Five years ago, Michael Preysman swore that his online clothing company, Everlane, would never have a bricks-and-mortar store.
“We are going to shut the company down before we go to physical retail,” he told the New York Times.
He doubled down on that pledge in March, telling Quartz he couldn’t think of any apparel stores that offer “a great experience.”
Now, it seems, his view on that has, well, evolved.
Everlane, the socially minded brand Preysman founded six years ago, is opening its first store, in New York, Dec. 2. The flagship, on Prince Street, will carry many of the company’s best sellers, including T-shirts, cashmere, denim and shoes. A second store, in San Francisco’s Mission District, will open in February. And although the stores will be relatively small — 2,000 square feet in New York, 3,000 square feet in San Francisco — Preysman says they will allow the company to reach new shoppers and interact more closely with existing ones.
“Our customers tell us all the time that they want to touch a product before they buy it,” Preysman said. “We realized we need to have stores if we’re going to grow on a national and global scale.”
There were other reasons, too, he said: It turns out that even people who buy online prefer to return or exchange items in person.
Everlane, which Preysman founded at 25, is the latest online darling to set up physical locations. Warby Parker, the popular eyeglasses retailer, opened its first retail shop in New York in 2013. Today, it has more than 60 stores across the United States and Canada. Bonobos, the men’s retailer that was bought by Walmart this year for $310 million, has expanded offline in recent years, as have shoe company M. Gemi and clothing brand Cuyana.
The trend underscores how quickly attitudes about technology can shift among retailers. Not long ago, some thought of bricks-and-mortar stores as vestiges of the past that add to operating expenses. But they also prove important in attracting new customers and fulfilling online orders. Even Amazon.com made its way into the bricks-and-mortar business this year with its $13.7 billion purchase of Whole Foods Market. (Amazon chief executive Jeffrey P. Bezos owns The Washington Post.)
“After you’ve gotten all the low-hanging fruit — customers who are willing to buy online or who follow your brand on social media — how else do you get people to buy your items?” said Sucharita Mulpuru, a retail analyst for market research firm Forrester. “That’s where having a physical footprint can make an impact.”
And, she added, the conditions for opening small-format physical locations have improved in recent years, as shopping centers look to fill vacancies. Given the widespread closures around the country — more than 7,000 stores have shuttered so far this year — landlords and shopping centers are more willing to forge flexible arrangements, including monthly or yearly leases, with niche brands.
“There’s been a real shakeout in shopping centers and malls,” she said. “It used to be that leases were 20 years long, but now we’re seeing an environment where a lot of these digital-first retailers can comfortably move into physical locations.”
Preysman, who has degrees in computer engineering and economics, started Everlane in 2011 with just one product: a $15 T-shirt that came in black, white and pink.
He found a Los Angeles factory that would manufacture 1,200 T-shirts for $7.50 apiece and sold them for $15. He was upfront with customers about his costs, as well as exactly where the money was going. “Radical transparency,” he called it.
“There’s a lot of — for lack of a better word — lying in the retail industry,” he said. “Why is this shirt 40 percent off and this other one 10 percent off? You don’t know where things are made or how they’re made or what the actual costs are.”
After a successful run with T-shirts, Everlane started selling $35 ties — less a strategic decision than a matter of having found a factory in New York that could manufacture them under favorable conditions, Preysman said. After that, he added sweatshirts and backpacks. Back then, he says, it never crossed his mind to sell anywhere but on the Internet.
“There was this belief back then that the online experience was far superior to the physical one,” Preysman said. “But as we’ve grown, our brand has become about more than just our products. We’ve created a community.”
Today, the company offers more than 500 products manufactured by about two dozen factories. Each one has been vetted through a year-long process that includes interviews, background checks and unannounced visits. The factories must pay fair wages, offer reasonable working hours and make environmentally friendly decisions. On its website, Everlane tells customers where each item has been made and offers behind-the-scenes photos and videos of each factory.
The company expects annual sales to double this year. And although Preysman preaches “radical transparency,” he declined to provide revenue figures or say whether the company, which is privately held, was profitable.
Over the years, Preysman has also taken a staunchly anti-promotional approach, avoiding the culture of discounts that has permeated the retail industry. When Everlane has too much of a certain item — a shirt, perhaps, or a pair of shoes — Preysman allows customers to decide how much they pay. A cotton tank top originally priced $18, for example, was recently being offered on the company’s site for $13, $15 or $17. (Paying the maximum amount, the website noted, contributes to “development, shipping and overhead and allows us to work on creating new products.” About 12 percent of shoppers pay more than the minimum price, Preysman said.)
“If you train your customers to expect sales all the time, they’ll take it,” he said. “If you tell them, ‘This is the way it works, and here’s why,’ they’ll adapt.”
Preysman is, at times, extreme in his approach. Early on, he shut down the Everlane website on Black Friday, the day after Thanksgiving that has grown to become synonymous with rock-bottom prices and sweeping discounts.
“I just said, ‘We don’t run sales, so we’re not going to participate in this,’ ” he said. He has eased up in recent years and now donates the day’s profits to factory workers.
“We are always trying new things: Can we push this further?” he said. “How much can we ask of our customers?”
Preysman has spent the past two years experimenting with different types of formats — pop-ups, “open houses” and, most recently, a six-week “pop-in” at Nordstrom stores — to find the right approach for Everlane stores. One concept, called Shoe Park, required customers to take off their shoes at the door. Once barefoot, shoppers were allowed access to a plant-filled showroom in New York’s SoHo neighborhood lined from wall to wall in pairs of Italian-made shoes in every size. Shoppers were encouraged to try on a pair while they grabbed coffee or sipped a cocktail. It turned out to be fun, Preysman said, but not very practical.
“We turned it into such a playground that at the end of the month, we ended up with all sorts of damaged shoes,” he said. “It wouldn’t have been economical long-term.”
Last winter’s “Cashmere Cabin,” a six-week pop-up in New York’s West Village, allowed shoppers to browse sweaters while they drank mulled wine and hot chocolate. Cozy and enjoyable, sure. But a long-term business model? No.
Others experiments, which the company called open houses, were built around Everlane’s mission to be as transparent as possible. Evening events showed customers where products were sourced and how they were made but didn’t offer many items for sale. That didn’t work, either, Preysman said.
“That just confused everybody,” he said. “We learned that while people want experiences, they also want to shop. It’s got to be a mix of both community and commerce.”
Executives at Nordstrom — which stocked some of its stores with Everlane items for six weeks this fall — said customers had responded favorably to the pairing.
“Our recent partnership with Everlane has been our most successful pop-in concept to date,” Blake Nordstrom, the company’s co-president, said in a recent earnings call. “Our pop-in shops give customers access to highly sought-after brands like Warby Parker and Goop.”
When Everlane’s first store opens this week, it will sell clothing and shoes but also facilitate talks, workshops and performances. Preysman plans to invite local chefs to host intimate family-style dinners and says he will offer classes on a variety of topics, such as meditation.
“If people are going to go somewhere, it’s because they want a connection,” he said. “If they’re just going to shop, they can do that online.”
Correction: An earlier version of this story incorrectly stated that Everlane would be opening stores in New York and San Francisco on Dec. 2. The opening of the San Francisco location has been delayed until February.