BoF speaks to Karen Walker and Mikhail Gherman, the duo at the helm of New Zealand-based brand Karen Walker, to find out how they built a global business from the edge of the world through a series of licensing deals.
Karen Walker | Source: Courtesy
AUCKLAND, New Zealand — Launched in 1989 with two t-shirts and the paltry sum of NZ$100 (about $78), Karen Walker — often called the designer for “anti-It Girls” — has grown into a globally recognised fashion brand, worn by Natalie Portman, Lady Gaga and Alexa Chung, with over 950 points of sale across 35 countries.
Collaboration is at the heart of the business, helmed by designer Karen Walker and her husband and business partner Mikhail Gherman, who also works on the company’s non-traditional marketing campaigns. In addition to clothing, the brand has expanded into product categories including eyewear, jewellery, homeware, paints, handbags and footwear, launched through a series of licensing deals.
“We have a motto: Only work with people who get it,” says Gherman. “They’ve got to tick a whole lot of boxes,” Walker agrees. “They’ve got to have the experience and the infrastructure and the distribution and everything else. But you’ve also got to like them. Our business is built around collaborations, long-term license partnerships. We’re not interested in being a manufacturing company. We like to work with experts.”
For each line, Walker has sought out specialists in their respective fields, such as luxury accessory maker Benah, with whom Karen Walker launched a handbag line earlier this year. The designer’s longest partnership is a 15-year relationship with Resene, a New Zealand-based paint manufacturer. Other collaborators include shoe brand Beau Coops, Happy Socks, Uniqlo and Manebi.
But Walker’s licensing deals have not been reckless. “When we’ve gone into new categories, we’ve only gone into it if we felt that the way we would do it isn’t being done and only if we’ve got something to say,” she explains. “We’ve turned down loads of approaches because it hasn’t felt right. It hasn’t felt authentic to us. They just wanted our name.”
“This isn’t your normal ‘Slap your logo on the side and see you at the board meeting,’” adds Gherman. “The reason these partnerships have become really successful and why they have grown is because we have a vision and we think about what’s missing. We ask ourselves constantly, if this [product] didn’t exist in the market tomorrow, what would people miss about it?”
Eyewear is Karen Walker’s most important category. Launched in 2004, the company’s eyewear division, known for its funky sunglasses, is set to generate NZ$35 million (about $28 million) in 2014. (The privately-owned company declined to reveal turnover figures for the overall business, but reports 20 percent year-on-year sales growth over the past five years).
The initial proposition from Sunshades, an Australian eyewear manufacturer based in Sydney, was relatively small in scope. They wanted to target the New Zealand market, but Walker always had her sights set further afield. “They rang us and said they wanted to break into the New Zealand market,” she recalls. “We said we’d actually like to break into the global market!”
When Karen Walker entered the market, the colourful, chunky styles of eyewear, with their trademark arrow emblem on the temples, stood out from the competition. “There were boring frames with logos on the side, or with the name on the side, spelling it out, just in case you didn’t notice,” recalls Walker. “We wanted to react to that, as we thought it was such a cop-out. That no thought had gone into the design — it was all hinged on the brand name. Our strategy was ‘Let’s just make the design really good and not worry about the brand name.’”
“I think part of why the sunglasses were embraced is because of this anti-brand movement,” adds Gherman. “We’re living in a world where niche is becoming more prominent than ever before and I think we caught that ride.” With this ethos in mind, Gherman creates eye-catching lookbook images that the company distributes on social media, where Karen Walker has about 118,000 Instagram followers. “We didn’t have a lot of money, so we put all our budget into lookbooks. And, because we couldn’t afford models, we just used our friends, dressed them up and put wigs on them! Sometimes we used a broom, or a balloon. If we were going to challenge the market in this way, we thought we should challenge it all the way.”
Gherman’s non-traditional marketing initiatives have included a collaboration with blogger Ari Seth Cohen of Advanced Style, featuring grandmothers, as well as a campaign featuring the Kenyan artisans who produced eyewear pouches for the company as part of Karen Walker’s involvement in the United Nations’ Ethical Fashion Initiative.
Gherman also provides creative stimulus for the Karen Walker creative team, sourcing out-of-the-box inspiration, ranging from old photos of suffragettes for a ready-to-wear storyboard to images of African dictators wearing sunglasses for the development of eyewear marketing.
Karen Walker sells products across a wide pricing spectrum, from $10 for key chains to $50,000 for diamond rings. “It’s not labouring over one gown with a million meters of tulle,” she explains. “We’re about, ‘Yeah, let’s do dog collars!’ And next week we we’ll do something else. We love ideas. And the creative process and the excitement of seeing those creative ideas come to fruition every week. We love the creative process in terms of the business as well — how you build it, the strategy, the partnerships and how you grow and write the rules.”
Walker often breaks rules as well. Pieces from her runway shows — she has been showing in New York since 2006 — are available in store the very next day. “This helps to beat [the counterfeiters] to market,” she explains. “Customers don’t want to just have new stuff in August, which is going to get more and more boring and then it’s going to go on sale and then there’s more new stuff in February. That model is dead. That was dead 20 years ago. We love the idea of new stuff constantly.”
In 2009, Walker and Gherman opened The Department Store in Takapuna, a quiet wealthy suburb of Auckland. The 10,000 square metre store, which includes a Karen Walker concession, has become one of the area’s most directional retail outposts. Shortly after opening, the duo brought Topshop and Topman to New Zealand through a wholesale deal. This year, the pair partnered with local clothing seller Barkers and businessman Philip Carter to form a new company, Top Retail, which has secured the rights to own, develop and operate Topshop and Topman across the country. A 10,000-square-metre flagship store is set to open in Auckland’s downtown central business district in March.
“It’s another example of how we work in partnerships: they admire what we do, we admire what they do. What’s really exciting working with [Topshop] is seeing from this side how it works being a partner on a retail store, because that’s how our retail group will grow in partnership with other markets,” Walker says.
Other markets are very much on the horizon. Karen Walker plans to open stores in Japan next year as part of another licensing deal. However, of all of the company’s collaborations, it is the relationship between husband and wife — the couple met in 1987, and married in 1991 — that forms the real core of the brand.
“[Mikhail’s] unlike anyone I’ve ever met,” Walker says with a smile. “He’s so ahead of the zeitgeist, he’s not just up to date with it, he’s ahead of it. And when he gets that feeling, a ‘This is what its going to be about’ feeling, you kinda gotta listen. He’s usually right.”
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