On a snowy Thursday in Montreal, as Americans celebrate Thanksgiving and locals mourn the opening days of their interminable winter, the offices of Frank + Oak are humming with activity. Since the clothing retailer does half of its business in the United States, the week of Black Friday is the company’s busiest of the year and the culmination of months of preparation. In the Frank + Oak warehouse in Montreal’s hip Mile End neighbourhood, workers press oxford shirts and box crewneck sweaters, hand-signing a note for each order—a small token of analog humanity in a frictionless digital experience—before piling them up on pallets destined for Los Angeles and Atlanta, Vancouver and Kitchener, Ont. Up on the sixth floor, in a barely converted industrial space, millennials in T-shirt dresses and expertly cuffed jeans tap away on computers: the web team in one corner; the marketers in another; the developers camped out under a skull-and-crossbones flag tagged with “don’t feed the devs.”
The place looks precisely like what it is: the home of a tech startup caught in the midst of a thrilling, if somewhat awkward, growth spurt. At the office’s entrance, a foosball table and punching bag sit unused. The unfinished cement floor is cut through with a couple of white walls, slapped up in a hurry when management realized the open-concept design hadn’t left space for meetings.
In one of those hastily constructed conference rooms, away from the Black Friday hubbub, Ethan Song sits with his design team. The 33-year-old co-founder and CEO of Frank + Oak watches as designer after designer offers ideas for next season—swatches of interesting fabrics, sketches of new silhouettes, racks of prototypes that, if everything goes according to plan, the young creative professionals of summer 2017 will find appealingly on-brand. While the staff works to keep the day’s orders flowing, Song’s priorities are elsewhere, his sights set firmly on the future.
It’s an attitude that has helped Frank + Oak become, in less than five years, one of the leaders in a new world of retail. At a time when most traditional Canadian clothing merchants are suffering, Frank + Oak has prospered by selling its line of affordable basics to creative-class millennials across North America. When it launched, it was so short-staffed Song shot photographs himself, with co-founder Hicham Ratnani modelling clothes. Today it’s a company of more than 250 employees serving a member (read: online customer) base of more than three million. In 2015, the company topped Deloitte’s Canadian Technology Fast 50, with a four-year revenue growth rate of 18,480%.
In addition to running a website and app, Frank + Oak operates 16 bricks-and-mortar stores with in-store barbershops and cafés—brand outposts less concerned with sales per square foot than hosting whisky tastings and promoting the Frank + Oak aesthetic. “I think they’re the future of retail,” says Tamara Szames, the fashion industry expert at market research consultancy NPD Group. “What they’ve identified is the evolution of how people want to buy.”
This fall, the company launched its first womenswear line. It’s a move that more than doubles its potential market, but it also puts Frank + Oak into a much more crowded and competitive space. For a firm that has carved out a distinctive identity as a brand for young men, the expansion risks alienating existing customers and putting a strain on resources.
But it’s a risk Ethan Song sees as essential. As he explains it, selling clothes to men on the Internet may have obscured Frank + Oak’s real ambitions: to become a global lifestyle brand for entrepreneurial millennials like him and his friends. And if you have earth-sized ambitions, excluding half the population seems absurd. “You can’t be afraid to reinvent yourself,” says Song. “If you see a big opportunity in the market and say, ‘You know what, it could be a good opportunity, but I need to do what I do now,’ there’s a high chance that in four or five years, you’re going to regret it.”
In Song’s opinion, there are two kinds of entrepreneurs: people who build a startup because they’re passionate about a specific business—a desire to create the world’s largest cold-pressed juice empire, say, or a sudden insight that betting on video games is the future of fantasy sports—and people who are entrepreneurs because that’s just the only thing they can imagine doing.
Song and Hicham Ratnani are the latter. The two met as teenagers, riding the bus to their high school in Montreal’s South Shore, and almost immediately went into business together designing websites for local schools. After university, they reconnected and began working as consultants at Deloitte, all the while scheming about how to found their own startup.
The friends had no idea what they wanted to sell, but they had a few convictions. They knew the Internet was upending retail. And they knew that in the digital age, brands were going to be built differently. They felt an online company focused on a specific demographic could ignore geography and find a niche in the global market, and they could run it right from their Montreal neighbourhood.
After considering a beauty venture and something devoted to sustainability, they settled on men’s clothing. “Our friends, they didn’t really know where to buy stuff,” Ratnani remembers. “We realized there was a real pain point for men.” In the new economy, the office uniform was gone. Men like their friends were looking for more fashionable looks and, Ratnani and Song believed, there was money to be made in helping them.
In 2010, Song and Ratnani started Modasuite, an online company offering fully customizable menswear. That first year, the business attracted a few investors and made some decent sales. But it quickly became apparent that the number of people willing to answer 16 questions in order to get a personalized dress shirt was limited. “We realized that the future was in fewer steps, more simplicity,” says Song. “We saw that as a bigger trend than mass customization.” In a world of paralyzing variety, they felt, the most useful service wasn’t giving people infinite possibility. It was offering them precisely what they wanted, like Netflix figuring out what viewers feel like watching next.
The realization that a much bigger opportunity was right there, adjacent to their actual business, pushed the two men into action. They shuttered Modasuite and, in 2012, launched Frank + Oak, proffering their own designs in an effort to keep prices down. From the start, the focus was on making the experience of buying apparel as easy and as pleasurable as possible. Song and Ratnani considered the venture as much a tech startup as a fashion brand. Providing an appealing digital experience for shoppers was their top priority; bricks and mortar were a secondary concern. “They basically did everything backwards,” says Doug Stephens, a Toronto-based retail adviser.
By starting online, they could learn about their market without huge investments. As 20-somethings living in Mile End, they had no trouble figuring out what appealed to mysterious millennials: They just needed to walk around the block. The partners would put their designs up for sale on the site, see what people liked and adjust accordingly.
It didn’t hurt that the company started selling menswear online at the perfect moment. According to a study by research firm IBISWorld, men’s clothing was the fastest growing category in online sales from 2010 to 2015: not a bad tailwind for a startup in the sector. But the trends are shifting. “Growth in the men’s online market has slowed,” says Tamara Szames of NPD. “It’s no wonder they’re going into the women’s market.”
In the Frank + Oak organization, Song is the visionary, while the soft-spoken Ratnani—who is both COO and CFO—is the guy who takes care of executing that vision. “He has a lot of ideas, and he throws them at me,” says Ratnani. “And I can take a lot of ideas.”
Song is a practiced public speaker, a charismatic presence who talks with his hands and indulges in the language of the tech guru. He offers sweeping statements about redefining the retail business and soaring visions of the digital future that take the listener into a heady atmosphere of Big Ideas only tenuously connected to the quotidian, earthbound business of selling $45 slim-fit gingham shirts.
“One of the [startup] concepts I always go back to is, ‘find your wide space,’” Song tells me during a break from his product meeting. Online menswear had been a wide space, he explains—one uncluttered by competition, where a new company could find room to grow. The women’s market was dissimilar, more crowded. That once seemed unappealing to Song, but today, he sees things differently. “I realized that sometimes the wide space doesn’t have to be a massive wide space. It can be a focused wide space in a multibillion-dollar business.”
“And what is that space, exactly?” I ask.
“Well, I can’t tell you,” says Song, frowning. “If I tell you too much, then people are going to know.”
In early 2015, when he and Ratnani took stock of the state of their business, a few factors convinced them it was time to move into the women’s market. First, clothes were becoming more unisex across the board, especially among the young urbanites they were targeting. Second, the brand already had a female audience. About a quarter of the people walking into Frank + Oak stores and visiting the website were women—people buying dress shirts for themselves or shopping for their boyfriends. Finally, there was simply the pressure of growing older as a company. “If you wait too long,” says Song, “it gets harder.”
The team began figuring out what a brand built for men, with its dark-wood store interiors and masculine name, would look like for women. They hired a market research firm, polled 4,000 people in Frank + Oak’s target demographic about their social values and attitudes, and used the data to build a profile of the prototypical customer. “Her name is Charlotte,” says Eric Alper, the company’s CMO. “Charlotte works in a creative space, in film production, in PR or maybe in architecture. Charlotte is cultured. She’s not necessarily super risk-taking, but she likes pieces with character and a story behind them.” Further, the quintessential female Frank + Oak shopper strongly believes in gender equality. She isn’t interested in following in the footsteps of her parents when it comes to her career. She cares more about “following her passions” than building a resumé and climbing the corporate ladder. She represents, in Alper’s view, “just a massive generational shift in values.”
This is, of course, an awful lot of personal identity for a pair of high-waisted jeans to support. But if Frank + Oak has done one thing well, it’s attaching itself to this aspirational vision of the young new-economy worker. Walk into a store—old-school hip-hop playing softly, like Muzak for millennials—and you’ll find customers leafing through Oak Street, the company’s in-house magazine (a recent issue features an editorial by Ethan Song that quotes Steve Jobs’s thoughts on the intersection of technology and the liberal arts). This fall, the company—doubtlessly aware that young people distrust brands that don’t give back and eager to signal its commitment to gender equality—launched what it calls the 50/50 Founders’ Fund, donating a dollar from each sale to a pool of seed money evenly distributed between startups led by men and women. Aligning with the “entrepreneur” is deliberate. It’s a word that, here, does not so much connote an actual small-business owner as a feeling—an image of the young worker in the 21st-century gig economy who DJs on the weekends and, while almost certainly doing underpaid and entirely precarious labour, has earned the right to work from her local coffee shop in the slouchy drop-shoulder crewneck of her choice.
This past summer, Frank + Oak ran a teaser campaign announcing its entry into the women’s market and promising early access to those who signed up with an email address. On September 15, the pre-sale began with a familiar mix of affordable basics, from soft cotton T-shirts and oversized cardigans to bomber jackets and double-breasted blazers. The collection did well: According to the company, Frank + Oak Women had more than 100,000 customers in its first two months. And though the launch itself was bumpy—the since-abandoned email address requirement sparked grumbling online, and high traffic crashed the website for much of the first day—Song seems unconcerned. He’s more worried about making women feel welcome and ensuring existing customers don’t feel left behind.
He’s already looking at the shopper data, trying to learn more about what the Charlottes of the world actually buy. Sales patterns show Charlotte is drawn to slightly more fashion-forward items, so Frank + Oak plans to add more to the mix. “I think a company’s ability to put product out fast—with lower risk and lower quantities—and to have real data from real experiences is very important,” says Song. “I believe less in pre-launch research.” Such hawkish analysis is what informs Frank + Oak’s decision-making—it isn’t there to push an aesthetic vision on customers, it’s there to give them what they want—but it also means staff must monitor, analyze and act on information incredibly quickly, lest the firm find itself with a warehouse full of sweatpants nobody wants.
When people describe Frank + Oak as a new company, Ethan Song cringes. “Sure, we’re young compared to 30-year-old companies, but so much has changed in the last five years,” he says. “When we started, the dominant platform was Facebook. There was no mobile. Apps were new.”
For Song, this accelerated rate of change means the company must constantly reinvent itself to keep the next group of 20-somethings looking to disrupt the industry at bay. (“I can assure you that somewhere out there is an entrepreneur in their parents’ basement working at something that could disrupt Frank + Oak,” says retail adviser Stephens.) Song believes the future lies in artificial intelligence—machine learning that can look at a customer’s online profile and understand whether he is the sort of person who needs two new white dress shirts for work, plus a Kanye West–approved hoodie. Frank + Oak is already using chatbots to offer customers style tips. The mock store at head office boasts a smart mirror with a digital display that, in theory, could let people buy an item or find a better fit without leaving the dressing room.
Talking of all this in the Frank + Oak boardroom, Song shifts into guru mode, opining about a future that seems (to him) crystal clear, even if—always working to be a step ahead—he won’t share exactly what he sees. “Software is going to transform every type of experience,” he says, hands flying. “There’s still a big space for physical shopping streets and malls. But I do believe the experience is going to be transformed.”
“In what way, exactly?” I ask.
Song laughs. “I can’t tell you,” he says, “or else everyone will do it.”
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