Billy Reid’s presence in stores is going to grow significantly.
The direct-to-consumer division of AI-powered made-to-measure startup Knot Standard has been bought by the designer’s parent firm, Billy Reid Inc. The united company will operate under the Billy Reid name, and Knot Standard will become a minority shareholder. Terms of the deal were not disclosed.
Upon closer examination, the transaction appears somewhat unconventional, but it actually makes more sense. “We had a made-to-measure business before COVID that was successful commercially, but it was operationally difficult and we shut it down,” stated Jeff Zens, CEO of Billy Reid. We sought to re-enter and were referred to Knot Standard as a service advisor.
After striking a partnership, Knot Standard is now producing menswear tailored to fit at the Billy Reid store in Charleston, South Carolina. Over the next few months, the service will be made available to roughly half of the fleet. There are currently twelve Billy Reid locations, one of which just opened on Abbot Kinney in Venice, California, last month.
In the latter half of 2018, Zens clarified, he was investigating ways to get money to launch stores and spur growth for the Billy Reid brand. Among the possible backers was Provenance, a Los Angeles-based growth equity investment firm that had acquired a majority stake in Knot Standard the previous year.
Billy Reid will assume control of the eight Knot Standard retail locations in New York, Chicago, Los Angeles, San Francisco, Washington, D.C., Houston, Dallas, and Austin, Texas, along with the company’s online operations, following the acquisition. All of these stores will carry ready-to-wear items for the first time. This year, the company anticipates making about $45 million in sales.
The technology division of Knot Standard, which offers made-to-measure services to retailers including Nordstrom, Bloomingdale’s, and Brooks Brothers, will remain operational.
In the coming months, Zens stated, the company plans to “rebrand” itself as Billy Reid, most likely dropping the Knot Standard moniker.
“The product quality, shared customer base, and distinctive business model are what first drew us in, and they will all work in tandem with Billy Reid’s operations to build a better consumer offering than either brand could have on its own,” Zens stated. “This transaction brings us to L.A. and San Francisco while also building a larger, more successful firm. Our geographical reach is increased, and their and our clients are cross-pollinated.
Mueller will join the board of the company and the retail staff of Knot Standard will become Billy Reid employees as part of the agreement.
Billy Reid
The Alabama-based Since introducing his first brand, William Reid, in New York in March 1998, Billy Reid has gone through many highs and lows. After the terrorist attacks of September 11, 2001, he closed the label and returned to his native Alabama to conduct some introspection because sales had fallen so precipitously. Relaunching as Billy Reid in 2004, he is renowned for his textile designs and Southern-skewed aesthetic. He is one of only four designers to have won four Council of Fashion Designers of America awards.
Joel Anderson, an Alabama businessman, had been covertly holding a controlling share in the company for many years. In 2018, Reid sold a minority share to Kemmons Wilson Companies, an investment group based in Memphis that is run by the Holiday Inn chain’s descendants. But according to Zens, Anderson passed away during the epidemic, and Kemmons Wilson increased their investment to take a majority stake.
Reid remarked, “It’s been quite an interesting ride.” Joel and I had a close relationship and experienced many highs and lows, but we are lucky to have the Wilsons’ support. They are in it for the long run and prioritized their consumers first.
He continued by saying that in his opinion, the Billy Reid company will benefit greatly from the Knot Standard acquisition in terms of technological skills, which will enable the creation of “more special pieces” and “smaller production runs.” Since we now have the technology, we will be able to provide more unique experiences for those who request them.
Reid stressed that his textile development and production won’t change, but the acquisition will allow him to use some of the unique fabrics he creates in made-to-measure garments. “It opens up a whole new world,” he said, adding that his Bond peacoat, a perennial bestseller, can now be offered on a made-to-measure basis.
Partnering with Knot Standard also allows Billy Reid to “build awareness and reach more customers by integrating our two customer bases,” he said. “The world is moving fast, but this puts us in a really good position to build from. This merger is a great step forward for us.”
Billy Reid had fifteen locations nationwide at one point, but Zens noted that despite having to close some of them due to the epidemic, the company “came out cleaner and it’s great to be in growth mode.” Our comps increased by 25 to 30 percent the previous year.
Zens stated that he will “revisit” his intentions to secure further funding to expand the upgraded Billy Reid company after the transaction is completed. He expressed excitement about adding more stores and going back to Shindig, the designer’s customer-facing summertime music, art, food, and fashion festival in Florence, Alabama. “A lot more will be released in the fall.”
Prior to COVID-19, Reid stated that the last Shindig took place in 2019. He plans to bring it back later in the year.
According to Mueller, Knot Standard provides services to over 120 retail locations worldwide, generating over $30 million in revenue. The business will keep working with these customers, which includes Nordstrom, which currently has 39 sites and will add 97 by the end of the year. The clothing made will have the Knot Standard label at Nordstrom and other retailers in the United States, United Kingdom, and Australia. Additionally, Mueller stated that Nordstrom’s production team makes made-to-measure items for other brands the store carries, such Jack Victor. For their own products, other retail clients utilize the made-to-measure software, measuring, and ordering capabilities provided by the company.
Mueller stated that six more retailers, including 40 David Jones locations in Australia, will join the partnership by the end of the summer. In addition to other major names I can’t yet reveal, we’re developing a pilot for Todd Snyder, he said. He did disclose that, in addition to custom clothing that will debut in the fall, he is collaborating with Brooks Brothers to introduce a unique capsule with its creative director Michael Bastian in all of its stores.
Mueller reported that 18 months after joining Brooks Brothers, the company now sells 10% of made-to-measure suits, and Knot Standard is now Nordstrom’s 12th-largest men’s brand with wholesale sales increasing 84% from the previous year. Retailers are loving the concept of being able to sell customized products without having to maintain any inventory and just paying Knot Standard a percentage of sales, he said, adding that “things are really shifting.”
Mueller and John Ballay, who met as young migrants in Dubai, launched Knot Standard in 2011. Inspired by the custom-made apparel that was so common in the area, they felt that American men should have access to the same caliber and degree of personalization. Ballay is currently a consultant and advisor to other businesses, having left the company.
