How Nili Lotan Built a $100 Million Brand

Nili Lotan has no time for TikTok trends.

Sitting in her office loft above her brand’s studio in New York on a recent spring morning, the 64-year-old designer sighed when asked if she was curious about ‘cottagecore’ – the campaign’s floral aesthetic that has helped propel brands like LoveShackFancy and Hill Maison Accueil.

“I’ve been drawing for 42 years, I’ve seen it all a million times in my career, and I’m just not going there because I’m not interested,” Lotan said dryly, adjusting his shirt. tucked-in black button. in his jeans. A framed photo of Patti Smith wearing a “fuck the clock” shirt hangs on a whitewashed brick wall and a soft hum of workers sewing below bounces off the clay pottery and Noguchi books nearby.

“For me, it’s about serving a woman’s life, not a fantasy,” she continued. “And the woman I design for, she doesn’t care about these trends.”

Lotan’s distaste for the hunt for the styles of the day is also a crucial part of his success in the American contemporary market.

Over the past 19 years, the Israeli-born designer has grown her independent American fashion label by producing timeless, high-quality basics. His $400 high-rise jeans, $350 linen khakis, $295 button-up shirts and $950 unstructured blazers took off with shoppers in New York, Los Angeles, London and Tel Aviv. Her customers appreciate neutral palettes and relaxed silhouettes and are willing to pay top dollar for the brand’s fit and feel (a look that TikTok influencers might describe as “coastal grandma,” much to the dismay of Lotan). The brand will generate $100 million in revenue this year.

Although fashion brands like Vince or Rag & Bone, launched around the same time as Lotan, chose to grow with investments and IPOs, Lotan took a slow and steady approach, remaining small and independent. , without an investor. It sells to around 300 stores globally – wholesale accounts for 42% of business – and manufactures mostly locally in New York.

Lotan was content with company size but is now preparing to scale. Next month, the brand will launch menswear: bomber jackets, carpenter pants, corduroy blazers and fisherman sweaters for “my customers’ husbands and boyfriends,” Lotan said. The menswear will initially be sold at seven wholesalers, including Net-a-Porter, Ssense, Saks Fifth Avenue and Shopbop, as well as on the company’s e-commerce site and inside its stores (it has three locations in New York and has just opened a fourth in Palm Beach, Florida).

The brand is also opening three stores in Los Angeles this year, followed by the launch of handbags in the fall. With these category launches, Lotan predicts that its business could double.

Lotan knows this is a necessary time to grow, especially when the brand faces more competition, especially from West Coast low-cost brand Jenni Kayne.

It is also a good time to further establish itself in the American market for accessible luxury. With inflation at its highest level in 40 years and economic headwinds limiting spending by the middle class, the category is growing.

“With rising food and oil prices, the low-end consumer is affected, but the luxury consumer is unaffected,” said Jessica Ramirez, retail research analyst at the firm of investment research Jane Hali & Associates. “And if we see a recession, luxury will see trade down and accessible brands will benefit.”

Cracking the contemporary market

Born in Israel, to a real estate father who helped develop the Israeli seaside town of Netanya, Lotan grew up on French magazines she found in Israeli hair salons, and later developed an affinity for French minimalism. and 70s rock and roll after travels. in Paris. She attended Shenkar College of Engineering and Design, Tel Aviv’s popular fashion institute, then moved to the United States, where she spent nearly two decades working for brands like Ralph Lauren, Nautica and Liz Claiborne. .

In 2003, she launched her first collection, investing $25,000 of her own money. The clothes — military pants and utility jackets, inspired by the uniform of the Israeli Air Force, where she served for two years — took off at retailers like Barneys New York and Fred Segal.

“The most massive contemporary brands had no real value to a Barneys consumer because they could see it everywhere and it was heavily discounted. Rag & Bone, Vince, Helmut Lang, Theory became… less and less important, but Nili filled the void with price, quality and fit,” said Daniella Vitale, former general manager of Barneys New York and current CEO of Salvatore Ferragamo North America. . “We put it on the floor with The Row, with Saint Laurent and it just took off.”

Lotan’s flagship product has always been its original military pants, but its line has evolved into “a simple, luxurious and accessible wardrobe,” said Alison Loehnis, president of luxury and fashion at Yoox Net-a. -Carry. .

“Consumers think it [clothes] are great investments that will last,” Loehnis said.

While young celebrities like Gigi Hadid and Kendall Jenner are often pictured wearing these garments, a large percentage of the brand’s shoppers are in their 30s and 40s. The consistency of its core products has also attracted older customers.

The Nili Lotan store in Palm Beach.

“It fits the bill for cool, comfy clothes that have an edge, but not in a way where you feel like you’re trying to dress like your daughter,” said Zeldie Stuart, a 69-year-old Lotan shopper. of DelRay Beach, FL. Stuart added that she was happy to support Lotan, as she is one of the few successful Israeli designers in fashion (Lotan’s husband, musician David Broza, has been dubbed the “Bruce Springsteen of Israel” and is a vocal peace activist).

Loehnis added that the Nili Lotan brand is successful because the designer herself is a woman in her 60s. The brand’s social media posts often feature Lotan styling his clothes and taking a walk in New York — a personality quite different from contemporary brands that focus on younger shoppers.

Since the pandemic, the brand has also picked up steam with younger shoppers transitioning to capsule cabinets, said Courtney Grant, vice president of buying and merchandising at retailer Elyse Walker.

“My client is still emotionally buying color, but there’s also a huge movement of people…who want less and are buying the right pieces for signature style, and Nili has designed these basics effortlessly,” Grant said.

Lotan has also resisted discounts – something that has been essential to the health of the business but also helps preserve a brand’s image.

“What we see in the US with our client, in general, but for Nili is that there is no price resistance,” Loehnis said. “There is a real appetite to invest in special pieces [that] are not cheap. They want to rely on them, season after season.

Tackling menswear and beyond

As she looks at menswear on a scale, Lotan said she’s sticking to the brand’s familiar relaxed fits and neutral colors. Loehnis predicts that more buyers will abandon suits.

Looks from Nili Lotan's Pre-Fall 2022 collection.

“There’s this moment of great excitement among the men,” Loehnis said. “While things have become more relaxed, post-pandemic, in the workplace there is [appetite] for an unstructured and versatile garment.

Over the years, several parties interested in investing in or acquiring Nili Lotan have approached Vitale for introductions, Vitale said. But Lotan said she was not interested in outside partners and wanted full autonomy to move the brand around as she pleased.

“I come from a different generation but…money is not what drives me,” she said. “If I wanted to go to the beach, have someone else invest the money and do the work, that’s another story. But I appreciate it, I love it, and more money won’t make me happier.

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