raz?

  Of businesses, basically.

• 13:06Speaker 02

  Of businesses, yeah. I just went in, talked to the reception.

• 13:08Guy Raz?

  Small businesses.

• 13:10Speaker 02

  No, we went all the way up to, you know, even I remember having events in the Dutch National Bank.

• 13:18Guy Raz?

  Wow.

• 13:18Speaker 02

  And Heineken.

• 13:20Guy Raz?

  You'd what? You'd go to the receptionist and you'd say, hey, I'm selling suits and I'd love to show what I am, you know, could you guys organize a room for me where I could bring my stuff?

• 13:30Speaker 02

  It's not that. So, you know, you sort of, you have to talk to them a little bit. And, you know, it's that we did these events there and there. It's maybe something for you guys. I mean, do you think the guys are dressing well here? And they said, no, they could use some help. They would always say they could use some help. And that was sort of the hook in.

• 13:46Guy Raz?

  Okay. And then I guess at some point you decide to actually go to that factory in Italy to say, you know what? I'm working with this guy, but why don't I just go directly to the factory in Italy and see if I could just buy it from them?

• 13:57Speaker 02

  Yeah, exactly.

• 13:58Guy Raz?

  And did that, by the way, did that guy that you were buying them from, did he get annoyed that you were bypassing the middleman?

• 14:05Speaker 02

  No, I sort of, at some point, my business got a little bigger, right? And this, this guy that was giving me stuff was running to its limits, right?

• 14:14Guy Raz?

  How many, how many suits were you selling a week?

• 14:17Speaker 02

  I was, I think, you know, I did, every Friday I had one of these events.

• 14:23Speaker 02

  Then I think I was doing probably forty, fifty a week.

• 14:27Guy Raz?

  Forty suits a week?

• 14:28Speaker 02

  Something like that, yeah. The, the problem was what, what actually happened was, was his business model. And he made this sort of deal where the factory in Italy was producing suits for some of the bigger brands, right? And they would tell these brands, oh yeah, well, you give me this cloth to make you a product and we need three point one meter to make this product. But in reality, when they were really efficient, they only needed three meters or two point nine. So, you know, they always kept over and they left over a little bit of fabric that they then made the same product for and they just resold it through that channel.

• 15:05Guy Raz?

  Wow. So they would essentially have excess material that was gonna be for like, I don't know, let's just say a name, Armani or something, whatever, whatever brand. They had extra material. And they're like, well, let's just make a couple more suits and we'll just sell them without the label. And

• 15:18Speaker 02

  Exactly.

• 15:19Guy Raz?

  Men would show up and say, yeah, you know, you can get this quarter of the price that it would cost in the store.

• 15:24Speaker 02

  It was, yeah, it was a quarter of the price. And then what happened, of course, I was selling more. And I was telling the guys, I said, but can't you give me more? And he wouldn't have more because this excess fabrics, they ran out. So then I said, okay, but let me then talk to your source to see if I can work something out with them because I have, I think I have a bigger market.

• 15:44Guy Raz?

  Wow. All right. So you go to this factory and what did you say to them?

• 15:49Speaker 02

  I just said, I need more suits. And then I sort of found out what the whole business model was and why it was constrained. And they said, well, we can give you more, but then you have to buy your own fabric.

• 16:02Guy Raz?

  I see. So they would, they were willing to make the suits for you, but, but you had to buy the fabric?

• 16:07Speaker 02

  Yeah.

• 16:07Guy Raz?

  So you could basically get these factories to make an unlabeled, you know, unbranded suit, but the same quality for a third of the price or a fourth of the price?

• 16:20Speaker 02

  Yes. And what I sort of, you know, I was new to this business. I had no idea how it worked, right? It's not like I was in my twenties and wanted to be the next Tom Ford or something. I just, you know, it was, it was, it sort of started as a side hustle. And then I found out a little bit because I had to go through the motions of how inefficient that whole business worked. Because this factory, they made a beautiful product.

• 16:49Guy Raz?

  Yeah.

• 16:50Speaker 02

  But then, you know, if you look at how it was sold, they made a product for a brand, and then this brand goes into a trade show. And in this trade show, the customers, and there's agents bringing in these customers or agents selling it to, you know, independent stores again. And if you then add it all up, because I sort of knew how much this suit costs, right? And how much I could sell it for, which was a fourth of the price, it was at a luxury store. It was the same product.

• 17:25Speaker 02

  So then you start figuring out, why is that? How is that possible? And who is making all the money here?

• 17:34Speaker 02

  And then you find out that it's a lot of inefficiency of how the whole business was structured. That price ends up to be the price at some point.

• 17:44Guy Raz?

  Right.

• 17:44Speaker 02

  And my, my distribution was very different. I didn't have to deal with all these people in between.

• 17:51Guy Raz?

  Well, you were the distributor. You were the guy that was literally going to the trunk shows.

• 17:55Speaker 02

  Exactly. I didn't have this whole big overhead. I didn't have occupancy costs. I didn't have expensive stores. That was, you know, remember it was in 2000, right? It was not the direct to consumer market was not really, you know, invented yet. I was basically able to reinvent the whole business model from scratch.

• 18:19Guy Raz?

  You were also able to take advantage of changes in European law, right? Which is, which is that you could have, have those shipped from Italy without dealing with customs or taxes or, I mean, because it was now relatively easy to, to get things back and forth between European countries.

• 18:35Speaker 02

  Yeah. I mean, that, that, it was at the time that Europe was becoming one market, but also one currency. And then it also coincided with the moment that e-commerce started to happen. I think that was the biggest change at the time. So I made a website and I was at this whole idea of selling high quality suiting shirts and, you know, what goes with it online.

• 19:00Guy Raz?

  Online, yeah.

• 19:02Speaker 02

  And I think at some point, that was the point that I sort of quit Procter and Gamble. I thought, you know, this is something I have in my hands now, you know? Let me focus on building something around this.

• 19:16Guy Raz?

  You know, I'm curious because we've had people on the show, right? Who've done things like, like work at a big company like Procter and Gamble for a few years and then, you know, before going on to start, to start their own thing. And the argument is that, you know, this is going to give you exposure to a whole new world and how big corporation runs. And it's going to give you insights and connections that, you know, that might help you build your own business, right? So I know you decided to leave, but do you think that if you had stayed at P and G for longer, that, that might've been beneficial?

• 19:47Speaker 02

  No, I don't think so.

• 19:51Speaker 02

  You know, what are you gonna learn in an organization like that is, you know, first of all, fifty, sixty percent of the of the effort in an organization like that goes to the political process, right? Positioning yourself well and all that kind of stuff. It is not, it's not just doing stuff, right? There's a whole lot of thing that that goes along with it. And there's also a risk, right? Comfortably, you know, you might think, okay, this is great, I make some money, et cetera. And are you actually then gonna make the jump? Five years from now, when you're beginning your thirties, you make this nice salary, you bought this house, you met your first, you know, wife or a friend or, you know, are you then gonna make the jump? And the question is, how relevant is the, are those experiences of being in a big company, right?

• 20:37Speaker 02

  They're probably very irrelevant at some point if you have your own company that's really big, but at the beginning, you know, they're not, I don't think they're relevant. The, the, the most things you learn are about just doing stuff.

• 20:53Guy Raz?

  All right. So you leave Procter and Gamble and you realize and you decide, I'm gonna focus my attention on the suit business. When you first went to that factory in Italy and you're in your early twenties and you're like, hey, can you make me a bunch of suits? They, they, they were like, yeah, no problem. I mean, they, they took you seriously and it was relatively straightforward. I mean, this is, these are factories that we're used to working with big brands and big labels. So why, why would they be willing to work with like a twenty-three-year-old kid?

• 21:24Speaker 02

  Well, that's a good question, but I was, you know, buying already some of the leftover stuff, right? So I had a relationship with him.

• 21:31Guy Raz?

  Yeah.

• 21:31Speaker 02

  And I was actually paying, you know? It was, I was a legit customer. I was paying them cash.

• 21:37Guy Raz?

  Yeah.

• 21:37Speaker 02

  And I came back and I got more and I paid it. So, you know, getting it sewed together was not the hardest thing in this factory. What was the hardest thing was actually getting fabric. The, the, the fabric business was in Como, right? In the, in the north of Italy.

• 21:55Guy Raz?

  Around Lake Como.

• 21:56Speaker 02

  Around Lake Como.

• 21:57Guy Raz?

  Okay.

• 21:57Speaker 02

  And, you know, it's there because it ready for a few hundred years because the water coming from the mountain is extremely

• 22:05Speaker 02

  soft and it's great to wash wool in and that's where the best fabrics in the world come from. And I wanted to have the best fabrics. And these, these, the only way to do that is to put orders in trade shows that they would have. You know, they would have this every season, this convention on the Lake Como, very fancy. But I was not able to get invited there. You know, you have to be very legit to, to get in there.

• 22:31Guy Raz?

  Yeah.

• 22:31Speaker 02

  And, you know, I had to do that through somebody else that was, you know, already a customer of some of these, these mills to be able to buy fabric.

• 22:41Guy Raz?

  Right, because it's a, these are relationship businesses. It's not like you can just call up and say, hey, can I order 20? I mean, it might be different today, but then you couldn't just say, can I order, you know, 40 reams of fabric? They only sold to specific clients, right?

• 22:56Speaker 02

  Yeah, I mean, you know, these were the, the mills like Vitale, Barbera, Zenja, all these kind of guys. They were also really protective for their, you know, they didn't sell their, their, their high end fabrics and then sold for a price that they could have never imagined their product was being sold for.

• 23:14Guy Raz?

  So how are you able to, so you had to find somebody who was an existing customer and have them buy it for you? And then you bought it from them?

• 23:21Speaker 02

  Exactly. It was just getting in between.

• 23:23Guy Raz?

  How did you find that person?

• 23:26Speaker 02

  That person already had a, you know, a little business that he was doing in Holland.

• 23:32Guy Raz?

  Okay.

• 23:32Speaker 02

  And I just paid him a markup.

• 23:34Guy Raz?

  Yeah. It's, it's a little bit like wine, like you can't just go to a burgundy maker and just go and buy their wine. Like they have, or they're selling it. It's already spoken for, like some restaurants are going to get it and some collectors are going to get it and some shops. And that's it. And if you want to buy that wine, you've got to go to the other person who's, who's already on that list to get it. You can't just get it.

• 23:55Speaker 02

  Yes, and what I also learned is that, you know, as, these people are also running businesses, right? And. If you are, if you're able to show that you're actually, you know, you're legit, you're doing business, you can convince them of doing business with you. It took me some time, you know, for the first years they wouldn't even talk to me, right?

• 24:13Guy Raz?

  Yeah.

• 24:14Speaker 02

  And, and, you know, and then you get a few ones on board and see how, you know, that was especially when we went into online and they saw that we were maybe potentially the new thing that was gonna happen in the business. Stuff started opening up and now our business is by far the biggest customer of all these mills in Italy.

• 24:34Guy Raz?

  All right, you were the pariah then, now obviously it's changed, but let's go back to when you, even before you were the pariah, which is you're just a small time guy trying to just do a hustle here, getting a bunch of suits and selling them, but now you're buying more and, and still even in those early days, you're not doing this through a shop, you're doing this really just by going to businesses, from business to business in Amsterdam mainly and trying to sell suits. And when did you actually open your first brick and mortar store? What year?

• 25:06Speaker 02

  Two thousand.

• 25:07Guy Raz?

  Two thousand, okay.

• 25:08Speaker 02

  What happened is, and I think that was really the breakthrough, because, you know, now I'm having this online business, an online store, and it went pretty okay, it went pretty well, you know, people were buying stuff, but I, with this product, people wanted to have, you know, a place where they can do their alterations, fitting, see the product, that's still the case actually with fashion, that people wanna have some physical presence. So then I was thinking, okay, where, because I didn't have a lot of money to open a whole, you know, store on an expensive location, and I was thinking, okay, where, if I'm looking at my customers, where are they? You know, and most customers were driving and commuting, you know, back and forth from

• 25:50Speaker 02

  offices and appointments between the two biggest cities in Holland, Rotterdam and Amsterdam, big highway. So I thought, you know what, I'm gonna make this whole, a little experience center and pickup point and tailoring and where can people, you know, pick up their product, see it, next to the highway.

• 26:07Guy Raz?

  On the highway, between Rotterdam and Amsterdam?

• 26:09Speaker 02

  Yeah.

• 26:09Guy Raz?

  Because that's, that's where the business commuters were going.

• 26:12Speaker 02

  That's where the business commuters were going. Which was, of course, insane in the eyes of the whole industry.

• 26:19Guy Raz?

  Insane that it was off the highway?

• 26:21Speaker 02

  Well, insane to have a business where you sell high-end quality suits on the highway.

• 26:27Guy Raz?

  Oh, instead of on a fancy street in a downtown?

• 26:30Speaker 02

  Instead of on a fancy street. I think the newspapers were writing about this crazy store that was selling high-end suiting next to the highway, online, but now opening stores. This was gonna revolutionize retail and, you know, all the high-end streets in the middle of the cities were gonna disappear, and this was all gonna happen, right? People, when new change happened, they were very hyperbolic. And so what happened was, you know, I opened this store, which was completely logical in my mind. I mean, I was not really attached to this playbook. I just wanted to have a store somewhere where it was the most easiest place where I thought my customers would be. Yeah, I was surprised with it, but what the effect of our business was,

• 27:15Speaker 02

  suddenly people were queuing up because we had so much PR.

• 27:20Guy Raz?

  And this store, as you say, off the highway, was not in Amsterdam. It was, I think, it was closer to like Schiphol Airport, right?

• 27:28Speaker 02

  Exactly. It was really next to a highway. You had a gas station, you had a store where they were selling magazines, cigarettes, and all that kind of stuff.

• 27:37Guy Raz?

  Yep.

• 27:37Speaker 02

  And I rented a space next to it. And, you know, that was basically it.

• 27:43Guy Raz?

  And you called it Suit Supply?

• 27:45Speaker 02

  I called it Suit Supply.

• 27:47Guy Raz?

  And, because that's what it was, you were supplying suits?

• 27:50Speaker 02

  I was like, you know, as straightforward as I could think.

• 27:54Guy Raz?

  It's a very utilitarian name. It doesn't actually scream out luxury. Like, you hear that word, Suit Supply, and you wouldn't think luxury. You would think, okay, that's just, that's what it does.

• 28:05Speaker 02

  Yeah, but at the time, it made sense because it was, we were direct to consumer, you know, very, you know, disrupting the market. And it was sort of a name that went well with that time moment. We were seen as the new, the new solution to everything.

• 28:21Guy Raz?

  Yeah.

• 28:22Speaker 02

  Which was also, by the way, imposed an immediate problem. Because these local retailers that were around it were looking at us with, you know, a little bit of an envy, I think.

• 28:33Guy Raz?

  You mean competitive brands?

• 28:35Speaker 02

  Competitors, yeah.

• 28:36Guy Raz?

  Yeah.

• 28:36Speaker 02

  And what they did, they said to the municipality, These guys are in somewhere where you cannot have retail. This is not zoned for retail. It's Gorilla Retail.

• 28:47Guy Raz?

  They said this store can't be there next to a gas station because it's not a... Wait, why? But why would they say that? What argument would they have to make that?

• 28:54Speaker 02

  Well, they had the argument that the unit that I was in was not zoned for retail.

• 29:00Guy Raz?

  Oh, I see. Okay.

• 29:02Speaker 02

  And then I get this, you know, guy from the municipality coming in and, you know, we're helping guys. And he said, yes, well, sorry, you're having retail here. You cannot have that. You need to close down.

• 29:11Guy Raz?

  Huh.

• 29:12Speaker 02

  I'm like, shit. You know, I put my 10,000 bucks I had, that 15,000 bucks. I put everything in that store. And these guys were seriously coming to it with a letter that we were not zoned for retail and we had to close down.

• 29:26Guy Raz?

  I mean, I'm totally sympathetic to you. Like, I would have been pissed. But that is a, an amateur move, right? To open a store where it's not zoned for that. Like, you should have known.

• 29:37Speaker 02

  Yeah, should have known. Well, I mean, how could I have known that? Because next to me, there was two units, right? I was also like, I can't believe this. This is actually true, right? Because it was so obvious that it should have been zoned for retail. And I went to the municipality and I just wanted to see the plans. I wanted to see the blueprints. And I got the, they said, well, you can go there. Just wait for you in this little room and we'll bring you the blueprints. And then you could sit in that room and went over these big pile of blueprints. And then I saw that one of my building and it said exactly, that unit next to us said, with pencil, it was written in there. It said store and my unit said nothing.

• 30:15Speaker 02

  And so then I thought, okay. I took a pen. I practiced as long as I could to, you know, have almost the same handwriting as the unit where it was store written in. And I just penciled store in my unit. And then I went back to the municipality and said, but guys, what do you mean? On these, these blueprints, it says store. I said, oh, oh, okay. Oh, we didn't know.

• 30:41Guy Raz?

  That was it.

• 30:41Speaker 02

  That was it.

• 30:42Guy Raz?

  You would basically just handwrite store in there. And you're like, guys, you missed it. It is here. It says store. And they're like, oh, okay. All right.

• 30:50Speaker 02

  Exactly.

• 30:52Guy Raz?

  It just seems crazy.

• 30:54Speaker 02

  They just wanted to get rid of the problem, right? They had complaining people. They were probably sympathetic of what we were doing, but just needed an argument of getting rid of the problem. I didn't have, I didn't know how to solve this problem other than that.

• 31:07Guy Raz?

  Wow.

• 31:07Speaker 02

  And I never heard anything of them ever since.

• 31:13Guy Raz?

  When we come back in just a moment, Foca takes suit supply global, decides to move production out of Italy and in the process, almost destroys the business. Stay with us. I'm Guy Raz and you're listening to How I Built This.

• 31:36Guy Raz?

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• 32:21Guy Raz?

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• 33:32Guy Raz?

  Before we get back to the show, please make sure to click the Follow button on your podcast app so you never miss a new episode of the show. It's usually just at the top of the app and it's totally free.

• 33:50Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2001 and Suit Supply has been in business for a year and it's doing pretty well. In fact, Foca just made under 10 million euros in revenue just selling suits in one store and online. And then in 2002, Foca decides to take on an investment from a larger Dutch fashion brand.

• 34:15Speaker 02

  I thought at the time it was going to be beneficial for us to be part of a bigger business and that was public and we could learn something there. But it also, the other side was that I didn't give away any governance. So it was still fully in control.

• 34:34Guy Raz?

  Yeah.

• 34:34Speaker 02

  And basically their incentive was they needed to affiliate them with something that was online so that they could tell the markets, "Hey, guys, we have a strategy of online and we're also looking at online and this is the business that we've invested some money in." At the end of the day, we were not part of that business, but sort of... You know, next to or, you know, could tap into some of the resources. I don't know if that was really that helpful, to be honest.

• 35:02Guy Raz?

  Yeah, because these were, these were just really Dutch fashion brands, right?

• 35:06Speaker 02

  Very Dutch focused.

• 35:07Guy Raz?

  What I wonder though is they put in about 200,000 euros in 2002. But your business, your, your revenue was like eight to 10 million around that point, time. So why do you think you needed that money? It doesn't sound like, it sounds like you had enough, I mean, if you're, I mean, I guess your margins were pretty thin.

• 35:27Speaker 02

  Margins were thin and it, you needed, you know, I needed the two, 300,000. I don't know the exact number here anymore, right? But it was some in that ballpark. Plus it was a credit line, right? My, my business was growing at the time, but I still had to pre-finance all the fabrics, all the.

• 35:45Guy Raz?

  You had to pay for it in advance?

• 35:47Speaker 02

  Yeah, I mean, I was.

• 35:48Guy Raz?

  You didn't have like 30, you couldn't like order it and then pay 30 or 60 days later?

• 35:52Speaker 02

  30 or 60 days, no, that was, they were not giving me that credit yet. And, you know, the, the thing is you buy your fabrics, then you have to send them to your factories. They have to produce it, then they have to send it to your stores. I mean, that whole process has your cash tied up before you, way longer than if you were just a, you know, a business that just buys wholesale.

• 36:14Guy Raz?

  Yeah. All right. So what, now that you had this cash, this line of credit and this cash, what was the plan? I mean, was it to just start to build like another 10 stores in the Netherlands?

• 36:28Speaker 02

  Yeah, I mean, that, that's the moment when, you know, the obvious thing was to expand and, and open more stores. And I didn't have still a lot of cash. So I, I really went from, you know, this, this, this crazy location into other cities, but still doing the same thing almost and finding spots that were, you know, interesting, that I could create some kind of an experience in, and it was easy for customers to go to, but still keeping our occupancy costs low.

• 37:00Guy Raz?

  So you were not going to the high street, the main street in the towns where it was more expensive to, the leases more expensive. You were going like on the outskirts of town.

• 37:08Speaker 02

  Outskirts or whatever, inside the town, but then not on main on main.

• 37:12Guy Raz?

  Yeah.

• 37:13Speaker 02

  My customers were coming for, you know, the quality of the product, the fact it was attainable price point, and they were getting a great service. So why would I now then go by the standard playbook of how everybody was building a fashion brand, even though, you know, the guys that put some money in was saying, no, no, no, you have to go there and there, and this is how you build a brand. I was like, no, not really, because, you know, I can build a brand based on quality of product, based on quality of service, and just figure out to be more efficient so I can actually maintain that proposition.

• 37:45Guy Raz?

  And how did people, I mean, obviously, you did not have a huge advertising or marketing budget as you opened the stores, like, what would make them go in there? Were they, was it mainly word of mouth? Like, you have some guy wearing a suit, and somebody would say, hey, where'd you get that suit? It's really nice. He's like, guess what? It was like 200 euros. I got it from this store called Suit Supply. Is that how people would find out?

• 38:08Speaker 02

  It's, it's more or less, yeah. They talk about it, it becomes part of the conversation. That is the most important advertising you can get. If you don't have that, forget about it. You're, you're never going to be able to buy against that.

• 38:22Guy Raz?

  So you were really, I mean, you had to be super efficient to squeeze profit because you were getting the fabric, it was being made in that factory, and was, at that time, was made in the same factory that you had originally bought the suits from, still?

• 38:36Speaker 02

  No, I think we've expanded our fabric, factory base by then.

• 38:39Guy Raz?

  By then, okay, I got it. So you were, but, but, and you had these suits coming in from Italy, and, and I'm, I'm trying to figure out, like, because you were getting attention in Holland, you were getting press attention, you were, there was buzz around this business, and I think, I think by like 2003, you had, I think, at least three stores in the country, right?

• 38:59Speaker 02

  Probably a little more, yeah, about eight, nine stores.

• 39:02Guy Raz?

  Eight or nine stores, OK.

• 39:03Speaker 02

  Something like that.

• 39:04Guy Raz?

  And so, I know we mentioned this a little bit, but I'm curious about the competition, particularly in the Netherlands, because, you know, I think a lot of people outside of, you know, probably don't realize this, but in every European country, there are multiple brands that really just kind of remain inside the country, right, or maybe just in like the region, or maybe only in Europe. And, you know, it would be like if in the US, every state had like 20 different fashion brands that were only in North Carolina, or, you know, only in Alabama. And there are, there's a little bit of that, but not really that much of it, right? So, at the time, were the competitors in the Netherlands,

• 39:45Guy Raz?

  were they disparaging what you were doing? I mean, were they, because I think you were even sued by a competitor, I don't know if I'm pronouncing it right, but it's O G E R, Ogre is how I pronounce it, and they sued you because they didn't like one of the advertisements. You had mentioned like, you know, their name and one of your brand advertisements, and it basically said, hey, if you're looking for our shop, just go to Ogre and turn left and then turn right and you'll find our shop.

• 40:09Speaker 02

  The phrase was like that. He was constantly trashing our, you know, we were trashing our business a little bit and et cetera.

• 40:13Guy Raz?

  Ogre was?

• 40:15Speaker 02

  Yeah.

• 40:15Guy Raz?

  Is it pronounced Ogre?

• 40:17Speaker 02

  O G, yeah.

• 40:17Guy Raz?

  O G, OK, forgive me.

• 40:19Speaker 02

  But they were like, I don't know, what's the equivalent, the most premium luxury store in Holland. And at that time, we opened a second store, and we opened a store in Amsterdam, in the city. But it was sort of, you know, in that area, but not on the main, on Main Street, around the corner a little bit, et cetera. And then we had an ad that says, for a beautiful suit, you go to O G, and then you take a left and a right, right? Basically, just a route to go to our store.

• 40:46Guy Raz?

  Yeah.

• 40:47Speaker 02

  And it was sort of a little bit of a pun, and we're joking, et cetera. And it was a little tongue in cheek. And he went for it. He started suing us on that ad.

• 40:57Guy Raz?

  He is O G?

• 40:58Speaker 02

  Yeah. And I still have to thank him for it, because, you know, it was, it gave us a lot of momentum and a lot of publicity, right? So that store, you know, took a huge, huge jump.

• 41:10Guy Raz?

  So you've got, you know, 2004 or '05, you're really in, still in the Netherlands, in Holland. When did you decide to move outside of Holland and open a store in the next country?

• 41:22Speaker 02

  I think, you know, that was one of the things I think I waited for a little too long. I think 2008, '09, I started with the first store in Belgium and then in London.

• 41:35Guy Raz?

  Yeah.

• 41:35Speaker 02

  And London was an interesting example because...

• 41:40Guy Raz?

  Very expensive to do business there.

• 41:42Speaker 02

  Extremely expensive. And it's the lions then from Suting, right?

• 41:47Guy Raz?

  Savile Row, right. I mean, you're basically going to London and saying, hey, we can undercut their prices and offer the same quality.

• 41:54Speaker 02

  Yeah. So I wanted to open a store on Savile Row. And funny thing with Savile Row was actually that that store was designed, designated by the Crown of London that could only have traditional English tailors there.

• 42:09Guy Raz?

  On Savile Row.

• 42:10Speaker 02

  On Savile Row. So we were trying to get locations, but we were getting, yeah, but you guys are not traditional English. So we went, took a side street and opened a store there. And then, you know, my PR, I was brainstorming about PR and such, you know, we're gonna bolt your, we're gonna bolt you on the location, on a bed, and you're gonna sleep in there. And then we have all these alarm clocks, and then we bring in the press, and that we're gonna wake up Savile Row, right? We're gonna be this whole new kid on the block.

• 42:37Guy Raz?

  Wait, sorry. You literally brought a bed in there with a bunch of alarm clocks around you to attract...

• 42:43Speaker 02

  We bolted the bed on the outside of the building, like 10 meters high. You know, it was also like, you know, really scary.

• 42:50Guy Raz?

  A bed on the outside of the building, 10 meters above the ground, and you had alarm clocks around it, and you slept in that bed, and this was to attract media attention?

• 43:00Speaker 02

  Yeah, that was sort of the PR stunt, right?

• 43:02Guy Raz?

  This was gonna be your PR stunt. I got you, okay.

• 43:04Speaker 02

  We have, we have like a hundred, a thousand alarm clocks hung up on there, and they were all gonna ring at the same time. And we bring the press.

• 43:10Guy Raz?

  And you were gonna be in the bed?

• 43:12Speaker 02

  Yeah. I mean, I was spending a few hours in the morning in that bed. The press came, all the alarm clocks went off.

• 43:18Guy Raz?

  And the idea was, let's just do this stunt and we'll attract attention at least?

• 43:22Speaker 02

  Yeah. You know, we got this Amsterdam stunt where Mr. Orgé sort of bite. So let's, let's see if we can, you know, stir up some trouble.

• 43:30Guy Raz?

  All right.

• 43:30Speaker 02

  And nothing happened.

• 43:34Guy Raz?

  You didn't have any customers?

• 43:36Speaker 02

  They didn't have any customers. I mean, it was horrific. Nobody fell for it.

• 43:42Guy Raz?

  So wait, wait. So you were in this bed and like no one, like you're just looking down at the ground and there's like four people milling about?

• 43:48Speaker 02

  There's four people, like pathetic. I think it was not, it was not going to hit the main news. So then I started hiring actors to be in the store to sort of browse around and sort of, we had some dynamic happening because it was really-

• 44:04Guy Raz?

  You just hired people like to come and pretend?

• 44:07Speaker 02

  Yeah.

• 44:08Guy Raz?

  Just to show that your store was busy?

• 44:10Speaker 02

  To show it was busy. It was something happening. It was very, very slowly picking up, picking up piece by piece by piece. I think it was a hard market to crack.

• 44:20Guy Raz?

  How long did it take?

• 44:21Speaker 02

  I think it took about two years. I think this was, you know, 2009, 10, it started to happen. People realized that, you know, this was a really good product or an interesting price. And what we also did, I think back then, we put our tailor in the front of the store, right? And so it was actually, you know, there were people working and sewing and doing stuff.

• 44:46Guy Raz?

  As tailor was sewing right in the front of the store?

• 44:48Speaker 02

  Yeah. And so people passed by and said, okay, you know, what's going on here? It was a little theater. You know, the store got busier and busier and busier. And it was doing a few million, then, you know, five, six, seven, eight. It was a gradual process. So we slowly built a reputation.

• 45:05Guy Raz?

  I mean, there was, was a key difference, which was on Savile Row, you go in, they would fit you, the tailor would, you know, depending on the store, the tailor would then, or the tailors would start manufacturing your suit on site in that store. You guys in 2006, about two years before, moved your manufacturing to China from Italy, where you were still sourcing your fabrics from, but no longer making the suits in Italy. Tell me why you moved the manufacturing to China in 2006?

• 45:37Speaker 02

  What happened is, you know, at the time in Europe is that manufacturing got, you know, more and more and more scarce. People with the skill set were getting older, leaving factories. Young people didn't want to work in these factories anymore. And the skill set of making something really nice was slowly disappearing. The amount of people that were able to do it were getting smaller and smaller. And the amount of product that we were needing was getting bigger and bigger. So, you know, we had to find a solution. And I was reading the annual report of Zenia at the time.

• 46:13Guy Raz?

  Which is obviously one of the big premier luxury brands.

• 46:16Speaker 02

  Yeah.

• 46:16Guy Raz?

  Suit brands, yeah.

• 46:17Speaker 02

  Suit brands, and they were, you know, expanding into China. And they bought a joint venture into a Chinese garment manufacturer, suit manufacturer, in a town called Wenzhou. And I was like, oh, that's interesting. If they were also doing that, then there must be a certain level of, you know, high-end quality there. So I'm calling this factory, you know, I got the number, and nobody picks up the phone or nobody speaks English.

• 46:43Guy Raz?

  Yeah.

• 46:43Speaker 02

  In that factory, of course. And so I'm thinking, okay, it's Christmas at that moment, and I'm like, okay, I have nothing to do because everything's closed here in Europe anyway. You know what? I'll just take the plane and go to China and go to knock on the door of this factory, right? How much time is it gonna cost me? A few days? And this is the time in China where, you know, it's not like now, everything is fancy and nice airports. You land in Shanghai, you take a taxi for six hours, you come into this village where there's hardly any street lighting. And there's one international hotel in the town. I still remember, the Victoria Hotel.

• 47:25Speaker 02

  And I check in there, and in the morning, I'm sitting at the breakfast, there's only one European person there, and it's an Italian guy. And I'm thinking, okay, this Italian guy is probably, you know, part of the Zenia group, otherwise why would there be any Italian here? And so I introduce myself, and this was Tosco. And Tosco's complaining about, yeah, I'm just being put here with Zenia because we bought this factory and now I have to, you know, produce. Because also, part of our agreement in this joint venture is that we supply a certain amount of production capacity.

• 48:04Speaker 02

  And I went into that factory with him and he gave me a tour. I was amazed. This was, you know, something I'm like, I've never seen so much quality and so much detail before. It was probably one of the best factories I've ever seen, better than ever, anything I've seen in Italy. These were two brothers that founded this, you know, from a very young age. And they had just one thing in mind, you know, they were completely fanatic about it. They wanted to make the best suit in the world. And you looked at all the Italians, looked at all the brands and they were, you know, their pattern making, their quality, their level was fantastic. And Zenia figured that out, that's why they bought a joint venture in that.

• 48:48Guy Raz?

  Wow.

• 48:49Speaker 02

  So I thought I struck oil, right? I came back from that trip, I'm like, guys, we found the best factory in the world. Now our product can be so much better. And by the way, we can probably also make a little bit more margin on it. That was not the main driver, but you know, still, it was gonna be more efficient. And, and we have, you know, enough production capacity there, you know, the guys wanna work with us because we're actually solving a problem for them because they needed some extra, you know, food for the line.

• 49:19Guy Raz?

  Yeah.

• 49:20Speaker 02

  For the production line.

• 49:21Guy Raz?

  Because Zenia, it wasn't enough to just make Zenia suits, they had to make all kinds of suits.

• 49:25Speaker 02

  They made all kinds of suits and Zenia was, you know, the stars seemed to align perfectly. So I thought, you know, guys, we're gonna move to China, everything for the next season to China. Boom. But then, of course, we, you know, we didn't figure out all the logistic parts and the fabric got stuck at customs for a month. Then, you know, this, this factory, we weren't used in working for international clients yet. So they made it in the wrong model because there was stuff going wrong in translation. Then, you know, they, they had to send it out and it was stuck in customs again. There was so much stuff that needed to, you know, iron out from a logistic perspective.

• 50:06Speaker 02

  So everything was, you know, the quality was great and the craftsmanship was great, but everything else around it, it was a nightmare. I almost tanked the business with it.

• 50:16Guy Raz?

  You almost tanked the business by moving it to China?

• 50:18Speaker 02

  In the beginning, yeah, because if we would have been out of product for two months, you know, where are we going to get revenue?

• 50:24Guy Raz?

  So what'd you do? How did you resolve that?

• 50:26Speaker 02

  I had to run the business here and then I flew back almost every weekend.

• 50:30Guy Raz?

  To China?

• 50:31Speaker 02

  To China and be in the factory, just, you know, pushing and.

• 50:36Guy Raz?

  You're going to China multiple times a month?

• 50:38Speaker 02

  Oh, yeah, yeah. I went on the plane five, six hours and then started to push and get things done and be there. And then I got somebody internally that, you know, was just out of university and working for us in the store. And, you know, I said, guys, just come with me. Why didn't you stay here and just, you know, the only thing you have to do is make sure that these fabrics that are here are actually going into production, you know, and they were, and call me if there's anything going wrong.

• 51:08Guy Raz?

  Yeah.

• 51:08Speaker 02

  And, you know, this guy stayed there and stayed there and slowly he actually helped us build up our whole production office in China. He learned Chinese in half a year.

• 51:19Guy Raz?

  This was a Dutch guy?

• 51:20Speaker 02

  It was a Dutch guy, nineteen years old, but he was a handy, smart guy, you know, great pusher. And I just needed to have, I didn't need also somebody that was crazy enough to stay there, right? That didn't have a, you know, a family or, you know, was tied into, into Europe. So I just needed a smart guy to sort of oversee.

• 51:42Guy Raz?

  Yeah. All right. So you've got now, you work out the kinks. It's going to take you about two or two years and you've got your person on site there in China, making sure that they're making it to your specifications. But the quality is good. You're happy with the end product. I mean, these, it sounds like these Chinese tailors are like artisans, like this kind of artisans that might have been in Europe thirty, forty years ago.

• 52:08Speaker 02

  Yeah, they were phenomenal. I mean, and they still are. I mean, their pride of being part of that business and making this product and, you know, if. If the head pattern designer wanted to explain something to the team or the whole factory floor, it was silent. They were all sitting around him and listening in all.

• 52:28Guy Raz?

  Yeah.

• 52:29Speaker 02

  I find it extremely impressive to see. I mean, everybody that discounts Chinese production, you know, it's, it's, I don't think, know what they're talking about in a lot of cases.

• 52:39Guy Raz?

  You had, so you had Italian fabrics being shipped to China, that's still your model today, and then basically they were cut, the fabric was cut and the material and the pieces, those cut pieces were sewn into suits in China.

• 52:53Speaker 02

  Yes.

• 52:54Guy Raz?

  So now you've got this operation going. Now, let's go back to London. In London, you've got the store off Savile Row, but there probably still was in 2008, 2009, a kind of a snobbiness or snootiness about something made in China, a suit made in China, that, that some people wouldn't find that to be quality, a quality suit. You want it made in Italy, or, you know, made in London, even though the manufacturing base in those countries are very low, very small today. How did you convince people that your suits were, you know, a high-quality product? Because the price point was lower, so already there, you know, the sort of the psychology around that is like, well, if it's so cheap, it must not be good.

• 53:36Speaker 02

  It started as, in London, unlike other stores we opened, it was more of a drip, drip effect, right? There were a few people that came in that were surprised about the actual product and the actual quality that we're bringing for the price point. And I call it the Heineken effect. And we have a beer brand here in Holland.

• 53:56Guy Raz?

  Yeah, sure.

• 53:57Speaker 02

  It's called Heineken. And, you know, for us here, that is sort of, you know, it's a great beer.

• 54:01Guy Raz?

  Yeah.

• 54:01Speaker 02

  But it's just beer, right?

• 54:02Guy Raz?

  Yeah.

• 54:03Speaker 02

  Whereas in, you know, any club in the world.

• 54:06Guy Raz?

  Other countries, it's a premium beer.

• 54:07Speaker 02

  It's a very premium beer.

• 54:09Guy Raz?

  Yeah, yeah. That's a good analogy.

• 54:11Speaker 02

  So the first customers that you're getting are customers that are a little curious, right? They might not be.

• 54:19Speaker 02

  The conformity-driven people that are snobby and that they're just shopping on Savile Row, I'm not going to get a customer maybe that, you know, wants to have this, at that moment, this big brand name and say, okay, about the, I don't know, the $5,000 Zenya suit or whatever. But you get the customers in the beginning, like, hey, you know, this is interesting. These guys are doing something new. That helped us in London a lot because on one hand, you had these stores that had all these craftsmanship and such and such. But you also had a lot of customers that actually knew good product, right?

• 54:56Guy Raz?

  Yeah.

• 54:57Speaker 02

  The same as in Italy, the same. You know, you could, people that feel, say, hey, this feels like good fabric and they fit it on and say, hey, this actually really feels good. So they, I think at the end of the day in London, the customer gave us the credibility.

• 55:10Guy Raz?

  I think by 2010, you had 32 stores and I think that was in three countries. So between Belgium, Holland, London, maybe you had one or two other countries, still mainly Western, all in Western Europe. So you decide, and it makes sense because if you really want to scale your brand, if you want to be a global brand, you've got to be in the United States. And so you knew probably already by 2009, 10, that you were going to eventually get to the US, that that was part of your plan, I'm assuming.

• 55:45Speaker 02

  Yeah, it was the biggest market, you know, it's, everybody wants to be in the US because it's such a buying power. Of course, it's also an aspirational thing, right? You want to make it, you want to make it there and not just be a European brand. But it was also, you know, everybody was saying it's the hardest market to go into, the US consumer market is so competitive. There's a lot of red tape down there. You know, I think the amount of warnings that I got for going into the US was almost endless. But I was going there every now and then and looking around and, you know, I thought what we're doing is not really here. And I think at that moment also, I felt that

• 56:29Speaker 02

  the market in the US was ripe for it. Just getting it done was seemed so hard, right?

• 56:36Guy Raz?

  Yeah.

• 56:37Speaker 02

  And so expensive. I mean, New York was, you know, London was expensive, but going into New York was a completely different ballgame.

• 56:44Guy Raz?

  And presumably, New York was going to be your first location for obvious reasons. It's the capital of, the fashion capital of the United States and also, you could argue it's a suit capital of the US because there's so many people in finance and law in New York, men, who wear suits to work.

• 57:00Speaker 02

  Yeah, and New York was the obvious location.

• 57:04Guy Raz?

  But also the most expensive.

• 57:06Speaker 02

  Most expensive, most competitive. I guess, well, you know, I'm just trying to get my feet wet here. I didn't even know if we were actually going to be successful in the US, right? I just wanted to get started, right? Sort of get a little bit of experience, you know, see how many of all these warnings that people were giving me were actually true. And I remember at some point, we were, I was walking through SoHo and, you know, finding locations. And at some point, I was looking up because I forgot about, you know, being on the ground floor, too expensive. You know, it was cost us millions in rent a year. I was never going to be able to pay that.

• 57:41Guy Raz?

  Millions in rent a year for one store?

• 57:43Speaker 02

  For one store. That was sort of the ballpark, 1.52 million a year.

• 57:47Guy Raz?

  For a lease? And you would have to sign it probably a five, 10 year lease?

• 57:51Speaker 02

  Yeah, five years. And put guarantees behind it and all that kind of stuff. So we're doing okay. But it was not like, we were not able to do that. And so at some point, I see this little handwritten piece of paper in a window on a second floor, says for a lease. And, you know, go up there, there's this sort of furniture store on the second floor. And it's a little, it's a little messy. And I called this number. And, you know, the guy, landlord of that building,

• 58:25Speaker 02

  You know, yeah, no problem. $250,000. And this landlord was very happy to give me a year lease with a six-month break. And if I couldn't make it after six months, I could happily walk away. $250,000. So, OK. And, you know, it was not a shitty space. It was actually a nice spot, beautiful, high ceilings, you know, something that could, on the corner of Mercier and Brooms. It was actually a typical Soho loft space of 4,000 square feet. And later, I found out why this was a handwritten piece of paper and why this guy gave me this deal. Because he apparently was the landlord from hell. And there was no legit broker that actually wanted to work with this guy anymore

• 59:10Speaker 02

  in the whole state of New York.

• 59:14Guy Raz?

  When we come back in just a moment, that landlord tries to stop suit supply from opening in New York. And Fokke learns how an infusion of cash actually slows his company's momentum. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

• 59:46Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2011, and Fokke has decided to open a suit supply store in Soho in New York. He's drawing up plans and getting ready to build out the store.

• 1:00:00Speaker 02

  And then what happens was our, actually, one of these moments that, you know, you do a lot of hard work, and sometimes you get lucky. There was a piece in the Wall Street Journal that did a blind test on suiting. And we got out of that contest with a headline that a $600 suit supply suit was better or just as good as a $3,600 Armani.

• 1:00:23Speaker 02

  That was the review they wrote after they ordered some stuff online. We were not even open yet.

• 1:00:28Guy Raz?

  In New York, okay.

• 1:00:30Speaker 02

  We were just shipping already stuff online to the US.

• 1:00:32Guy Raz?

  And they just did a comparison and that, that's pretty great. I mean, what a lucky and fortuitous piece of media to get.

• 1:00:40Speaker 02

  It was phenomenal, right? And at that moment, you know, our website blew up. And I'm like, okay, we gotta capture this momentum. We can't wait until we have all the permits done. And because it's gonna take two months to get a permit even. And, you know, the design's on for all this store. We gotta open this store now if we wanna keep this going. So we did a quick design, had furniture made and shipped in a plane. All the lighting has to be done and walls had to be placed in. You know, something had to be done to that store because it was a mess. So we found probably, I don't know, some kind of contractor that was probably the equivalent of The Sopranos. That was, wanted to do it without permit. So I opened this store.

• 1:01:26Speaker 02

  It's almost done. I mean, this is a dream. We're doing an opening. We have all kinds of press coming. You know, I think six, 700 people on the guest list. Some really important people for the industry that we were able to get on the back of the Wall Street Journal article. This was the moment, right? And so two days before opening, I get a call from this landlord and say, "Hearin' you heard you're gonna open tomorrow." I said, "Yeah, yeah, yeah, we're all done. I mean, you know, big opening." "Yeah, you're still, I don't have your permit closed out, so that's not gonna happen." And I'm like, shit, of course. I thought I had everything done. And this guy. Well, I said, "Don't worry about it.

• 1:02:11Speaker 02

  You know, all the permits are getting done. You know, our architect is working on it. It's a, according to him, self-certified job, you know, some phrasing I heard along the line. And it's gonna be done."

• 1:02:23Guy Raz?

  Yeah.

• 1:02:24Speaker 02

  And I said, well, if you can have a way, because it's not something you can do, figure it out with my lawyer. Here's his number. Called his lawyer. He says, well, I'm gonna go on holiday today, so it's not gonna happen. I'm like, okay, this is, we need to find a solution. So I called his landlord back. I say, okay, I'm gonna give you $150,000 as a deposit for me to open tomorrow and for you to allow me to do that. And if I close out the permits in two months, fine, you give me the money back. And otherwise, you know, it's yours. This guy was having the baddest reputation you could ever imagine. And he tells me, well, how are you gonna put that in contract? I said, I'm not gonna put it in contract. I'm gonna trust you.

• 1:03:10Speaker 02

  I don't think everybody, anybody would have, has had said that to him in a long, long time. So, you know, I said, he said, well, okay. I'm thinking I'm never gonna get this $150,000 back.

• 1:03:23Guy Raz?

  No.

• 1:03:23Speaker 02

  But, okay, at least I'm gonna have my opening and I'm gonna keep my momentum, which is way more important right now.

• 1:03:30Speaker 02

  At the end of the day, we had our opening. We had a lot of people come in. It was fantastic. And the guy actually gave me my money back after three months.

• 1:03:38Guy Raz?

  He returned the money when you got the permits.

• 1:03:40Speaker 02

  He returned it. But it was essential for us to do it. I mean, if you talk about momentum and that store was, you know, packed from the first moment and we had the first floor and then it was too small and we got the second floor and the third floor and the fourth floor. And I think now it's, it's six floors.

• 1:03:58Guy Raz?

  When you, I mean, one of the things that you were doing from the beginning was having tailors in the stores. And this is like, this is not, you know, it's not like a retail shop where you just have like college students who are trained for, you know, a couple of days and then they're selling on the floor. This is like a highly skilled job. So what were you doing to make sure that you had, like, were you putting your tailors through a training program, you know, before they even sat in the shop? And presumably, they were already qualified tailors, I imagine.

• 1:04:31Speaker 02

  Yeah, there's, you know, finding quality staff and training them is, is the hardest part there is. And, you know, in the beginning, we were bringing people from Europe and training them and the tailors, but also especially the, you know, our style experts on the store floor. These are two different job in our business, right? Somebody is selling it and pinning it and doing the measurements. And somebody is doing the actual work of doing the alterations and doing the sewing. If it's a ready to wear suit that needs to be altered. Now, both jobs need a lot of training. Of course, you have in a city like New York, you have tailors. So we were able to find them and train them into how we want to do the work.

• 1:05:11Speaker 02

  We have a relentless high end training program where we bring everybody to our one week onboarding program. When you finish that, you're brought into a store and you're paired with what we call a style expert. And you're getting for two months more and more and more in knowing all the details about style and about measurements and everything about the business. We don't spend the money on advertising. We spend the money on training our people. And we also follow the progress very carefully. We believe our store teams, we always say, are our marketing teams.

• 1:05:44Guy Raz?

  I mean, I'm wondering, how do you retain those people? Like, for example, I'm in the Bay Area. So if I want to go to the San Francisco store, I can set up an appointment. I can go meet with a stylist or a tailor or whatever. And there's an onsite tailor. And we're now, especially in the US and probably in Europe, retail shops are having a hard time not just finding people to work in those stores, but retaining people. So if you're investing all this money in training, how do you keep people? I mean, they could get trained and then take off after a few months or a year. And then you've sunk all that money in training.

• 1:06:22Speaker 02

  Yeah. I think the most important thing is first your selection of people. You know, you gotta like your job. If you ask somebody at Apple, why do you work at Apple? Right? They're not going to say, well, how great their benefit packages and what their remuneration. They say, you know, I like to work here because I like the technology. I like the product. I want to be a programmer at some point or a product designer. Or they resonate with the product. It's the same in our business. If you want to work with us, if you like to dress and style people and make them go out of the door to look good, that's where you get your energy from.

• 1:07:01Speaker 02

  And then it's about having a path for people, a career path for them. So we have what we call the sun and the moon path in our business, where the sun and the moon are both very important and it makes sure that we have life on earth. We would freeze to death at night, or we wouldn't have the tides. There would not be a life on earth. So we're very clear about always, you know, you want a moon career, you want a sun career. The moon path is, the mantra of the moon path is, so we can only have eyes for our customers. And these are all jobs that make sure that, you know, everything works, that stuff is organized and stuff is managed and the roster is there and the product is in the store.

• 1:07:46Speaker 02

  And so that the other part of the business can focus on only one thing, is styling customers and getting people into the door and creating attraction. And there, we have very specific career paths that are, I think, new or different than other retailers. You can become a style expert in training other people, but you can also become what we call a key opinion leader, where we train you in how to represent the brand on social media or outside of the store, where you basically become sort of a, I would say, a mini influencer,

• 1:08:24Speaker 02

  but with a very big difference, that you're able to book an appointment with you on the spot on your Instagram.

• 1:08:32Guy Raz?

  So your style advisors have their own Instagram pages and have built their own followings?

• 1:08:37Speaker 02

  They've built their own following, they've built their own Instagram pages. We work with them to create content, we train them on how to do this. So we build these career paths that are very, one is more operational and one is more creative in creating attraction with customers and creating, you know, looks and style. And that leads into, the one path leads, you know, you could say at the end in a COO, and the other path leads into a brand director position, as, you know, in the top of the pyramid, almost. So.

• 1:09:12Speaker 02

  To your point, what does retention mean? Retention means that you have to figure out how you can create growth for these people. So they also have a feeling that it's worthwhile for them to stay with your business.

• 1:09:24Guy Raz?

  Fokke, we had a couple of weeks ago on the show, we had Michael Kors, the fashion designer, who turned his talent into one of the biggest fashion brands in the world. It's certainly one of the top 50 and eight, nine billion dollar business. And he very consciously set out to do that, to become like a Tommy Hilfiger or a Calvin Klein brand. And one of the ways he did that was by making sure his products were available everywhere. Your products are only available in suit supply stores, but I have to imagine that in the past, and probably even now, there have been people who've come to you and said, hey, open a suit supply, you know, little shoplet inside of, you know, a Gallery Lafayette,

• 1:10:06Guy Raz?

  or open a suit supply inside of Liberty, or open one inside of Bloomingdale's, and also sell suit supply stuff to department stores. And you'll be much bigger if you do that. You'll be a much bigger brand. What's been your reason for not doing that?

• 1:10:22Speaker 02

  Well, you could do that, and you probably get some money. And it's very different for different products, right? I think Michael Kors is very successful in the accessory business and handbags.

• 1:10:35Guy Raz?

  Yes, sure.

• 1:10:36Speaker 02

  And if you look at that business, the thing from a service perspective that you have to do is make sure you have a nice product and you have somebody in the store that gets you the right handbag from the back of houses and sells it to you. The problem with our product is, and the problem with our business is, it is, and I would say the Goldman Sachs of retail. It's so execution intensive to do it right. You go to our store because you have a dinner, a date, an important event, a meeting, a celebration, or whatever, something that is important for you. So this person that is gonna help you, you gotta have trust with. You gotta, this person has to develop some kind of relationship with you.

• 1:11:20Speaker 02

  Then they have to do all the pinning right, the measurements right. Then we have to alter it, or even if it's a custom made suit, make it for you. And it has to come back on time and then we have to fit it again. So this is a very high-touch service model that is almost intangible connected to the product itself. You know, if I try to separate the two of them, it's gonna give me a little short-term success. But in the long term, I don't believe that I can separate the two from them and be a very successful brand over a longer period of time.

• 1:11:55Guy Raz?

  But it's always gonna limit your scalability, right? If you are only in suits of, I'm not saying this is a criticism. I think that's, I actually like that because you can control quality. But it is gonna limit how big you can be.

• 1:12:08Speaker 02

  I don't know if it actually limits scalability. What it, what it does do, it underpins sustainability, right? I think with doing that, we can protect the brand. We can protect what actually drives us and what drives us as a brand. So, you know, they always say, you know, I go to my stores every six months. I'm not saying all the stores, but probably 80% of them. And of course, we celebrate everybody's success. But everybody has to name two things that we can do better. Now, they always tell me, you cannot do that when you have 500 stores.

• 1:12:50Speaker 02

  I said, okay, well, you know, I'll figure that out when I have 500 stores. But I'm pretty sure that the only way to get there in our model is to make sure that we keep control of execution and excellence. Because otherwise, I have to change my model, I think. I have to start, if I just put a product in a department store, why would somebody buy our product and not something else? You know, the only way of doing that is then start spending huge amount of money on advertising.

• 1:13:21Guy Raz?

  You bought out those guys who originally were original investors who had, I think, a third of the company. You bought them out in 2015. So now, back to being essentially the majority shareholder at that point? Or were you the 100%? Did you own 100% of the company at that point?

• 1:13:40Speaker 02

  Yeah.

• 1:13:41Guy Raz?

  Wow, okay. Around that year, your revenue, your World Ride revenue was about $200 million, and you were growing. What I'm wondering about is, you're in a business that is, it's a high-end product. Your margins are very, very thin because you're trying to offer a competitively priced product. So how were you able to squeeze out more efficiency to make more money from this? What were your options?

• 1:14:10Speaker 02

  I think at the time, if I look at the business itself, we're in actually too many countries. We opened our business in the US, but also we were in Germany, we were in Italy. We were in, our business is inherently inefficient because we're in so many different places.

• 1:14:28Guy Raz?

  But don't you have to expand? I mean, isn't your only option at that point to expand, expand, expand? Because your margins were so thin?

• 1:14:36Speaker 02

  No. I mean, yeah, you have to expand, but you also have to be careful of how to expand and what you do. We were able, rates were extremely low, capital markets were flooded with cash. You could borrow a lot of money.

• 1:14:53Guy Raz?

  It was cheap.

• 1:14:53Speaker 02

  Cheap to borrow money.

• 1:14:54Guy Raz?

  So you were able to expand by, obviously with these low rates? But you're saying the expansion was not, because I would think, I mean, I think by 2020, but before the pandemic, you had 135 stores. Today, it's 150. But you're saying that was not a good, not a good strategy?

• 1:15:11Speaker 02

  No, it's a good strategy. No, definitely a good strategy. But what I said is, okay, when those rates were so low and money was abundant, you could, suddenly, from a constantly cash-strapped business, we raised a lot of debt and suddenly we had a lot of cash.

• 1:15:28Guy Raz?

  Yeah.

• 1:15:29Speaker 02

  I've never had, like, let's say, just 50 million just sitting on the bank account. And as an entrepreneur, you have endless IDs. Right? You always think, you know, I can do this and I can do that and then I can do that. And naturally, that's always circumvented by, you know, not having enough money to do them all.

• 1:15:48Guy Raz?

  Yeah.

• 1:15:49Speaker 02

  Right? So this changed. So then I opened, you know, for, okay, let's go full throttle. We opened, you know, we did a year where we opened, I think, 10 or 12 stores in the US when we only had 10 or 12. Then, you know, at the same point, we started, you know, figuring out and opening a women's line and it was for women's stores and we did too much. And instead of gaining a lot of momentum and gaining scale, what happens is that your execution starts to suffer, your momentum starts to slow, and this big snowball that was rolling out of the mountain and accumulating a lot of that stops. And, you know, then, then you have to spend a few years of, you know, pushing it back in momentum again.

• 1:16:33Guy Raz?

  I guess for you, that, that sort of breaking point, both for a lot of businesses, would, would have been at the beginning of the pandemic, March of 2020, right? Where, because I, I mean, you have at that point, 135 stores, you've got the, the women's line, and all of a sudden, your business, I mean, still, you were doing a lot of business online. I think about a third of your business already at that point was online, or maybe more. But without the shops, I mean, that's your, that's your identity. That's the, the customer relationship, right? And you had to shut them, most of them down temporarily.

• 1:17:10Speaker 02

  And nobody, you can, great to be online, but if everybody's sitting at home, nobody needs our stuff.

• 1:17:15Guy Raz?

  No one's buying suits, yeah.

• 1:17:15Speaker 02

  Nobody is needing, you know, sure, it suits, whatever, you know, we, by then, we've expanded our collection into way more stuff than just suits, right? We were, you know, in the more elevated casual part of stuff, but it's all product that you need if you go out, if you're social, if you're having, if you're going on a nice date or a nice, you know, event.

• 1:17:36Speaker 02

  Those were not happening. So for us, it was, business was just cratering.

• 1:17:41Guy Raz?

  Your sales fell initially about 40% in that year. Tell me about what you were thinking, because here you've got a business. You started 20 years before that. It was just up, up, up and up and up and up every year. Growth, growth, growth, growth, up and up. And then bam, you've got this calamitous year. So the question is, you're in the middle of pandemic and you're thinking, holy crap. No one's going to be buying suits. That's the conventional wisdom, right? And, and so, you know, it would make sense to start thinking, well, maybe we should go into athleisure wear. And there are examples of brands that really broadly expanded. Did you ever entertain anything like that?

• 1:18:25Speaker 02

  No, what we thought about is, you know, what does the new suit look like?

• 1:18:29Guy Raz?

  Yeah.

• 1:18:29Speaker 02

  Is, you know, people still want to have looks, right? And it's just going to get a lot harder for them because before it was a blue suit and a white shirt. And now it's suddenly now trousers, chinos, slip-ons. White sneakers. White sneakers or slip-ons or whatever, five pair of different styles of shoes. And then you can pair them with a polo or a crew neck or a shirt or, and then it's a jacket. Or, you know, the amount of options to go into this elevated sort of replacement of that moment, of that dress moment is suddenly endless. So we invented Look Builder where you could easily, you know, build your own looks.

• 1:19:07Guy Raz?

  It's on the website. It's a feature of the website where you go.

• 1:19:09Speaker 02

  Yeah, it's a feature.

• 1:19:10Guy Raz?

  It's super cool, by the way. It's in a model and you could just put on different clothes on, on this model.

• 1:19:15Speaker 02

  And, you know, the output of that technology would help us to create, if you're shopping, a certain item online, we could also immediately show you five different ways of wearing that item and actually be able to shop that look. And then we came out of the pandemic and we were doing all that kind of stuff. And then on top of that, a lot of people suddenly wanted to dress up and wear suits for all kinds of reasons. So we were selling a ton of suits. And on top of that, our whole elevated casual and how we invented that was also extremely successful.

• 1:19:50Guy Raz?

  You know, I'm curious about the financial side, which is you own, you still own 100% of the company today, right?

• 1:19:56Speaker 02

  Yeah.

• 1:19:57Guy Raz?

  And so I'm sure that you get approached, or have been approached by investors, or private equity, or venture folks who are like, look, let's, we want to buy a chunk of this business. We will, you know, I mean, Michael Kors did this in 2004 or five, where, you know, some investors came in, bought a part of his business, but then helped him scale it, right, to a much bigger place. Your business, obviously, is big, 150 locations, but would you consider it? Would you say, you know what, I'll bring on partners with big wallets, take some money off the table for me, and then we can use that money to fuel the growth of suit supply even further? Is that something that you would maybe do?

• 1:20:37Speaker 02

  Well, I mean, you know, we get these calls all the time, of course. And it's always nice to talk to people and sort of to learn about how they look at your business, right? I mean, you know, that's, but, you know, from a personal side, I'm happy to say that I made my dole and I, you know, I don't have to take money off the table.

• 1:21:01Guy Raz?

  Yeah.

• 1:21:02Speaker 02

  And on the business side, I had these conversations many times, and, you know, I have to always say is that I ask myself, because it sounds great, right? But it's important to understand is why do you like your business? I like to be in control, have the freedom, and this, running this business takes so much energy. It's 16 hours a day, there's always something going on.

• 1:21:30Guy Raz?

  You're still working that way, even now, 23 years in, 16 hours a day?

• 1:21:33Speaker 02

  Oh, 100%, seven days a week. Which I'm fine with, you know, if I have, but it's taking a lot of energy, so.

• 1:21:42Guy Raz?

  And you're almost 50. I mean, not to say I'm, I'm too, as you're not an old guy, but that's, it's a long time to work that hard.

• 1:21:48Speaker 02

  Yeah, but I'm, you know, I like to put my energy in there. And if I, if I, if you lose control or you have to really think about what it would mean if you changed that, if you would still be able to put the same amount of energy in there. I'm not saying we're never gonna do it, or we're never gonna IPO the business, or maybe at some point I think it's good for the business, or it's a safer, you know, it's, I mean, I'm almost 50, you know, I'm gonna, how much, maybe I'm gonna do this in another 10 years. But it's also, you have to think about how we're gonna bring the business into maybe a different, I don't know, say, stratosphere, or whatever you call it. But I wanna, I wanna be able to at least feel that I can distribute the same amount of energy to it every day.

• 1:22:30Guy Raz?

  Okay, one of the things we haven't talked about, because there really isn't that much written about you, at least in English, and we've, you know, we do a lot of research on, on all our guests, and so I just don't know much about your personal life. Do you have a family? Do you have children? Did you get married? I mean, were you able to do that and all of this work over the last 23 years?

• 1:22:52Speaker 02

  I have two kids with my ex-wife. I was never married, but my ex-partner in that regard.

• 1:23:00Guy Raz?

  With all that, with all that travel and all that work, 16 hours a day, I mean, probably there were some personal sacrifices. I imagine you, you probably didn't get to spend as much time with your kids, maybe, as you would have liked.

• 1:23:13Speaker 02

  In the beginning, where they were really babies and small and, you know, no, I didn't spend a lot of time with them. On the other hand, I very consciously spend a lot of one-on-one time on them when they got older, and I could do stuff with them and have experiences with them. I took them on traveling a lot with me, you know, they're not a lot of kids that have been in so many countries, I think, before they were eight or nine.

• 1:23:39Guy Raz?

  They're, your kids are adults now?

• 1:23:41Speaker 02

  They're older right now. They're, my, my daughter is 19 and my son is 17.

• 1:23:46Guy Raz?

  Either of them wanna work for the business?

• 1:23:50Speaker 02

  And I think my son wants to be, and I think his only choice is also being an entrepreneur because he's so stubborn. So I don't, I don't know if he wants to work in this business. And my daughter is, you know, very into design and so could be, but if one of the two would want, that would be great. But I also have to say that I think the most fun of having a business is being able to build it yourself.

• 1:24:20Guy Raz?

  So you would encourage them to start their own thing?

• 1:24:22Speaker 02

  I would encourage them more to start their own thing than, you know, to start managing my headaches.

• 1:24:28Guy Raz?

  Yeah.

• 1:24:30Guy Raz?

  You know, we've talked for a long time and you've had a long time to reflect on, on your story and what you've, where you are today. And obviously it's a really successful brand that you built. But when you think about this story, and I'm sure you haven't recounted it in such detail often in your life, how much of where you are today, do you think is, is because of the hard work and the grind you put in? And how much do you think has to do with luck?

• 1:24:55Speaker 02

  I think most of it has to do because the hard work and doing so much stuff all the time, all over the place. And you always think as an entrepreneur, you know, 10 years, I think it someday it's going to be less and less, but you know, it, it never gets less because you also start doing, you know, more and more stuff again. And, and because, you know, the luck, somebody always said, is with the hard working because, you know, then, then you also increase the chances of, you know, getting lucky every now and then, right? If you sit on the couch and nothing happened, you're not going to get lucky. And also going against the grain, a lot of times are following, you know, not the usual

• 1:25:40Speaker 02

  standard playbooks and not so much from any heritage, we want to be different because, you know, you didn't have a choice. You had to be different or you had to be creative to get to an end goal.

• 1:25:52Guy Raz?

  Yeah.

• 1:25:52Speaker 02

  I think that's also the, the fun of it, right? At the end of the day.

• 1:25:59Guy Raz?

  That's Fokke DeYoung, founder and CEO of Suit Supply. By the way, you remember how Fokke would go into businesses and offer to improve the wardrobe of the workers? Well, Suit Supply still offers a corporate service and has helped outfit both male and female staff for brands like Four Seasons Hotels and Omega Watches.

• 1:26:23Guy Raz?

  Hey, thanks so much for listening to the show this week. Please make sure to follow the show wherever you listen on any podcast app. Usually, there's just a follow button right at the top, so you don't miss any new episodes, and it is entirely free. If you want to contact our team, our email address is [email protected]. This episode was produced by J.C. Howard with music composed by Ramtin Arablouei. It was edited by Casey Herman with research help from Sam Paulson. Our production staff also includes Neva Grant, Elaine Coats, Liz Metzger, John Isabella, Kerry Thompson, Alex Chung, Chris Messini, Carla Estevez, Sam Paulson, and Kira Wakim. I'm Guy Raz, and you've been listening to How I Built This.