Italic Luxury without Label
For the past decade, direct-to-consumer (DTC) pioneers such as Warby Parker (eyewear) and Casper (mattress) started one of the most compelling new trends in fashion: selling specific goods directly from the manufacturers and bypassing the middleman to keep prices low. This new wave in retail has a major Los Angeles player, Italic, a “brandless luxury” DTC company that just launched its beauty line this fall.
Italic has been selling everything from handbags to leather jackets and fancy sheets, all 50 to 80 percent less than that of similar luxury goods. Since its debut in 2018, Italic has septupled from 80 to more than 500 items, with newly added categories such as jewelry, luggage, cookware, and pet products. The staff grew from 21 to over 50 full-time employees. And they moved from a small WeWork office to a new 6,700-square-foot warehouse office in downtown LA’s arts district. Like Costco, an inspiration for Italic– the company seeks to grow its customer base with an annual $60 membership fee. But unlike Costco, membership is not required to shop its goods– though members get to enjoy a $120 Italic shopping credit, disbursed every three months in $30 credits.
“We’re not replacing designer brands in any category,” says Jeremy Cai, 28, the CEO/Founder of Italic. “We’re simply offering another option for shoppers, so that they can buy the luxury items they love straight from the source for much less.”
Cai works directly with more than 60 manufacturers worldwide. This allows consumers to buy directly from the producers for luxury names such as Prada, Gucci, and Cartier– without paying for brand markups and marketing. Cai grew up in Chicago, where his parents owned a manufacturing business that supplied auto parts to BMW, Tesla, and Nissan. With these connections, he and his team visited over 100 factories in Italy and China before choosing the ideal manufacturers based on their expertise, criteria of work conditions, sustainability, and certifications. To avoid copyright infringement, Cai said that all the designs created for Italic are exclusive to his company and they have not previously been produced by the factories for any other brands.
Cai said the home department and athleisure wear had sharp increases during the pandemic, prompting them to expand these two categories. They are optimistic customers will return once they see the huge savings Italic offers. For example, a cashmere throw at Italic costs $145; the same manufacturer supplies Burberry, where it costs $590. Italic’s olivewood salad bowl sells for $50; William Sonoma’s bowl, made by the same manufacturer, sells for $150.
We speak to Cai about the growth of his company, the challenges he overcame, and his ultimate goals for Italic.
How are you marketing Italic? How do most of your clients hear about you?
JC: One of the great things about Italic is we receive a lot of great word-of-mouth from our customers, which really drives new customers to our site. We’re also continuing to build up our marketing and social outreach, and we’ve seen great results from that. But as a growing company we want to do that smartly and strategically.
What were some of your toughest challenges in building your company thus far?
JC: One of the biggest challenges you face as a founder comes early on, as you think the only thing that matters is the product. Later on, you think the only thing that matters is marketing and distribution.
Eventually, you realize that culture is what matters most. It’s not just a set of values you write down, but rather an operating model that’s codified and shaped mostly by the people you bring into the company. This realization was the breakthrough moment that shaped how I work and its culture (not product or marketing) that not only makes or breaks a business, but also makes or breaks your happiness and satisfaction with your work.
Were you greatly affected by the supply chain crisis during the pandemic? If so, has this increased the cost for your merchandise?
JC: I believe everyone has been impacted in some way by the supply chain disruption. We’ve mostly seen this in the timing of receiving goods into our warehouses, but we were able to adjust our timelines fairly quickly to avoid any major issues.
In terms of cost we have not seen an increase and this is due to two reasons. First, we have a great relationship with our manufacturing partners. This has allowed us to work more closely with them on making sure the materials we’re using are still high quality but making sure we’re sourcing them efficiently. Second, we’ve seen increased growth with our customers, and we’ve been able to proactively place larger orders with manufacturers, which in turn has not led to increased costs for our merchandise.
What have you learned about the world of fashion since building your company?
JC: The more I’ve learned about fashion, the more I have come to realize that it is a complex and ever-evolving system of data driven merchandising. But also, that materials and craftsmanship define quality. If there is an absence of high quality, the price truly is meaningless.
What are some top-selling women’s items? And the most popular men’s items?
JC: We’ve seen that as Italic grows there’s been a great variety in what people are interested in and are being purchased. Right now, some of our hottest items include: Cadence Leather Sneakers and our sunglasses. For women, it’s the Seamless Underwear, Cotton Boxy Cropped Tee, and our Sarah Silk V-Neck Dress. The men’s top sellers are: Midweight Hoodie Sweatshirt, Midweight Sweatpants and Stride Athletic Shorts
When you’re not working, what do you do for fun?
JC: When I’m away from work I enjoy spending time with friends and family. And the perfect weekend would be a mix of that along with playing tennis and fishing, and of course playing video games. It’s the perfect way for me to recharge while having fun.
What’s your main goal for Italic?
JC: At Italic we believe people are happier, healthier, and more fulfilled when they can afford to live well. And with this as a goal we believe it’s our mission to source, develop, and curate the highest quality products at the lowest prices.
