Joe Ouaknine, CEO of Titan Industries, offers his take on the retail turmoil, the perceived Amazon threat, endless competition and why, despite it all, the company is on pace for a record year.
Joe Ouaknine is a smooth operator. He exudes a sense of confidence and genuine modesty that, in the recent whirlwind of industry turmoil that has many execs at their wits’ end, comes across like a soothing breeze. Speak with the man long enough, and you just might find yourself humming Bob Marley’s classic refrain, “Don’t worry…every little thing gonna be all right.…”
The veteran exec of Titan Industries has seen his share of industry highs and lows over the decades and has always managed to find his footing. And despite being a women’s fashion house in the current athleisure boom and great retail shakeout, Titan has been really flexing its muscles of late. In fact, the now streamlined portfolio consisting of Badgley Mischka, Jewel Badgley Mischka, Splendid and newest license Rachel Roy (to debut in Spring ’18) is entering new sales territory.
I am not in the reading mood right now.
I am inspired by all my peers who are doing well. To be exact, by people from Morocco who I respect and admire. Aldo is a perfect example.
Acquiring Badgley Mischka. I thought the opportunity was out of reach at first. It’s ended up being a Cinderella story.
I would love to be a magician while keeping my present job. That would be amazing. I’m an entertainer. If I could add that to my bag of tricks…wow!
Larry David. I need to reach out. One round of golf, one dinner, followed by a cigar. I would give anything to the charity of his choice if he accepted. The guy cracks me up.
Be honest, be courteous and keep helping the needy.
“We are running 40 percent over last year,” Ouaknine says. “If this keeps up, we’ll have a record year.”
Ouaknine isn’t just blowing smoke. He’s always been honest when Titan’s business was good and when it was not so good. “People around me know when my business is not at its best, because I tell them,” he says. “Right now, however, Badgley Mischka is doing wonderfully and Splendid continues to surprise us all.”
Is Ouaknine at all surprised that the recent success comes at a time when many in the industry are struggling? “Not at all,” he says. But don’t take that response to be cocky. It’s just the way it’s always been for him. “All my life in this business, I have done well when things were not good overall,” he says, adding, “When things are good, everybody does well.” It’s just that now, Ouaknine notes, Titan’s business is performing better than well. “We’ve finally found a niche, the business has matured and it’s come to rest at a good place,” he says.
Leading the charge is Badgley Mischka, a company Ouaknine acquired about two years ago following a long-running licensing agreement. He knew the label always had enormous potential, which is why he feels fortunate to have been able to make the acquisition—before it was too late. “When it first went up for sale two years ago, we were doing so well that I was afraid somebody would buy it and then kick me to the curb,” he says. “That’s why I found a way to buy it (in March 2016 from Iconix Brand Group), and I’m so glad that we did. Mark Badgley and James Mischka are the face of the brand and they are magnificent people.”
Exactly what have the Badgley Mischka shoe collections hit upon? Ouaknine says it’s a combination of the right price point (in the $250 range) and terrific quality. “The product is just outstanding, and we now have something that nobody can take away from us,” he says.
But it wasn’t always this way, and that’s why Oauknine likens Badgley Mischka’s rise under Titan to a Cinderella story—one that began 11 years ago. “The first three years after we acquired the license, business was awful because we came out with a very expensive, European-made product and sold it exclusively to Neiman’s and Saks, but it just didn’t happen,” he says. A shift to lower prices was made and distribution expanded to include Nordstrom and other major department stores, but the quality and styling still took a few seasons to perfect. “It takes a long time to get that all right,” Ouaknine says. “For the past five or six years, we’ve been doing so well, and this year will be our best year.”
Badgley Mischka is doing so well, in fact, that Ouaknine is bucking current industry norms and is in the final stages of preparing to open four brick-and-mortar flagships—in malls, no less. Ouaknine is undeterred by the so-called Retail Apocalypse for several reasons. “I feel that Badgley Mischka shoes are doing so well that they need more exposure,” he says, noting the label has great exposure online as well as in Nordstrom, Bloomingdale’s, Macy’s, etc., but it’s still not enough. “We need more exposure. It will give the consumer the opportunity to shop the whole collection of shoes and accessories—to touch and try on our product.” And, Ouaknine adds, what better place for consumers to do that than in the four revitalized malls he is targeting. “These malls are being transformed into half stores and half food and entertainment,” he says. “All those people coming to eat and who know of our brand from online will now be able to touch and feel the merchandise. At least, that’s my view on the potential of these stores.”
Ouaknine’s view, in general, is an optimistic one, and that’s despite the pessimism coursing through the industry’s veins lately. It’s just how a smooth operator operates. “I believe you create your own optimism and pessimism,” he says. “I’m a believer in potential.” Try this analogy of his on for size: “If you went to Africa and saw that nobody had shoes on, would you say, ‘Oh my God, there’s no business because nobody wears shoes?!’ Or would you say, ‘Oh my God, what an opportunity! You can sell a ton of shoes here!’” It’s just one reason Ouaknine believes there’s an opportunity for Badgley Mischka stores. “There are not enough fashion stores in many malls now, and maybe it’s time to give consumers an opportunity to spend some of their money,” he says.
Opportunity knocks, particularly for optimists like Ouaknine. That’s why the recent industry turmoil is not pushing him toward retirement any time soon. Ouaknine believes one must find a way to adapt and survive—the same way many in the industry have done following the Financial Crisis that hit a decade ago. “A lot of people in our industry were limping after that, but you get used to it,” he says, adding, “Eventually you don’t feel the limp, which is now more of a limp, but you get used to that, too.”
Besides, Ouaknine believes it can’t be too painful, otherwise vendors would be checking out and others wouldn’t keep jumping into the fray. The potential for success is still there, he believes. “People are hanging around,” he says, noting that there are more vendors than ever before. As for the rampant industry pessimism, Ouaknine chalks much of that up to venting. “I don’t believe people really want to get out of this business,” he says. “I mean, if it is so bad then people would get out—you’re supposed to get out if you are complaining so much.” Ouaknine isn’t a complainer. “Things are good,” he says, “and when things are not so good, you just have to be optimistic that things will get better.”
Why, exactly, has Splendid been such a surprise?
It’s been a surprise to me because when we inherit a license from another company there are usually some problems with those transitions with existing retail customers. But Splendid’s transition went very well, and the brand has been performing tremendously. It’s not exactly the same type of brand, but it reminds me of our old Joe’s Jeans brand, which was California casual. So, for our design and production teams Splendid is a no-brainer. We have been working so well with the Splendid team. The product is outstanding.
What will Rachel Roy bring to the table for retailers?
Rachel Roy gives us something new: contemporary shoes offered in a large range of sizes and with comfort features. That’s totally new for us. The most notable aspects of the line are the fabrics and colors. I don’t think we have a plain black shoe in the line. The suggested retail prices are between $49 and $130. Macy’s was the first to jump on the opportunity. I’m confident the majority of the rest will follow.
How might this celebrity partnership differ from previous ones Titan has done? Any lessons learned from those?
Sure. First, we are a smaller and tighter group. We filled a hole in our portfolio, and Rachel is located near us. We’re able to hold many more design meetings. It’s a stronger union.
You’ve had your share of licenses as well as owned brands over the years. Are you leaning one way or the other now?
I want to own Badgley Mischka forever. But I don’t think I want to own anything else, unless there’s an opportunity that I just can’t pass up. And we are just licensing a few brands—not as many as I used to—and I’m good with that.
The portfolio remains decidedly women’s dress fashion and non-sneaker. Are you tempted at all to enter the athleisure market?
We do sneakers here and there, and they work well. That said, we’ve always been a dress fashion house. There are times where it’s an advantage and times where it’s not. But to have an all-out sneaker brand now is a little too late. If you recall, we started a luxury sneaker brand, UES, with Seth Campbell a few years back. The styling was amazing, and it was a true luxury sneaker brand. But we came out too early. A year later, brands like Golden Goose and Buscemi were born and have continued what we started. I am not saying they copied us, rather they continued the concept of luxury sneakers and have done very well. Seth Campbell and his designs, unfortunately, were a year or so early. But the shoes were revolutionary and looked so good.
Might women tire of sneakers as the go-to style? What must happen to make women want to get out of their yoga pants, basically?
The fashion sneaker is here for good. It’s just too convenient. As a result, dress houses like us lose a portion of the overall shoe business, but then how do you explain our success? We must excel at what we do and maintain or garner a larger piece of the pie because another fashion house may not be excelling.
Speaking of garnering larger shares of a pie, what’s your take on Amazon?
It’s hard for me to criticize Amazon. They are one of our biggest customers, and we have a solid business with them. They are great people to work with. They buy our shoes at full price. I don’t see them as a threat. I see them as a plus. But like most retailers, they want to create their own private label. They are acting like any other department store.
What might that mean to the relationship going forward?
Nothing, really. People are going to buy my brands, if they want to. If Amazon can duplicate my brands with one of their brands, then maybe they will get rid of me. But I don’t think that will happen.
What is the biggest challenge facing retailers right now?
Competition. Retailers are all trying to outthink one another. Innovation will come out the winner.
What might the traditional shoe store look like in five or 10 years? Will it even exist?
Maybe robots will attend to the customers? I see stores carrying very
little inventory. Consumers will come in to feel and try on the merchandise and order online from that same store.
Just where are we in this shakeout and what might the landscape look like when, and if, the dust settles?
To answer that, I need a crystal ball. I don’t have one. That aside, I’m not an analyst, but I can certainly say that no one knows exactly what the landscape will look like in the future.
What are your goals for the remainder of this year?
Keep doing what we are doing. There can’t be any other goal. All this talk of the so-called retail apocalypse doesn’t bother me that much. We have a specific business, and we have strong brands. The real challenge at this point is to keep the momentum. You can’t be up 40 percent for the year and have something bad in your mix. Badgley Mischka is thriving. Our new brand Jewel is a little less than a year old and is performing way beyond our expectations. Splendid is amazing. We are phasing out of Daya by Zendaya, but I have high expectations for Rachel Roy. We’re clicking on all cylinders right now. So, the business can’t be all that bad.
Where do you see Titan in three years?
I cannot dream like I used to about the future. If my plan to open Badgley Mischka stores works, I believe that will be a game-changer for our company. In the meantime, we are being pursued by the competition like everyone else. They all want a piece of us. But if we keep delivering product at sublime quality like we have been doing of late then, three years from now, we should be even better than we are today.
What keeps you coming in to work each day?
Well, I don’t go to the office every day. The world has changed. You can work from anywhere. What keeps me in the game is the success we are having, and I’m driven by challenges and opportunities the world presents.
Despite a lot of general industry doom-and-gloom, why might you still be optimistic about your business and the shoe industry overall?
I have to remain optimistic. First off, our business is good, but I’m not going to throw away my entire career if things were any different. You have to be resilient and fight.
What do you love most about your job and this industry?
I love the people I work with here and abroad. They are relationships that I’ve cultivated throughout the years. Most of all, I love thinking what and who I can help on this earth. It’s a big part that motivates me. Give back a little or a lot, but give back. Don’t die with it, please. •