Faherty Brand: Alex and Mike Faherty. How Jersey Shore + Manhattan Chic grew to 80 stores.
Episode
73 min
Read time
2 min
Topics
Investing, Startups, Fundraising & VC
AI-Generated Summary
Key Takeaways
- ✓Pre-launch preparation: Mike spent eight years at Ralph Lauren mastering garment engineering while Alex worked finance to save capital and learn business fundamentals. They lived together, meeting monthly for two years just planning brand details before launching, proving patience beats rushing to market.
- ✓Multi-channel strategy: While 2013 investors pushed pure direct-to-consumer models, Faherty blended wholesale, retail, and online from day one. Wholesale provided factoring finance for inventory without burning venture capital. By year two, wholesale represented 75% of revenue, enabling survival on minimal outside investment while competitors burned millions.
- ✓Founder-led retail activation: Alex personally visited every initial Nordstrom location, repositioning merchandise and training salespeople on product stories. This hands-on approach converted store employees into brand advocates who drove sales daily. The tactic remains effective—he still rearranges displays during store visits to optimize product visibility and placement.
- ✓COVID expansion contrarian bet: When advisors recommended closing non-beach stores in 2020, Faherty instead signed 40 new leases over three years, securing long-term agreements at historically low rates with substantial tenant allowances. Landlords offered move-in-ready spaces from departing tenants, minimizing construction costs while competitors retreated.
- ✓Product engineering differentiation: Mike developed board shorts using 17% cotton with 83% recycled polyester—trial number six—creating quick-dry performance that felt like regular fabric, not typical synthetic board shorts. This material innovation, combined with luxury construction techniques from Ralph Lauren applied to surf aesthetics, created premium coastal wear at $250 price points.
What It Covers
Twin brothers Mike and Alex Faherty built a $250 million coastal fashion brand by spending twelve years preparing, rejecting direct-to-consumer orthodoxy for an all-channel approach, and aggressively expanding retail during COVID's uncertainty.
Key Questions Answered
- •Pre-launch preparation: Mike spent eight years at Ralph Lauren mastering garment engineering while Alex worked finance to save capital and learn business fundamentals. They lived together, meeting monthly for two years just planning brand details before launching, proving patience beats rushing to market.
- •Multi-channel strategy: While 2013 investors pushed pure direct-to-consumer models, Faherty blended wholesale, retail, and online from day one. Wholesale provided factoring finance for inventory without burning venture capital. By year two, wholesale represented 75% of revenue, enabling survival on minimal outside investment while competitors burned millions.
- •Founder-led retail activation: Alex personally visited every initial Nordstrom location, repositioning merchandise and training salespeople on product stories. This hands-on approach converted store employees into brand advocates who drove sales daily. The tactic remains effective—he still rearranges displays during store visits to optimize product visibility and placement.
- •COVID expansion contrarian bet: When advisors recommended closing non-beach stores in 2020, Faherty instead signed 40 new leases over three years, securing long-term agreements at historically low rates with substantial tenant allowances. Landlords offered move-in-ready spaces from departing tenants, minimizing construction costs while competitors retreated.
- •Product engineering differentiation: Mike developed board shorts using 17% cotton with 83% recycled polyester—trial number six—creating quick-dry performance that felt like regular fabric, not typical synthetic board shorts. This material innovation, combined with luxury construction techniques from Ralph Lauren applied to surf aesthetics, created premium coastal wear at $250 price points.
Notable Moment
After quitting finance, Alex ran out of money and returned to his investment firm for two months as a consultant while the brothers deflected factory payments for 120 days, maintaining positive energy with employees despite severe cash flow stress threatening the entire operation.
Episode Transcript
Wondery plus subscribers can listen to How I Built This early and ad free right now. Join Wondery plus in the Wondery app or on Apple Podcasts. Listening on Audible helps your imagination soar. Whether you listen to stories, motivation, expert advice, any genre you love, you can be inspired to imagine new worlds, new possibilities, new ways of thinking. Audible has an incredible selection with over 1,000,000 audiobooks, podcasts, and Audible originals all in one easy app. Find the genres you love and discover new ones. Explore best sellers, new releases, plus thousands of included audiobooks, podcasts, and originals that members can listen to all they want with more added all the time. Enjoy audible anytime while doing other things. Household chores, exercising, on the road, commuting, you name it. Audible makes it easy to be inspired and entertained as part of your everyday routine without needing to set aside extra time. There's more to imagine when you listen. Sign up for a free thirty day audible trial and your first audio book is free. Visit audible.com/built. I've stayed in awesome homes on Airbnb in places like Athens and Berlin and Rome. And each time these places have given our family a chance to feel like locals. It's the best way to travel. Picture this. You're spending a cozy evening out of town in a home you booked on Airbnb. The space is thoughtfully designed and you think, I bet I could host my own home on Airbnb. Your home might be worth more than you think. Find out how much at airbnb.com/host. If you run a small business, you know there's nothing small about it. Every day there's a new decision to make and even the smallest decisions feel massive. When all of these decisions feel daunting, it helps to have the right platform with all of the tools that you need to be successful. Shopify. Shopify's point of sale system is a unified command center for your retail business. It brings together in store and online operations across up to 1,000 locations. Get all the big stuff for your small business right with Shopify. Sign up for your $1 per month trial and start selling today at shopify.com/built. Go to shopify.com/built. Shopify.com/built. Did you have any fear about leaving Ralph Lauren to to start something? Sure. But I felt so comfortable when I could, like, take an original design concept, and I know I could see the finished garment. So like if I found an antique piece of fabric from a quilt right from the nineteen twenties, I could take that and visualize a cool shirt with these type of buttons and this type of wash and these type of seams and I just knew I could make it. And I'm like, if I can do it here, it's go time. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz. And on the …
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“Alex personally visited every initial Nordstrom location, repositioning merchandise and training salespeople on product stories.”
“Mike spent eight years at Ralph Lauren mastering garment engineering... luxury construction techniques from Ralph Lauren applied to surf aesthetics”
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