- Speaker #0
Welcome to this flight of the Retail Pilot. I'm Ken Pilot, former CEO and current brand advisor, investor, and board member. I'm thrilled to share with you some of the insights from retail's leaders and legends, as well as my perspective on retail today. This podcast is sponsored by the following. PredictSpring is a global point of sale platform live in 22 countries. The platform includes mobile POS, endless aisle, fulfillment, inventory management, and clienteling, creating a true omni-experience for customers and associates. BrickSpring Powers, Suit Supply, Converse, Lovesac, Decium, Janie & Jack, and Bouclair. I'm excited to welcome back Alex and Mike Faraday to the Retail Pilot. Alex is a co-founder and CEO at Faraday. Prior to starting at Faraday, Alex spent over a decade in investment banking and private equity, formerly a football player at Yale. Alex takes a coaching mentality in how he runs the business, knowing that so much of a brand's success is who makes up the team. Mike wrote his college essay about starting Faraday Brand, going on to major in fashion design at Washington University in St. Louis, before spending a decade in New York's fashion industry. His passion is sourcing high-quality fabrics from around the world and developing innovative new ones himself. Excited to welcome back. Alex and Mike Ferry to the podcast. Guys, good to see you.
- Speaker #1
Woo!
- Speaker #2
Yeah.
- Speaker #0
Yeah. That's what you guys got left after Thanksgiving, right? I know. Happy Cyber Monday.
- Speaker #1
Happy Cyber Monday.
- Speaker #0
Guys, have a good Thanksgiving. How was business over the holiday weekend? I mean, we've still got a big day left, but what's tracking?
- Speaker #2
Mike was in Charleston, South Carolina at our store there. So Mike, what was... Oh, wow.
- Speaker #1
Yeah. So Alex and I divided the two of our major stores. I was in Charleston. So I spent Wednesday for about four hours. I was at the store in the morning, you know, pretty consistent traffic. Charleston is one of those cities that actually it's the calmest time of the year is Wednesday and Thursday of Thanksgiving because everyone, college kids are away, no tourists. So it was quiet. And then I got to the store Friday. We opened at like 9 a.m. King Street was jamming. The store was jamming. We had a huge day. I love being in that store because Charleston draws from so many different places as a holiday destination. I think now what's happened is Black Friday is huge on that street. So it's almost like King Street becomes a destination where people from around the country actually come to Charleston just to shop on Black Friday. And then Saturday, they do a big small business Saturday and they close down one of the streets. They had Noah Kahan doing a concert at the concert venue right in there. So they kept people happy. and business was great. I think we did what we needed to do.
- Speaker #0
Were you top sales guy for the day? What were you pushing? What were you selling? What were you wearing? I mean, that must've made a difference.
- Speaker #1
No, I was wearing a Western shirt that no one would buy. I was just trying to get off the vibes. Gifting, tons of gifting. We had a big presentation of two of our big key items, like the legend shirt, the stretch terries. So those are kind of products that have become synonymous, I think, with our brand for guys and girls. So- people, you know, we were able to really be able to showcase them. You know, we have a bunch of like cool, fun hero sweaters, like Alex is wearing one of them now. So, you know, for more of the fashion forward people, we got some cool sweaters. And then yes, it was a mixed bag of tricks. Like I said, you get a really interesting crowd there. You get the local crowd, you get a Boston, New York, San Francisco families are all kind of coming there now.
- Speaker #0
I've been down to King street a few times and I love your store there. It's nice, big, spacious store, easy to shop. But King Street's got a great vibe. What good place to eat and drink? I mean, if you haven't been to King Street, like you haven't been south of
- Speaker #1
New York City. Yeah, I mean, it's like this clothing brand that we started, you know, basically between New York and Malibu. And our number one volume store is Charleston, South Carolina. You know, I think it shows something to like the power of that town. Wow.
- Speaker #0
That's cool. Mike, Alex, where were you over the Black Friday weekend?
- Speaker #2
I was down in Spring Lake, New Jersey, which is where I live. We have two businesses there. We have. the clothing store. And then we also opened up a market and a restaurant. So I was working between the two of those and town was jamming. The little town's really become a shopping destination. There's about 70 clothing, you know, shopping boutiques in the town and it was jamming. It felt like the busiest I've seen
- Speaker #1
Black Friday,
- Speaker #2
sorry, physical shopping that I've seen, you know, since we started the brand. I think all the pandemic stuff's behind us. I felt like people were really coming out. You had some cold weather, but it was dry. And It felt great. It definitely felt like great kickoff to holiday. And we didn't really do much in our stores. Most of our kind of our. deals that we had were online and it didn't stop people. People were just pumped to be out and about.
- Speaker #0
And with that, you said you did more business in stores than you did online in terms of percent increase over last year, which a little different than the trend that we're hearing out there over the holiday weekend.
- Speaker #2
Yeah, I would say that we've got, I think the benefit of, as Mike was saying, a couple of these key franchises that we've had really have become, you know, in a world that's very competitive, just some items that have like stood out. So I think that's been really helpful. We're in a really good inventory position in the right things this year. And we've definitely gotten smarter and more agile with how we get into stock at the right times of the year. So that felt really good going into. And I think we made sure that the stores had the right levels of inventory. And I think that's the learning of doing this for 11 years. And we had 13 stores before the pandemic. Now we have 72, just getting smarter every year about how deep you need to be going into the big seasons. and especially the big weekends. So you're not, you know, by the time you have a big Wednesday and a big Friday, you're not smoked on Saturday. And I think that's just us getting smarter and smarter with how we buy and allocate.
- Speaker #0
So as we get to the close of 2024, how would you guys summarize the year? Alex, why don't you just start, give us a high level of how Faraday is going to end the year, where you guys are in your growth trajectory.
- Speaker #2
Yeah. So I would say that 2024, just like the years before it has been crazy. You know, it's like the last four years has been every year is a different challenge, a different thing that you need to overcome and figure out. And so for us, we had a big e-commerce growth cycle that came out of the pandemic. And we sort of got ahead of whatever the slowdown e-commerce that would come post-pandemic and started opening up retail stores, you know, a dozen plus a year since 2021. And I think what we really wanted to go on in 24 was just to get really good at executing in retail. Because now it's become this year the largest percentage of our business. And I think that's really where I see the growth and the evolution for us is just when it comes to standards, visuals, allocation, teams, service, hospitality, just continue to take that step in a better direction. Store design. And I think the other thing we've done this year, we've started to open up bigger stores. You know, not kind of like the behemoths that you used to like opening up. You know,
- Speaker #1
we went from 1,800 to 2,600.
- Speaker #2
But for us, that's a meaningful increase. And it's been really fun to see that play itself out. And actually, some of our best stores are some of our newest stores, which has felt really good because you sort of think like you're going to get diminishing returns over time. But we were able to add some stores to the fleet this year that are going to be top 10, which really does help just move the needle in the right direction. I'd say e-commerce this year has been okay. It hasn't been amazing, but it's been okay. So we'll grow double digits this year. And that feels good on, I think, a much better understanding of how and why we want to grow. And I think we grew like 100% for a couple of years. And then now it's getting to a point where like Mike and I and the team, like we can understand how to manage the growth to the right inventory levels, to the right execution. And it makes sort of like us, as we think about the next three years, like just doing our thing. And people are like, you know, what's next for Ferry? It's like, we're just going to keep doing our thing. We're going to do it better. And we'll add some little things in like this year. was our year of some cool, interesting collaborations that we'd done kind of in a more meaningful way. We did something really cool with the Knicks earlier in the year and Jalen Brunson, the point guard for the Knicks. We did our first big sneaker collaboration with Saucony. We're starting to have a moment as a shoe brand. We did this really cool shoe with them. So just understanding how do we play in the cultural zeitgeist of what's going on while we continue to do our thing. And so it's been a challenging year, a lot of internal growth this year, and I think we're really set up. for success and Mike and I to keep doing this for the next 150 years, as long as we're alive.
- Speaker #0
So where will that put you end of year, roughly in terms of numbers? You got 72 stores, rough volume. I know you guys are privately held. So a range or a plus or minus or something, a bone you can throw out here.
- Speaker #2
Ken, we have 72 stores. We'll have 73 by the end of year. Our last store opening up is in Montecito in the Santa Barbara area. And I'm not going to throw you a bone, Ken, but we're doing hundreds of millions of now. And if feels great.
- Speaker #0
I like that. That's a bone. Hundreds of millions. Okay. So Mike, it sounds like you got a bigger playground. You got more room. Alex is finally building some bigger stores after I've had a lot of conversations with him and leaning on him to let you just go wild. What product is working in the stores and how are you looking at space or what's working really now? We'll talk about later, but what categories? You guys just launched really denim. This is the first full new year of-We did denim.
- Speaker #1
We have it. You know, the Stretch Terry Pant 1 was side-by-side with denim. So now we just introduced more washes in the Stretch Terry Indigo. So we've got three washes now, and now we've introduced like within Stretch Terry, like a yarn dyed element to it. So it has a little bit more of like a dressier look to it. So we've got these elements now of this hero product that now like can kind of hit you, hit a guy in many different ways and a woman in different ways. In women's we have, you know, men's we introduced more inseams. So in-store stocked up 30, 32, 34 inseams. So that opens up just like an ease of transaction versus a hemming or having to order off site. So that has been a huge increase. I think, and then in women's obviously having more silhouettes, having like a retro kick flare or a higher rise kind of silhouette. So having the more different varieties in a fabric that wins and people love, and then introducing more washes, more colors. So I think we have these elements of the store where it's like, all right. We want to keep this like boutique-y feel where it's a little bit more like found a couple different items kind of put together. But honestly, like it's hard to shop that way. And people are as pretty as it is. Like people are very distracted now and they're walking through a store and they're like on their phone. They're like, I don't know, they're talking to people on their earpieces. Like unless it's like a bullseye, like it's hard to get people to really, you know, 80% of people shopping to like focus. So I called Alex right after Friday and I was like, man, I was happy we comped out well. And then I was like, man, I can't wait till next year when we just continue to get better at helping the customer understand what should you buy? It's up to us to help them because we know our best stuff and they're going to love our best stuff too. So it's like, let's do the right version of hero products, easy to shop that are done in a cool, elegant way. So it keeps boutique-y feel, but really make it easier for the customer to shop and gift. We have a whole opportunity next year to really build in more gifting opportunities, more lower price point products at checkout. Between the socks, we do the cold weather accessory to do the ball caps. We do the cool totes. We do. So we have a lot of stuff. It's just sort of, we haven't really put it all together. So I think that's a huge opportunity going into next year. So again, left it being like, cool, good, good holiday. We'll do good this holiday. But like, man, we got so much opportunity next year to just make our customers experience way better when they're shopping.
- Speaker #0
I do love the fact. that when I shop your stores, there's a focus. I think you guys do a really good job curating and not just adding product for product's sake, but overstating, as you said, some of your hero product. I mean, whether it's the Slub Henleys or the hoodies or the Legend Plaid shirts, it's just there. It's just like right there. Like I need this. Like you're telling me as a customer what's important. And that makes me feel more confident in picking a product because You believe in it and it's making me believe in it too.
- Speaker #1
So we launched, you know, obviously like guys buy shirts and pants. And I think that's been another learning for us. Like we can mess around in every product category and make nice stuff in every product category. But at the end of the day, guys'wardrobes are loaded with shirts and pants. But that's our bread and butter, Ken. Like, you know, I came from, you know, being a shirt designer for Ralph. And then we got off with the pants early in our career. So I think like we know that that's our bread and butter. So I think obviously going into the future. Huge opportunity of men in shirts and pants and continue. So we introduced a new product called the Coastline shirt, which is sort of like if the legend shirt was an Oxford, what does that look like? And so it's a little bit lighter weight. It's more everyday weights, smaller scale patterns, button down collar. So it kind of looks like an Oxford really, but it's that soft, stretchy kind of like lightweight sweatshirt vibe you get from parody. So that's an item that we launched for the first time this fall. Haven't really talked about in a big way. It's sort of just there. So like going into next year, we know like. boom, we got another great item in the tank to really push through the next holiday season. So actually, in men's and women's, we have a big opportunity to just put some of our great stuff together in the store. So it's a little easier to like, oh, hey, that's a beautiful layering piece. Let's have the Henleys all stacked together. Or all of our novelty ski-inspired sweaters, put them all together because they're some of our best pieces versus spreading things out so much in the store. So we're all in on just making the customer's experience way better. And we'll keep building. And, you know, we got a year to get ready for next year.
- Speaker #0
If you guys are at, let's say, 85% of where you want to be as a men's brand, where would you say you are right now in your women's journey?
- Speaker #1
I like the 2025. You know, we've really only been in the game hardcore for like three years, you know? So we've been in the men's game 12 years. So we're making our way there. You know, we've got some great fabrics that are... And now some great fits in women's that we're getting really great responses to on the bottom side of things. So we got trust in bottoms and we'll continue to like build that as we create, you know, more of that. And I think we have great seasonal novelty products that you can't find anywhere else. Like really cool, kind of like modern American style. that, you know, you can't find it at a really high quality. So it ends up being a great price point, you know? So it's like, you know, it looks cool. It looks current, but it feels luxury. And so I think we have this interesting place in women's that we win. We have some great sweaters, like this holiday with some amazing sweaters with cool intarsions on them. And those are things that anyone who walks in, whether you're shopping luxury or you're shopping at a free people, you come and you're like, wow, that's very cool. And while, you know, it's not too expensive and the quality is amazing. So we have this like quality play in women's. that we'll continue to sell with also making sure we have current interesting styles. So I'd say 25-yard line, and we're making our way through it and we're learning, and we're continuing to build more of a visual identity around the women's brand. And so it keeps us, Joan, excited. But I think Alex and I, we want to make sure this feels like a men's brand. And so there's an interesting kind of ballet you got to play. Not a lot of brands have been able to do it because you either swing either way. So you lose your appeal to the more rugged guys and you don't feel feminine enough to women. So it's like, there's a ballet and a dance we have to play and continue to learn from, you know, things we try and things we do.
- Speaker #0
Sarah, a key collaboration that you're looking to do on the women's side. I mean, you guys have been so successful with collaborations, just getting that energy. What's happening on the women's side with collaborations?
- Speaker #1
We're getting started and gearing up for a big collaboration in Australia. I think Australia has got a really cool fashion scene going on right now, especially sort of like the beach. vibe, like elevated beach vibe. So it's like used to be all surf brands and now there's this cool contemporary thing going on in Australia, kind of out of the Byron Bay area and in Sydney and Melbourne. So we're cooking up a really cool kind of like countrywide collaboration with some really cool designers in the area. So that's something that I'm really looking forward to that's happening. So that's in the future, that's next two summers from now. But this summer, we've got this really cool kind of surf trip capsule. And it's a bunch of our own product, but we're collaborating with a really cool surf hotel in Central America and kind of around like a surf trip, a vibe, and some really cool kind of fun, bright product, really linen focused. You know, we have some of the best linen products in the women's game, you know, great washes, great colors, great hand feel. So that's gonna be really cool. We're going to really lean in on surf and the surf trip this summer.
- Speaker #0
What would you say this year, just some of the big marketing takeaways you guys would have, some wins or things that maybe you tried that were different, that were successful, that you'll take into the future?
- Speaker #1
Yeah. Continuing to be more editorial with our paper and our printed products that we do. Obviously, the catalog thing is crazy right now, Ken, as you know. Your mailbox is full to the brim and it's pissing you off now. So how do we change that up a little bit where you're not just getting another catalog? So I think continue to like elevate sort of the experience of editorial within the books that we send out. You know, so I think we did a good job of that. We're going to try next year actually doing a magazine where we can really sort of build in the editorial around the whole brand. All the things we're doing from product to travel to the people we connect with to, you know, our sustainability movement, B Corp. And so like you can kind of wrap up, you know, half a year of Faraday in a magazine. So we're really excited to get working on that for next summer. So I think that's from a paper perspective. And then I think continuing to get better at video and focus on cool video assets that can kind of push through the noise, if you will, that are kind of beautiful and interesting. And then I think some other things, wins we've had is just like short format, choppy stuff around product launches. And we do this thing called behind the scenes where we talk about the details behind the things we make and give some history behind them. And so I think we introduced a styling series. So some of that stuff just... different interesting ways of content to the consumer. So a mix of beautiful, but taking editorial and magazine in a cool way. So it's really for our core customers who really love the things we're doing. And then on the other side of it, quicker, funnier, quippier, more things that can kind of show people what we're up to.
- Speaker #0
I'm curious, Alex, do you guys see a lot of action off of Instagram customers buying directly from Instagram or Reels? You mentioned video, Mike. I'm just wondering if Instagram is doing for you what it seems to be doing more and more for others. Is that becoming a more important source of marketing for the brand?
- Speaker #1
You know,
- Speaker #2
Instagram kind of like three years ago started becoming the winner between the meta of the meta platforms. So Instagram's big. The algorithm seems to work really well as far as, you know, efficiency goes. So yeah, I mean. We're all over Reels, we're all over Instagram, we're all over Stories. I would say for us, it's still our largest platform. TikTok's coming up a little bit. Facebook's losing its core. Facebook's losing its luster. But honestly, I think social media is still a great way to get in front of people. But the name of the game really, as we move to this next evolution of our brand, is how do you just get buzz without spending money for it? So that's obviously where some of these collaborations and partnerships are helpful and word of mouth's helpful and opening up stores is helpful. you know, all these different things where we don't need to rely on the performance marketing channels like we used to in such a meaningful way, which just feels good. It's an important evolution as a brand.
- Speaker #0
I mean, you guys have so many touch points, stores, you have wholesale distribution online. It really gives the customer a chance to interact with product almost wherever they are and physically interact, not just digitally.
- Speaker #2
Yeah. So just exactly. So, you know, the need to spend money on marketing, if you're going to do it. make sure that it really stands out and resonates with the consumer. And so when it comes to females and women shoppers, Instagram is very, very important from a styling perspective. Men, it's less important. So I think for men, how do you reach men in a meaningful way that really resonates with them? It's different than women. So as Mike was saying, a lot of what we have to figure out internally and what we're doing is how you find the right campaigns for men, the right campaigns for women, that things are going to hit your core female base, but it's different. So we have to be very distinct with how we approach each of those channels.
- Speaker #0
What else was important to you, Alex, from a tech perspective? You and I have done a lot of tech talk in the past, but what's moving the needle on the tech side for Faraday?
- Speaker #2
Simplifying. So I think simplifying the tech is moving the needle. I think just making sure that, you know, a lot of the last couple of years is making sure like the core operating system of the connections between the ERP and Shopify and your OMS is all tight. And for us, obviously, as we've moved to more stores, making sure that the Omni shopping experiences are super tight. So we've been with new store for the last three years, fulfilled from store, you know, endless aisle, making sure that those things are super tight has been really important. I think online, the big unlocks have been what we're really trying to unlock is like, what are the conversion rate optimization? You know, there's been so much money spent into consumer e-commerce tech, like what's really going to move the needle. So I think for us spending a lot more time on that. conversion rate optimization, where are people spending time on the site, what's converting the highest, how are we moving things around through a merchandising perspective using both AI and just human analysis. So that combination every day is really, really important. So as you know, we test a little bit of everything. So I couldn't even, all the different things that we've moved in. I think one that we are excited about, which a lot of other retailers use that we just launched was this Stylitics, which is helping us kind of complete the look. in a more impactful way so that we can really drive that AOV and that conversion. So conversion is the name of it. You know, I think it was for years, it was traffic, traffic, traffic, and now it's conversion, conversion, conversion. And how do we keep getting better at that? And as Mike said, we as merchants, I think have to continue to grow up and evolve. Like when it comes to the right time of year, what are the right items that convert? And so as now that we're becoming more of a gift giving destination, I think that's the big thing for us internally as our team. is how do we win during the gifting seasons and how do we put together a really good assortment that's not just kind of like the core apparel assortment that we were talking about, but also these gifting items that can really move the needle.
- Speaker #0
You mentioned your team, and I'd love to talk a little bit more about your team. How do you keep this energy, this family-operated business alive, keep attracting new talent and making Faraday a fun place to work?
- Speaker #1
I think from my perspective is how do we keep the team as small as possible and still be able to do the things we want to do? So I think that's something really important to us. Keep it tight, lean, you know, team. So we're all in it together. You know, I think once you start pushing paper around and passing things, playing hot potato, you start losing what Faraday is. And Faraday is something where we're all in together, jamming and waking up every day, you know, as passionate as we were. 10 years ago or five years ago or two years ago and really having that sort of day one mentality forever. So we're very focused there. And then I think it's like, you know, you know us, like we like to have a good time. We're positive people. You know, we're always looking to mess around with things, try it new. So like be innovative, like find people who are like innovative thinkers and just want to like never satisfied. You know, that's something that's like so innate. So it's like the mix between like the power of positivity and having this innovative mindset. So it's really about finding the right people and then helping give them the keys. If it's a promotion within and realizing like, you know what, they can do this themselves and they can really kind of garner the support they need. And so I think we look at it from like, it's really like mojo and vibes for us with the people we work with. Obviously you got to be razor sharp, but that's so important. So Ken, keep the team tight, keep the team really connected. and really close together, trusting each other, working together closely, breaking down all the walls that you've experienced in big retail, where it's like, I don't know, he does that. That mentality, or they do that. Whereas we do this. We all are accountable to every part of this business. So that's huge. So keep the team tight. So we realize we can keep our core team at headquarters about this size for a long time. and we don't have to go on hiring sprees and this, that, and the other thing. And then from a retail perspective, really, really focus on amazing store leaders that run their stores like they're their own. Really, like I was saying, that's sort of entrepreneurial mindset. And they feel the pride every day when they walk into a Faraday store and they're connected to us and we stay connected with them. And as you see, Alex and I are going to be at all these stores, hanging out with our team. So yeah, that's sort of the learning lesson, Ken, is like... You remember it was, everyone was like, how many employees you got? And that was like your success rate, you know, or how big is your top line? You know, and that's so different now. It's like, we're like, fuck, how small can the team be? And, you know, keep the top line clean and healthy, you know what I mean? So that's kind of where we're at.
- Speaker #0
And I love how you guys are in stores. I mean, you follow LinkedIn and there's Alex's in this store, Mike's in that story, right? Your warehouse. You guys spend a lot of time across the organization. Mike, how many, Alex, I guess you're both in stores. a hell of a lot.
- Speaker #1
Yeah. Alex, he's the born sales guy. So he's the one who loves to be in store. So Alex is probably on the road almost like a half of the year hanging out with stores. And, you know, and I'm kind of the one, you know, making the sausage in the back of the kitchen, you know, and then big events, I'll get out there and mix it up. Yeah.
- Speaker #2
The number one day of the year. That's when Mike MF shows up. Yeah.
- Speaker #0
That's what Mike turns out. Well, you got to save it. Got to save it, Mike. You know, you're the special guy behind the scenes. You're wrong.
- Speaker #2
I think with Jurassic, I get so much out of, you know, spend a couple hours in the store. And, you know, I say this all the time. I was the first charity store manager. So I get it. I know what goes into it. I know what you need to look for. You know, I live and breathe the product every day and the selling every day. So I get a lot of good tidbits in every visit that can help the fleet, that can help our decision making. And I think Mike and I are definitely guys who, when you start with one store and one product and you start from scratch, you have, I think we have a... big appreciation for like the micro within the macro. So every single little product decision multiplies itself in a meaningful way. So getting each of those decisions to be the right decisions, I think instilling that attitude into our teams. So they know, I mean, when I'm done with a store visit, like the list of things that I have written down and the notes I have are usually numerous. And they're all just like, how do we take that feedback for the next one, for the next one, for the next one to make it that much better. And then just being with the teams and I think it goes a long way when even a seasonal store associate meets me and gets to connect with me for five minutes and they then tell a customer that they met me. And, you know, one advantage is we have in this world of competition and so many people selling clothes is Mike and I are real people and this is our brand and this is what we love. And how do we put that energy and passion, you know, to the world?
- Speaker #0
Well, it's always fun to see you pop up in a store and I'm sure you've helped more customers than you can count. And. probably freak them out at the same time. It's like, you know, this is their brand. Wait, what?
- Speaker #1
I just never feel that way.
- Speaker #2
I feel like I'm just, you know, like it's day, it was day one, you know, 11 years ago at our little Thompson street store,
- Speaker #1
you know,
- Speaker #2
selling a shirt to somebody who never heard of the brand. And the feeling never wears off. Like I'm in there, I'm straight in the pants. I'm finding, you know, 33, 32 in seams for people in the stacks. And it's like, you know, it's kind of my happy place where everything, you know, it's just like game time.
- Speaker #0
It's great. Hey, as we go into 2025, We've got this new administration thing that's happening, the Trump, the presidency, etc. All this talk about all this concern about tariffs. How are you guys thinking about the impact or the potential impact of the tariffs?
- Speaker #2
Well, I think we're just going to assume that it's not a potential, that it's a reality. And, you know, building the budget and the business plan to account for what's to come. Obviously, we're really diverse as far as where we source from and where our partners are. So some of that's moving some things around, but, you know, we'll still continue to do some business in China. There's some amazing factories and amazing people that are making amazing things and we'll just have to manage, you know, manage that cost structure. But, you know, we went through this in 2019 and we scrambled and we figured it out. And so I think it's just going to what I said is like 24 was crazy. 23 was crazy. 25 is going to be crazy. This business is just always crazy. And it's just about being agile and knowing that, like, it's not the end of the world. We'll figure it out. We'll pivot. We'll be agile. And as long as we make great product that people love and we give a great experience, like, you know, everything's going to work itself out.
- Speaker #0
Do you think as far as you guys do some of the de minimis or take advantage of the de minimis rules out of Mexico? I mean, that could be a 25% increase in tariffs could be pretty significant there. What would that do to your strategy as far as bringing in goods to Mexico?
- Speaker #1
We don't bring in goods to Mexico anymore. So that we stopped doing that. So it's not.
- Speaker #0
There you have it. You're ahead of that game.
- Speaker #2
Yeah.
- Speaker #1
We were like early to that game. And then we were like, then we were like, okay, see ya. And now we're doing everything out of Columbus. Everything's coming into Columbus.
- Speaker #0
Alex, what are you most excited about for 2025? If you had to pick up top two, top three things that are most exciting about this coming year, what would they be?
- Speaker #1
I am really excited about. So 2025 being, I have like, it's going to be our best year we've ever had. So I think a lot of positivity, momentum, excitement. And I think that's coming from, as we said, like a retail store business has been awesome. And I'm really excited about us continue to show up to the customer in physical retail, just in a better way and really winning hearts and minds through what we're doing in stores. Because I think that's an area that we can bring the passion of the brand and the story to life in a big way. So. Physical retail is something I'm really excited about.
- Speaker #0
How many more stores?
- Speaker #1
We have another eight stores for next year. And so that's everyone. I would say the second thing is I feel really good about, you know, when it comes to inventory and our understanding of how much inventory we need to run a successful, profitable, great brand, that less is more. And we're now going into this next kind of evolution of the brand where. you know, Faraday to a lot of consumers is seen as luxury. We're not a luxury brand, but our price point's premium. So I think we really want to show up to the customer in a way that like every single touch point with the brand feels special. And so as we've gotten bigger, like how do we feel smaller? So I think what you're going to see with our brand is like, we're going to keep looking less like some of the mainstream American brands and more like Faraday and just owning and breathing that. And so that's exciting to us that we've gotten to this point now that we've made it. and we're confident in the future of the brand. So there's just going to be more of doing it our way and not maybe the way everyone else is doing it.
- Speaker #0
Mike, what's got you pumped?
- Speaker #2
We're moving into a new headquarters in a couple of weeks and we're going to have a little mock store in the space. So I'm excited about that to really be able to like play every, you know, not every day, but you know how I operate, play most days with product presentation, product placement, signage, weight finding, like all these things that... Got like a little tricky with all the stores we opened to really like build a big, good process around it. So like really get into that. So I think kind of hopping on what AF said, like do you make the experience for our customers in store more interesting, more exciting? Let the product kind of breathe better and showcase itself better. So that's super exciting. And I think the other thing would be, you know, we've got some people who've been around a good amount of time, but a lot of people helping us run this thing are new and they'll have a full, you know, really they've had this. you know, stretch of time to get ready for next year, but kind of coming in with, you know, some new leaders and, you know, some people we've promoted from within who've been with us. And so it's kind of like a new season, Ken, you know, it's like we sort of, you know, whatever, as the player coaches here, we got the squad ready to go and just excited to see how everyone's going to take a big step forward within our organization. And, you know, even me as a leader, how I can continue to improve and see things better, see things faster, see things further ahead. And so, yeah, just an exciting year of growth. I think realizing that our growth now is really good, clean growth. And it's not about, you know, just growing top line. It's about growing just the heart and soul of the brand.
- Speaker #0
Collaborations you can share with us or tease us?
- Speaker #2
Yes. We have one of the coolest things. We have two really cool things coming up. So this summer, we're launching a collaboration with an amazing surf club in Ghana. It's a small surf club from a town called Busua. And it really is like the first really cool, like homegrown surf club on the Northern Ghana coast. And we went out there, met team, a bunch of kids from the age of like eight to 20, and they're learning how to become rippers. And there's an amazing group of people helping them. And so we designed their uniforms for the club. And so they could start going to be able to compete around Africa. And I think now that surfing is a part of the Olympics, it's really changed just like. For example, in this small town in Ghana, the elders were surfing, what a waste of time. And then all of a sudden now it's an Olympic sport and now it's like, wow, this is cool. This has a chance that Ghana could be in the Olympics in surfing in eight years. So really cool uniforms. We were able to just get in the spirit of these awesome Ghanaian people. We went there and shot a stick campaign there. So that's coming out this summer. And then we've got a really cool collaboration in Portugal coming out with. some big wave surfers in Nazaré, Garrett McNamara, 100 Foot Wave, the TV show, plus a bunch of amazing makers and craftspeople in Portugal who are making just sick. product. So I got to spend some time with the mill and the factories there. And so that's coming out in the fall, which will be awesome.
- Speaker #0
Cool. A lot of good stuff. All right, guys, let's conclude this with rapid fire. New answers this time. I remember the last one. So current favorite streamed show. And the last time, just to remind you, it was Ausha because that was mine. So I need new material, guys. Mike, you got something for us?
- Speaker #2
Yeah, we're watching The Diplomat.
- Speaker #0
Love that. Favorite holiday tradition?
- Speaker #1
Yeah, my favorite holiday tradition. is we have this tree lighting in our town and we host the party on the second floor of our store and we did it on Saturday and it was awesome.
- Speaker #0
All right, Mike, what would you say was the brand that caught your attention in 2024?
- Speaker #2
The mill, the composting machine. It is so cool. Basically, you take all your compost, it dehydrates it and like disintegrates it. So basically you take like weeks of food scraps and it disintegrates it into like... this much. And it's an amazing product. So I'm loving that. As the garbage guy at our house, I love it.
- Speaker #0
Alex, you got a point of view on that one?
- Speaker #1
Mine has been Mela, watermelon water. M-E-L-A, watermelon water. It's amazing. All right.
- Speaker #0
Last question. Mike, this one's for you. What's the one collaboration you want to land most?
- Speaker #2
I need another sneaker collaboration. So if there's anyone in the sneaker world out there. Man, they're all so hot.
- Speaker #0
I mean, these guys between Hoka and On. I mean, you ready to do a Hoka collab?
- Speaker #1
Well,
- Speaker #2
I'm ready. I'm ready.
- Speaker #0
All right.
- Speaker #2
I'm going to reach out to everyone who's listening. We blew out of our Saucony collab in minutes. So if you want a great customer base to work with.
- Speaker #0
With that, we'll land this flight of the Retail Pilot. Alex and Mike Faraday, thanks for joining me. Appreciate it. Thanks for tuning in to this week's flight of the Retail Pilot. And please give us a review on your favorite podcast platform.
