Peter Smathers Carter, left, and Austin Branson, in their Georgetown store, are best friends who own Bethesda-based Smathers & Branson, which sells preppy and sports-themed accessories. (Katherine Frey/The Washington Post)
It was a historic moment.
There was Chicago Cubs owner Thomas S. Ricketts holding up his baseball club’s World Series trophy last October. The trophy signified the end to the Cubs’ 108-year championship drought.
But there was another trophy in the photo you surely missed.
That would be the belt Ricketts was wearing. It was the Cubs Cooperstown needlepoint belt manufactured by Smathers & Branson, a Bethesda business I first wrote about nine years ago.
“It was incredible to see Ricketts wearing our belt and great to be part of history,” said co-owner Peter Smathers Carter, 35. “We still can’t keep up with Cubs demand. We sold as much Cubs stuff last year as we sold for the rest of the teams in Major League Baseball combined.”
Smathers & Branson has been on a bit of a tear in the decade since I first visited the Bowdoin graduates in 2008. Back then, they were crammed into a windowless basement beneath an auto repair shop in Bethesda, where they packaged whale belts, sailing key fobs, beer sleeves and dog collars that would fit right into a Ralph Lauren Polo ad.
Smathers & Branson isn’t Lauren, but Carter and co-owner Austin Branson have fathered a successful company with goods bought by luminaries such as the late, great Arnold Palmer, former presidents Bill Clinton and both George Bushes, as well as quarterback brothers Eli and Peyton Manning.
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I have seen the stuff on my travels, from the stately Gasparilla Inn on Florida’s Gulf Coast to the first floor of the lofty Bergdorf Goodman men’s clothing store in Manhattan (as I was escaping the rain one afternoon).
The White House gift shop is a gold mine for their company. They are also in local retailers Onward Reserve and Tuckernuck, both in Georgetown. More than 700 country clubs, including Pebble Beach and Chevy Chase, sell their accessories. The company has licensing deals with about 100 colleges and universities, including the U.S. Naval Academy and the U.S. Military Academy. The stuff sells well in the South.
Smathers & Branson is a company that rows against the current. It didn’t scale up and go for the quick kill. It launched a mail catalogue in the middle of the Amazon.com era. (Yes, it is on there; Amazon.com chief executive Jeffrey P. Bezos owns The Washington Post.) And this spring, it was about to open a bricks-and-mortar store in Georgetown until the rent exceeded what the parsimonious duo was willing to pay.
Carter (Deerfield Academy) and Branson (St. Albans), both 35 and BFFs, are most proud of the fact that they have built their little enterprise without taking on any investors.
They own it themselves, 50-50.
The two took to heart the advice from Bowdoin professors and friends: Do not sign away the company to investors.
They’ve never even taken a line of credit from the bank.
“We haven’t been about getting a valuation and raising money,” Carter said. “We have never authorized anyone to look at our books or look under the hood.”
I had a conference call with the young (to me, anyway) business executives last week as the retail entrepreneurs prepared for what they hoped would be a big bonanza for Father’s Day, one of their biggest times of year.
“We like the challenge to slowly and responsibly push the business forward,” said Branson, who lives in Washington. Carter lives in San Francisco. “That has been fun for us . . . taking a tiny, little niche of needlepoint and continually finding new avenues to grow the business.”
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The business has grown: It has moved out of the basement and down the street into an airy space once occupied by a shoe store.
It has been around since 2005, when it grossed $300,000. Revenue was $3 million by the time I had discovered the company in 2008. Now it is about $15 million and growing. (The pair are very private about profit, but I would estimate that they split more than a million bucks a year, and maybe a lot more.)
It had three full-time employees and a couple of interns from Georgetown in 2008. Now it has 30 full-timers.
Smathers & Branson had few, if any, major sports league licensing deals back then. Now, it has the National Hockey League, Major League Baseball and the National Football League, which signed a contract this spring. The company is working on the National Basketball Association.
One of the keys to growth has been the company’s nine-member sales team. The team has grown the number of retail outlets carrying its products from 1,800 two years ago to more than 2,000. The sales folks travel constantly, working industry trade shows and visiting retail outlets to “touch” customers and find new ones.
In 2008, they didn’t have a catalogue business. This year, they will mail 500,000 catalogues.
“We were both hesitant to get into the mail-order model,” Branson said. “But it has shocked us how productive it has been. We gathered all of our customers’ addresses for the past 10 years before we went for our first catalogue.”
About 70 percent of revenue comes from stores, country clubs, stadiums, college campuses and special events such as golf tournaments. About 30 percent is from online sales and from the catalogue.
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Smathers & Branson is in South Korea, Japan and Spain. And sells through Brooks Brothers and J. Crew.
Branson said that the company has worked hard to keep its incremental culture, making small steps, mindful of product quality, chipping away at winning clients one by one.
The employees putting the finishing touches on the Smathers & Branson products at the 7,000-square-foot Bethesda warehouse still wear shorts and flip-flops. The difference is that the flip-flops are made by Smathers & Branson.
Raw materials are shipped from around the world to Vietnam, where the products are stitched by a carefully selected team. Everything comes through Bethesda and is then shipped to the retailers or directly to customers.
Not everything has gone smoothly. One foray into contemporary designs over the traditional Americana didn’t work.
The expansion of the staff has freed up the founders to spend more time on strategy. One of their management rules is that they do not proceed without both agreeing on what they are about to do.
Tasks are shared. Both work in sales, both hire, both manage, and both oversee product design and licensing.
The best-selling belts are still $165. Hats are $35, key fobs $28.50, flasks $65 and wallets $115. A $165 belt isn’t exactly cheap to me, but Bergdorf Goodman stopped working with the company after the Fifth Avenue icon said that its products were priced too low.
It has expanded into hats, sunglass straps, luggage tags, money clips, can coolers, coasters, pillows, iPhone cases . . . you get the picture. The company is working on a new website and will introduce three needlepoint products later this year. There are always new licensing agreements under negotiation and collaborations in the offing.
“There is no ceiling, no reason to stop,” Branson said of the growth.
We will find out when the Cubs win their next World Series, I guess.
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