If there’s one thing that this new crop of direct-to-consumer brands does well, it’s owning their supply chains in a way that enterprise-level apparel companies often struggle to.
Just about from the start, Rhone looked to its mills and factories as collaborators integral to its success. The men’s wear startup, which evolved from a pure activewear focus at launch into a performance lifestyle brand, credits its vendors with sharing, sustaining and strategizing its vision to speak directly to the modern man—in contrast to the dual-gender approach from most athletic brands—and build quality products that fit his work hard, play hard life.
Rhone’s target customer is the man who’s getting settled into his career and starting to see some success, Kyle McClure, co-founder and chief product officer told Sourcing Journal. He’s seeking out a focus on performance and quality, and wants “whatever he invests his money in to be the best,” McClure added.
Rhone dabbled briefly in using an agent to source product back around 2013 and 2014 when it was a fledgling four-person company, but quickly realized it wasn’t “growing roots” as production jumped from one factory to the next in the quest for low-cost capacity, McClure said. Now the brand manufactures in Vietnam, Peru, Portugal and China with a “pretty tight” vendor matrix. McClure explained that the best relationships are the ones in which both factory and brand are “meaningful to each other,” and not just transactional affairs.
Though at one point Rhone manufactured as much as 60 percent of its product in China, that figure has dropped to about 30 percent as it pursued factory partners based on expertise and core competency, and expanded into new categories. McClure said he’s not terribly concerned about the simmering trade war with China, admitting that might be an “unpopular” point of view. “I don’t think it’s sustainable from either side,” he said. “There’s still such a reliance from both [the U.S. and China] for trade and importing and exporting.”
Based on its manufacturing partnership in China and with other global factories relationships, “we feel very well buffered and indemnified against there being any kind of punitive tariff situation,” McClure explained. “We can easily flex our production elsewhere. We created a very elastic supply chain for ourselves.”
Rhone can quadruple production overnight if needed, he added, but is keeping a close eye on the trade impasse “down to the HTS [Harmonized Tariff Schedule] codes” to understand the factors that could drive up its duty rates and what the financial fallout could be. If the tariff tit-for-tat reaches the point where it creates “an unreasonable erosion of our margins,” McClure explained, then Rhone would begin to look at its sourcing options.
McClure credits its Singapore office, part of the Vietnamese Bodyknits factory relationship, as enabling access to production within the South Pacific Rim as necessary. “We’re able to move pieces around within our existing framework so that we don’t have to just…uproot all of the development…and try to go to some other vendor.”
Making mistakes memorable
As a young business growing into maturity, Rhone has made its share of mistakes along the way and learned that each misstep can be an opportunity to hone customer relationships and foster loyalty—or just be better as a brand. McClure described rushing into production with the initial launch of the commuter pant, to follow the already successful commuter dress shirt, after stumbling upon a technical fabric during a visit with a Japanese mill. This was back around 2015 or 2016 when Rhone’s primary focus was still on pure activewear and not so much on performance-inspired clothing.
Rhone hadn’t conducted thorough wear testing on the garment and McClure soon discovered that a 34-waist pant hung loosely on his 36-waist frame. The pants were stretching out around the midsection because the product team hadn’t incorporated fusing into the waist, a misfire for a brand making the transition from athletic apparel into lifestyle-oriented wear-everywhere clothing. Customers were notified about the problem and offered a refund even if they’d already worn the pants.
Then there was the Swift active short. The product team was considering bonding versus welding the garment and debated whether the bottom should feature moisture wicking or water resistance. It’s possible to combine the two but usually at a detriment to one of the technologies, he explained. They went ahead with a bonded, moisture-wicking short but when customer reviews started rolling in, Rhone noticed a number of people pointing out how sweat shows up in “unflattering places” when they exercised.
As with the commuter pants fit problem, Rhone reached out to customers, assuring them that the issue would be addressed in the next season—except that it wasn’t. Somehow the person in charge of sourcing had failed to add DWR to the Swift shorts’ tech pack. One customer who’d purchase the original short purchased what should have been the new and improved item, only to email McClure again with the same complaint. “I write him a personal check,” McClure said, and gave the customer a refund while allowing him to keep the product. “I don’t want the company to have to pay for what is ultimately my responsibility.”
When the DWR-treated shorts finally came in, McClure sent that customer two pairs and gave him a discount for a Father’s Day gift for his dad as well. “His response was, ‘I’ll be a customer for life,’” McClure said. “‘I have four pairs of shorts that I absolutely hate but I really like you guys.’”
Rhone takes that approach to excellence very seriously and is applying that methodology to the sustainability feasibility studying it’s undertaking in partnership with a Hong Kong think tank. “We are students of both what our customer wants and also what the industry needs in terms of innovation,” McClure said. The brand is hoping to find out which of its current materials are recyclable and which fabrics can be swapped for recycled ones without sacrificing performance. It’s currently testing a commuter pant, among its largest SKUs, fabricated from recycled materials. “Our mill has committed to keeping the fabric price static so that’s not going to cost us any more,” McClure said. “So everyone along the supply chain can get paid.”
Like many growing digitally native brands, Rhone is keeping an eye on retail and especially its new flagship at Hudson Yards as it hopes to continue the triple-digit growth it’s clocked each year since launching in 2014. “Retail is the hot topic right now, back to bricks,” McClure said, noting the brand maintains carefully selected wholesale accounts with partners including Bloomingdales, Equinox and Nordstrom.
“We’re looking forward to what retail means for our business and what type of customer experience it creates as well,” he added. “So we’re exploring different formats for that.”