Up-and-Coming Retailers: Brooklyn Industries

By Lisa Caccioppoli  JAN 15, 2010 7:55 AM

Is this hip and forward-thinking clothing company the next Urban Outfitters?


Its first product ever back in 1998 was a hand-sewn messenger bag made from recycled billboard vinyl. The company has come a long way since then, geographically defying its name if not its philosophy.

Brooklyn Industries is a retailer of ultra-hip men’s and women’s lifestyle clothing and accessories that opened its first store in Williamsburg, Brooklyn, in 2001. The company -- founded by Lexy Funk, a New York native who grew up in London and Switzerland, and her Turkish-born husband Vahap Avsar -- has retained its commitment to ecology, even as it’s grown to include 12 stores in three states and a successful e-commerce website. It features many items made from organic fabric, T-shirt remnants, and fabric scraps, and declares through stickers in its store windows that its stores are powered by wind.

In fact, its most recent store launch in New York’s Grand Central Terminal included an “upcycling party” where guests had the opportunity to win eco-friendly books and clothing, and learn (on the off-chance they didn’t already know) that the term “upcycling” refers to the act of creating useful products from waste materials. The design of the store itself supports Brooklyn Industries’ dedication to sustainability: Its fixtures are made from repurposed wooden pallets; antique bookshelves, cabinets, and tables are used to display merchandise.

Funk -- Brooklyn Industries’ CEO -- holds no degree in business. She graduated from Wesleyan University in Connecticut with a degree in Art and Intellectual History. After college, she pursued her art career in New York City, participating in many gallery and museum shows there and in Europe, and attending the prestigious Whitney Independent Studio Program in New York. To support herself and her extensive travels overseas, she worked as a professional photographer.

But just as the company begins to prove the fact that its founders are forward-thinking artists-turned-entrepreneurs dedicated to the local economy, it also acknowledges that it outsources some of its manufacturing to (gasp) China. Conflicting philosophies? Nope.

Funk told BusinessWeek that she has a very different approach to the concept of “Made in China” than do many of her customers -- or for that matter, BI’s staunch boycotters, one of which who commented on Brownstoner.com that only “idiots” buy $30 T-shirts made in China when they can get them for $10 at Old Navy (GPS).

Ouch. But Funk is not the least bit clandestine with regards to the origin of some of BI’s merchandise. She says, “About a third of our clothing at Brooklyn Industries is made in China by four factories run by families whom we have done business with for more than half a decade.”

This didn’t happen overnight. Funk tells BusinessWeek that, after realizing the company would get much further if it focused on retailing rather than manufacturing, she spent a lengthy amount of time reading reports about China and uncovering information about labor disputes, human-rights abuses, and wage inequities before she ever pursued a relationship with any Chinese factory.

In 2002, a Japanese company took her partner to Hong Kong and Shanghai, where he was impressed with employees wearing slippers and working in well-lit, well-run factories with clean floors. Funk’s view “began to change from antagonism and skepticism to partnership and learning.”

It’s that spirit of learning through life experience, investigation, and instinct that’s helped Funk navigate each stage of the business. She’s built an anti-bureaucratic culture around a very simple mantra: Live. Work. Create.

“Brooklyn Industries was born from a need to be artistic and be commercial,” Funk states. “Directly making products for our store and our customers allows us great freedom, and an ability to speak directly of philosophy of concept and of community while being highly entrepreneurial.” And care for the community, Funk does. She frequently has T-shirts designed around an idea, and then donates the proceeds back to the local organization that’s fighting for those issues. Her hope is that BI’s customers, by donning the product, will keep the conversation going so that the partnership between product and consumer becomes prolific.

Case in point: Brooklyn Industries just recently introduced a new T-shirt featuring a dinosaur about to chow down on a carrot. The project was done in collaboration with Just Food -- a group that connects local farms and sustainably grown food to NYC neighborhoods and communities. Brooklyn Industries will donate 20% of the proceeds from T-shirt sales to the organization.

Other than its line of branded T-shirts and “neighbor-hoodies,” however, pride is implied -- it’s not communicated with logo-laden sweaters, pants, dresses, bags, and purses. This seems to be in direct contrast to companies like Aeropostale (ARO) and American Eagle (AEO), whose clothing is marketed (and ultimately successful) because of the presence of company logos.

But those retailers aren’t really the company’s competitors anyway.

Brooklyn Industries’ wares are more comparable to those of American Apparel (APP) and Urban Outfitters (URBN), both of which cater to a modish youth. The former is the largest clothing manufacturer in the US; the latter operates more than 140 locations both nationally and internationally, and owns five retail brands in total.

Though both American Apparel and Brooklyn Industries specialize in T-shirts and focus heavily on positive working environments, Funk has resisted the comparison to it, as well as to alternative-clothing retailer Urban Outfitters.

In 2006, her broker, Simon Dallimore said "American Apparel is the Gap to me," suggesting that BI’s products move beyond those of the popular retail chain. Urban Outfitters isn't really a match either, he argued. The Urban Outfitters shopper is typically younger and may patronize BI stores, but the reverse isn’t true.

But David Rosenberg, executive vice president at Robert K. Futterman & Associates sees space for both and room for comparison. Both, he says, cater to “the hip, the cool, the sophisticated” market.

So how does a recent upstart forge through its first recession? By opening more stores, of course.

Nicole Burgan, a PR representative that spoke with Minyanville, said that BI would like to open an outlet in every major US market.

And it’s on its way: Stores already exist in Brooklyn and Manhattan in New York; in Portland, Oregon; and in Chicago, Illinois. The company plans a new store opening in Philadelphia, Pennsylvania, for February 2010.

As we enter the new year, Funk says she wants Brooklyn Industries to be the “premier contemporary design company in New York that produces innovative designs and is the finest company to work with.”

With goals like that, who needs New Year’s resolutions?

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