Bloomberg Audio Studios, Podcasts, radio News. You're listening to Bloomberg Business Week with Carol Masser and tim Stenoveek on Bloomberg Radio. We spent a lot of time talking about big companies today. We covered open Ai, Amazon and Nvidia, Nokia and more. A lot of the tech space too. Kind of want to zoom in a little bit on one of the smaller companies that.
We talk about, Jeans. I had to look, Oh, I am we're in jeans.
Yeah, Im, We're in James Yeah. Okay, but it's like a.
Super jeans a lot. Now, Yeah, I wear jeans all the time.
Now we're talking jeans. We're talking jeans because we've got Michael Buckley with us, the CEO of True Religion. He joins us from Gardena, California, so everybody knows the True Religion. The company began back in two thousand and two. It was publicly traded for a few years. It was taken private back in twenty thirteen. Earlier this year, Akon Investments took a majority stake in the company. Michael, you've been there for quite some time as CEO for wow six
years at this point. Before we I want to ask you how businesses. I want to get an idea of the consumer. But because you're a private company, can you we don't have access to all the numbers that you know we do with public companies. Can you just throw us a few numbers contextualize for our audience the size of your business right now?
Yeah, this year we're going to be just short of about five hundred million dollars in revenue, and that's we've doubled it over the last four years. And extremely it's the most profitable that it's ever been in.
The twenty two year history.
Wow.
And I don't know if you guys know, but I was here the first time, so to speak. I was the president of the company when it was public, and I was here from two thousand and six and twenty ten.
So what are you able to do now as a private company that's allowing you to be more profitable than you were back as a public company when you were a president?
You know?
When I you know, clearly the first thing you got to really understand in is business is who's your customer. So when I came back in twenty nineteen, the first thing I did was a consumer to really understand. I thought I understood who the customer was, but I wanted to really understand who the customer was from what it was. Call it in two thousand and five to twenty and twelve, when we were selling a you know, a high income Norse from Niemen Sacks, Bloomingdale's early adopter customer. So did
a survey and it came back very clear. Men and women fifteenth to fifty the corebian like twenty to forty years old, African, American, Latino, White, Asian, all races, but about sixty five thousand household income, which is clearly it's the American average, but it's a lot less than the consumer. I was paying three hundred dollars for pair jeens at the beginning of the brand's history.
Yeah, I mean it's funny, Like I was thinking about how many different types like brands of genes I have in my wardrobe and I've gone all in on jeans in the last couple of years, and it's there's lots of choices out there, but price point does matter, right, Like, So how do you think about Michael, Like how you guys differentiate yourself. Yes, you can have a name and a brand, but I feel like there's more at play.
Yeah, I mean I.
Think for us, I mean, first of all, just to set the uh the land. In terms of what this brand stands for today, we're about forty percent jeans. So of the five hundred million dollars, we're doing forty percent jeans and sixty percent in what we'll call sports for us, so I sell millions of T shirts, hoodies, joggers, button down shirts, dresses, skirts, you know, all apparallel classifications in
addition to a number of accessory classifications. So you know, for us to be to be relevant, I mean knowing the customer. We know what the customer wants in terms of product, we know what the customer is willing to pay, and by reinventing the supply chain of the company, we're able to give the.
Customer what they want at the price they want.
And quite frankly, our price is today, you know, it could be anywhere from you know, sixty nine to one hundred and ten dollars for a pair of jeans. It could be nineteen ninety nine, twenty nine, ninety nine, thirty nine ninety nine for a hoodie or a T shirt. You know, we're position at price points where half of the two hundred and fifty billion in apparel and accessories
as sold that today. Now you compare that two years ago when we sold three hundred dollar jeans, which was literally only a couple of billion dollar business.
So today the brand.
Has the ability to have a much more wider appeal based on the size of the audience that were going after as well as the price points that were able to hit for this consumer.
Talk to me about your supply chain. Where are the products made?
We make them all over the world.
I mean, once upon a time we made everything in Los Angeles, and then eventually that shifted to Mexico and South America.
Do you make anything in La anymore?
We might do a couple items fast Chase, but predominantly it's ninety nine percent in other markets outside the US.
Okay, sorry I cut you off, but you were talking about the other countries that you're in.
Yeah, so we're in China, We're in Cambodia, We're in Vietnam, We're in Bangladesh, India, Pakistan, other countries in Guatemala, and some countries in South America, tiny tiny bit out of Mexico, So it's pretty diverse.
Aspying today surprised to hear China for a couple of reasons. One, I thought that apparel manufacturing wasn't as big as it has been traditionally because that economy really has shifted to higher tech. But also because of tariffs. And you know, we knew the trade war in the first Trump administration sort of was a warning to many companies that that were manufacturing in China to find somewhere else to do it. What what do you do in China right now? And why are you still there?
Well, first, of Allo's tariffs everywhere.
Now there now the first Trump term, they were they were there was no so called liberation day.
True.
I mean today we do a lot out of China. We do a lot of out of other countries. We you know, like some of the suppliers out of China are very good in terms of making apparel.
They are very quick.
They have the ability to do more fashion compared to other countries that are doing just more basics in mass volume.
Hey, Michael, why we've worked with our Ooh sorry, I'm sorry, No.
No, no, please continue.
You know, we've worked with our suppliers.
We literally work with our suppliers to our design team will work with the suppliers to be able to bring the product in the quality we want, the details we want, at the cost we want, and whether that's China or other countries out there. So we've been fortunate partnering with these factories during Liberation Day and beyond, and we've mitigated you know, almost I want to say almost all, but probably ninety percent of the tariff impact that we've mitigated with partnerships with these factories.
Hey, one thing I want to ask you about is marketing. And I know you guys just rolled out your holiday plan or holiday campaign. I'm thinking of. You know how much we talked about American Eagle and Sydney Sweeney and you know, the provocative you know, having good genes and so on and so forth are great genes. I mean, that got so much momentum. The President even commented on it. So tell us about the marketing you know, spend how much which that is crucial to your growth strategy.
It's it's tremendously crucial. I mean, you know, it wasn't the first thing we invested in when I came back. I mean, I have a lot to fix in terms of supply chain, in terms of really building building out the product really getting woman's back to fifty percent of the business.
But we invest heavily in marketing. Today.
We spend about ten percent of our turnover. So this year it's you know, circa fifty million dollars we'll spend on marketing and we'll continue to spend at that level to get the you know, we want to make sure that that we're relevant to this consumer that we know is our customer, and it's important. You know, we just
launched our campaign with Sierra. You know, we've done other major campaigns with people that are relevant today, Megan Thee, Stallion, Anita Sweetie, you know, Quavo, India Love, you know, lots of people that are relevant to this consumer today. So it's incredibly important for us to continue to invest in the right talent that that makes this brand relevant to this consumer.
So so, I mean, I know you can't give us any names about who you're thinking about, but how would you describe the individuals you've worked with or the brand image that you want to convey.
I think that they work perfectly for who our consumer is. We have a very diverse consumer and you know, the success of this business, I mean literally since we really started to invest heavily in marketing over the last couple of years, Like I said, we've doubled the size of this business as we've ramped up the marketing spend.
The close to ten percent of revenue.
So the people we pick resonate well with the consumers that we know are the demographic target of this brand.
So you're known for jeans, but as you mentioned to us, that's now less than half of your business. The area the biggest area of growth from an imperil perspective, what is it.
I mean, we're in a lot of categories.
We're in button down woven shirts, we're in sweaters, we're in an outer where we just need to go deeper in those categories. I mean, we believe long term, you know, having started as a gene company, genes will be circa forty percent of the business. But the growth of a brand is really going to come from us just selling more of these other classifications as well as selling you know,
a lot more genes. You know, the price points that we sell out today, Like I said, over half of the two hundred and fifty billion of parallel accessories have sold that and the addressable market of this brand is around one hundred and twenty million consumers today versus ten million consumers when we were selling three hundred dollar genes.
So you know, we believe, I mean, our path is to get to a billion over the next four or five years, but we believe long term this should be a multi billion dollar brand, you know, like the Levi's, Fashion Nova's and other Tommy's Calvins of the world.
What's the best channel for selling. You've got stores, You've got online, You've got you know, partnerships, whether it's at you know, various I don't want to say, you know, department stores. You know what is the best or where's the growth?
The growth is everywhere.
I mean the business today is let's call it circa forty five percent coming from True Religion dot com. And then the balance is evenly split between fifty of our own brick and mortar stores, which are highly profitable. I mean it's forty five percent full will leave it the model within our stores, and the balance is I mean six thousand wholesale locations between North and North America, and I'm in another thousand wholesale locations outside of North America.
So you know, we're in the Macy's and Dillard's and downtown locker Rooms and Pakistan's, Tilly's, Zoomies, Urban Outfitters, Buckles of the World, plus a lot of independent stores, you know, as well as major yeah and mead sized retailers outside the US as well.
So owned by private equity. Obviously there's should be a payday for private equity. That's what they're expecting. You were at the company when it was public. Is the plan to take at public again?
You know, obviously it's private equity owned. I mean at some point in time. Private equity always wants to monetize. I mean, I enjoyed running a public company.
You know, it's really up to them what they want to do with it over time.
All right, you know what we want to know. You're wearing jeans, I assume right, of.
Course I'm wearing True I have my I have my suit and tie on. Here my suit and uh and my white shirt on. But yes, I'm wearing True Religion.
All right. Just check it, hey, listen, stay in touch. Let's know how things are going, especially as we get into that all important holiday shopping season. Michael Buckley, his chief executive officer True Religion, joining us from California,