Checking in: Tracking progress at Oliver Cabell (the Everlane of bags) six months after launch.
To go fast, go alone; to go far, go with others. So goes the well-worn African proverb, whose primary teaching — the power of partnerships — is a lesson not lost on Oliver Cabell’s Scott Gabrielson, the company’s founder. As one of the newer entries in a growing class of online-based luxury brands, Oliver Cabell, which specializes in Italian-made weekenders and backpacks, has applied this lesson to business, with impressive early results.
Since launching to good press on June 28 of this year, the company, in finding its feet, has experienced minor growing pains — chief among them, becoming gripped by the idea that ‘if you build it, they will come.’ “We were naive when we launched in the sense that we if we have a nice story and a strong product that things are just going to sell themselves,” Mr. Gabrielson recalls. “That’s just not the case — especially given how saturated e-commerce is and the amount of direct-to-consumer brands that have risen. We were certainly naive to that.”
So rather than lying in wait and passively hoping to attract the right customers by chance, Oliver Cabell needed to join forces with larger brands in modern luxury to help push things along. As a company that has, up to now, thrived well on limitation — they’ve taken on no institutional capital to date — they’ve invested heavily in strategic partnerships with more established — but like-minded — modern luxury peers.
They’ve partnered with the likes of Need Supply, AYR, and Ledbury for small giveaways and sweepstakes, leveraging those brands’ pre-existing customer bases, in order to bring traction to Oliver Cabell. It’s a creative and smart way to develop an audience and build awareness for a brand that is bootstrapped and focused on positive cash flow.
It’s also become their primary growth strategy. And as of yesterday, Oliver Cabell has entered a more mature phase in its partnership model: A shared pop-up on Crosby Street in Soho, lasting for one week, with NYC-based outerwear upstarts The Arrivals. So far, it’s the high point of the company’s partnership strategy.
A unique space.
By opting to specialize in high-end weekenders and backpacks, Oliver Cabell occupies a unique space separate from the majority of direct-to-consumer luxury brands. Most focus on apparel, fragrances, or shoes; others, like Casper, specialize in consumer goods. But Oliver Cabell stands alone: As of the date of this report, it’s the only direct-to-consumer company that’s strictly specializing in high-end luxury bags today.
Mr. Gabrielson articulates his thinking on this well. “There’s no brand out there in the bags and leather goods space that we really, really admire — especially that encompasses this modern, DTC brand set,” he explains. “We can look at other categories like Casper in mattresses, and Jack Erwin in shoes, and find these amazing brands that have been build in the last five years, but we haven’t found anyone we really love that’s been doing it in this space.”
This independence is fitting, because the upstart is also something of a protest against the smoke-and-mirrors tactics of the fashion industry. Mr. Gabrielson first became interested in the direct-to-consumer space in 2013 as an MBA student at the University of Oxford, which coincided with the Bangladesh factory collapse. While visiting a factory in Asia for R&D, he came face to face with the fashion and luxury industries’ more troubling trade secrets. “When we were in Asia and seeing some brands that we had admired being produced in these terrible conditions,” he remembers.
The lack of transparency, he says, has allowed both established luxury and fast fashion companies to produce their goods in subprime factory conditions. Leaning on a brand’s heritage or hipness, has allowed them to do so, without much in the way of repercussions.
The brands are also remarkably opaque in claiming the origins where their goods are actually produced. “We learned after essentially spending a year studying high-end fashion industry, that a lot of the production sourcing that happens there is very much a stretch in terms of the quality that they’re communicating to the customer,” he explains. “There are a few conglomerates out there that control the large majority of the space. And there are these legal loopholes that allow them to do production in countries that they’re not claiming origination to [like China], then doing finishing touches in other countries and being able to claim origination in those countries. We really just wanted to build a brand that we had trust in, that was honest in the way it communicated to customers. But being really high quality was also very important to us. We wanted to offer the best value as possible to the customer.”
Back at the Asian factory he was visiting, he spotted a perfect opportunity. Accessories are products that typically deliver the highest markups for global luxury brands. They are pure growth and profit drivers for most of them. He saw that the factories Asia, apart from their poor working conditions, were also producing the backpacks and weekenders for these brands at obscene markups. Having witnessed firsthand how the sausage gets made, this became the inspiration for Oliver Cabell.
But given capital constraints — and therefore unable to take on excess inventory — bags also presented a fortuitous opportunity as a young, online-based brand. “The nice thing about accessories is that there’s no sizing, which really limits the SKU count needed,” Mr. Gabrielson explains. “For example, if you’re going to be doing shoes, you’re maybe going to be doing two styles, but you’d still need them in ten sizes. That’s a huge financial burden, especially when you don’t know what style and what color are going to actually sell. The nice thing for us is that we don’t have to worry about that.”
Oliver Cabell, six months in.
Mr. Gabrielson, citing ongoing fundraising efforts, declined to disclose Oliver Cabell’s revenues up to this point. But as these discussions heat up, he remains in an strong position. All in, the company has brought in less than $100k in seed capital from debt and government grants, which means he’s grown the business over the last several months and still owns 100% of it. And though the business isn’t yet profitable in these early days, it’s been operating at break-even.
It should also come as no surprise, given the brand’s look and feel, that international sales have been particularly strong for them. Sales are split almost evenly between US and international, and in the US, New York and San Francisco are its most active markets, not unlike many brands in the space. But there’s also good traction in Scandinavia — which makes sense given the Oliver Cabell aesthetic — the UK, and Australia, a market on the rise (both in terms of consumption and modern luxury brand count). The majority of Oliver Cabell’s customers lie between the ages of 24 and 40, which skews the brand towards an older modern luxury crowd than, say, a Warby Parker or an Everlane, whose price points and positioning are geared towards a younger customer base, between 18 and 30 years of age.
Heading into 2017, Mr. Gabrielson is focused on maintaining the brand’s current trajectory. There are also opportunities for strategic product development in key areas. “We think the best brands are built category by category,” he says, and the potential is there to extend Oliver Cabell’s reach into travel-related product areas, not just bags. Likewise, the brand is currently unisex, but he hopes to provide a set of products that cater to men and women separately.
One thing is for sure, however: though a new seed round with angel investors is forthcoming, Mr. Gabrielson has no intention of developing a reliance on artificial capital injections. He is, as always, focused on running a cash-flow positive business — and that’s one thing that is unlikely to change. “Less is more, and that applies to everything we do,” he says. “That’s core to what we are.”
