The Glossy Podcast: Episode Summary Title: How Danielle Elalu Plans to Grow Derek Lam Ten Crosby’s Sales by 70% in 3 Years
Host: Jill Manoff
Guest: Danielle Elalu, President of Derek Lamb Ten Crosby
Release Date: January 29, 2025

1. Introduction and Guest Background

The episode commences with Jill Manoff introducing Danielle Elalu, the president of Derek Lamb Ten Crosby, a contemporary fashion brand established 14 years ago. Danielle shares her journey, highlighting her previous tenure with the company five years prior and her return in July 2024 to spearhead brand development, growth, and global expansion. [00:05-01:22]

Notable Quote:
"I've missed apparel. And I think a lot of what I learned in those other categories has been great to come to Derek Lamb Ten Crosby and apply it to the business and the strategy here." – Danielle Elalu [01:24]

2. Market State and Current Challenges

Danielle delves into the state of the advanced contemporary market, noting its stagnation during the COVID-19 pandemic as consumers shifted towards luxury handbags, accessories, and activewear. However, she observes a recent resurgence, attributing it to rising luxury prices that create space for advanced contemporary brands to differentiate themselves. She points out challenges such as brands like Nilly Loton and Ulla Johnson expanding into higher price points, which opens opportunities for brands that remain steadfast in the advanced contemporary segment. [02:17-03:39]

Notable Quote:
"There's a really wide open space for advanced contemporary. And I think there have been some interesting things happening in the market with players that may have started out in the advanced contemporary realm and now really have moved into more of an upper price point." – Danielle Elalu [02:17]

3. Defining the Consumer Profile

Danielle provides a comprehensive overview of Derek Lamb Ten Crosby’s target consumer. The primary demographic spans women in their 30s to 70s, predominantly based in New York City, followed by Los Angeles and Texas. She emphasizes the importance of maintaining the loyalty of long-term customers while strategizing to attract younger audiences, such as their daughters or younger sisters. This dual approach aims to ensure sustained brand relevance and growth across generations. [04:12-06:50]

Notable Quote:
"Our customer is very, very savvy and she doesn't only shop in the advanced contemporary market; she also shops in the designer world. So we have to make sure that our fit and our quality are above par to make sure that we're servicing her in the proper way." – Danielle Elalu [05:58]

4. Retail Footprint and Expansion Strategy

Currently, the brand operates a single store in East Hampton, strategically positioned next to Chanel. Danielle views this location as an incubator, leveraging its seasonality by reopening in April to maximize utilization. Her expansion plan includes opening additional stores in Los Angeles and New York by 2026, followed by three more by 2027. She also plans to use pop-up stores in emerging markets to test potential locations for permanent retail spaces. [07:00-08:18]

Notable Quote:
"We are looking at opening a couple of stores probably in Los Angeles, maybe one more in New York, and then by 2027 we'll add an additional three." – Danielle Elalu [07:57]

5. Strengthening Third-Party Retail Partnerships

Danielle highlights the brand’s robust relationships with major department stores such as Saks Fifth Avenue, Bloomingdale's, and Nordstrom. These partnerships have been pivotal, allowing collaborative assortment strategies tailored to each store’s consumer base. Additionally, Derek Lamb Ten Crosby is present in 130 specialty stores across the US, a channel Danielle aims to double in the next two years to bolster brand visibility and accessibility. [08:30-09:50]

Notable Quote:
"We've always really had number one amazing relationships with the teams. We've all stuck by each other." – Danielle Elalu [08:30]

6. E-Commerce Focus and Strategic Shifts

E-commerce plays a significant role in the brand’s growth strategy, with plans to double online sales in the coming years. Danielle discusses a strategic pivot from lower funnel marketing to top funnel initiatives to enhance brand awareness and drive site traffic. This shift aims to address the needs of their vocal consumers and adapt to the evolving digital landscape, positioning e-commerce as a critical growth lever. [09:50-11:06]

Notable Quote:
"We really have the opportunity to double it in the next few years. We've been focused on lower funnel marketing, and now we are going top funnel." – Danielle Elalu [10:04]

7. Umbrella Company and Brand Evolution

Danielle provides insights into the umbrella company, Public Clothing Company, which has a history spanning 30 years in private label manufacturing across various retailers. Under CEO Dan’s leadership, the company has acquired additional brands like Genera and Hypercolor. Recently, they sold ATM Anthony Thomas Melillo, allowing Derek Lamb Ten Crosby to remain the main focus. She addresses the transition from Derek Lam to their current brand, emphasizing continuity and leveraging design archives to maintain brand integrity. [11:06-14:06]

Notable Quote:
"We’ve been very lucky to have a lot of designers that were here when he was here. ... what we've been missing and what we need to reintroduce into the collection to ensure that we're servicing her from head to toe." – Danielle Elalu [12:51]

8. International Expansion Plans

Currently exclusive to the US, Derek Lamb Ten Crosby aims to penetrate international markets starting with the UK and Europe. Danielle outlines a strategic approach, beginning with establishing a presence in specialty stores across key European countries before expanding into department stores. She envisions entering markets like the Middle East and Asia Pacific subsequently, leveraging partnerships to build brand momentum globally. [14:06-16:09]

Notable Quote:
"Starting in the UK and Europe and then heading to the Middle East and Asia Pacific." – Danielle Elalu [16:09]

9. Upcoming New York Fashion Week Presentation

Derek Lamb Ten Crosby is set to make its debut at New York Fashion Week on February 5th, held at the Crosby Street Hotel. Danielle shares excitement about showcasing a collection inspired by a French film, featuring aesthetically pleasing vignette presentations and a teased footwear collaboration launching in the fall. The event aims to generate extensive content and global storytelling to enhance brand awareness and engagement. [16:09-18:38]

Notable Quote:
"We really felt like we wanted to tell the story of the collection, which is based on a French film. And we're going to have vignettes that will be absolutely gorgeous." – Danielle Elalu [16:23]

10. Navigating Political and Economic Challenges

Under the new administration, Danielle discusses the impact of tariffs and the importance of diversifying the factory base to mitigate risks. With established relationships spanning Sri Lanka, Bangladesh, Turkey, and Peru, the brand is well-positioned to adapt to changing trade policies. Additionally, she touches on maintaining a strong company culture amidst shifting DEI (Diversity, Equity, and Inclusion) initiatives, emphasizing the value of team cohesion and community. [18:38-21:56]

Notable Quote:
"We started diversifying early on to make sure that, you know, if in fact we had a change in leadership, which we did, we were ahead of the curve." – Danielle Elalu [19:16]

11. Company Size and Ambitious Growth Goals

Derek Lamb Ten Crosby currently generates approximately $35 million in revenue, with a target to exceed $60 million within three years. Danielle outlines a balanced revenue model, aiming for roughly one-third each from wholesale, direct-to-consumer (DTC), and retail sales. This diversification ensures stability and mitigates dependency on a single channel. She also plans to explore category expansions and licensing opportunities, focusing on apparel while seeking strategic partnerships for footwear and accessories. [21:56-23:47]

Notable Quote:
"I think that having a balance and making sure that we bring in that retail component as well to balance it out right now, because today you're looking at probably 65% wholesale and then the balance in DTC." – Danielle Elalu [22:06]

12. Strategic Collaborations and Category Expansion

Danielle emphasizes the significance of strategic collaborations to reach new consumer segments. The upcoming footwear collaboration with a women-founded and women-owned partner exemplifies this approach, aligning shared values and expanding the brand’s product offerings. She also discusses potential future projects, such as luggage, sleepwear, and jewelry collections, aimed at enhancing the customer experience and fostering brand discovery within mono-brand retail environments. [23:47-26:06]

Notable Quote:
"We're really trying to tailor it strategically and lead with product and then find a partner that the group that we're working with right now on footwear, they're women founded, women owned. We really share a lot of the same values." – Danielle Elalu [23:57]

13. Retail Experience and Hiring Philosophy

Drawing from her own retail background, Danielle underscores the importance of hiring team members with retail experience. She believes that firsthand retail exposure equips employees with a deeper understanding of consumer behavior, which is invaluable across all departments. Her team routinely visits stores to stay attuned to market trends and competitor strategies, ensuring that the brand remains responsive and competitive. [27:35-31:04]

Notable Quote:
"From a design to production to sales, you go all the way around. It's the end consumer who really votes at the end of the day." – Danielle Elalu [27:35]

Conclusion

The episode concludes with Jill Manoff expressing enthusiasm for Danielle’s strategic plans and upcoming initiatives. Danielle reciprocates the excitement, anticipating the successful launch of the Fall Winter 25 collection and the positive impact of their New York Fashion Week presentation. Both hosts exchange final remarks, emphasizing the collaborative and forward-thinking nature of Derek Lamb Ten Crosby’s growth trajectory. [31:04-31:36]

Overall Insights:

Danielle Elalu illustrates a comprehensive and multifaceted strategy to propel Derek Lamb Ten Crosby’s growth by 70% over three years. Central to this plan are market differentiation within the advanced contemporary segment, strategic retail and e-commerce expansion, international market penetration, and innovative collaborations. Her proactive approach to navigating economic challenges and fostering a strong company culture further positions the brand for sustained success in the competitive fashion landscape.