Everlane to open first physical stores

Dive Brief:

Everlane is planning two physical stores, each a relatively small 3,000 square feet. One, in New York City's SoHo neighborhood, will open Dec. 2, and the other, in San Francisco's Mission District, will open in February, the Washington Post reports.
The stores will feature T-shirts, cashmere, denim and shoes, according to the report, but an Everlane spokesperson told Retail Dive in an email that further details won't be released until Friday. Everlane last fall ran a "Shoe Park" pop-up in SoHo, one of several short-term pop-up shops and fit studios Everlane has opened over the past three years.
The flagships will join Everlane's existing brick-and-mortar operations, a "lab" in San Francisco's Mission District, where the latest collections are sold, personal stylists help find and fit items, and returns and exchanges are accepted, plus shops at some Nordstrom locations. Everlane previously launched a partnership with boutique retailer Opening Ceremony, where its core cashmere collection, two limited-edition sweaters and a holiday capsule collection were sold through Opening Ceremony's New York City and London locations.

Dive Insight:

CEO Michael Preysman and designer Rebekka Bay told attendees at the Fashion Tech Forum in Brooklyn last year that the company was taking a serious look at brick-and-mortar, which Preysman years ago rejected out of hand. In 2012, Preysman told the New York Times fashion magazine that Everlane would never open a brick-and-mortar store, even as it was opening pop-ups in New York, San Francisco and Los Angeles.

He reiterated his resistance to physical retail to Quartz magazine in March 2016, but by October last year he'd decidely pivoted, saying, "There is a set of customers that wants to touch product before they buy it, and that's not something that we can change, no matter how much social media we do. So we are thinking about [physical retail]. We're looking at it, and that's all we can say at the moment."

While much is made of Preysman's change of heart, it's par for the course for successful online purveyors. Despite the pressure on physical retail from an overbuilt environment and the growth of e-commerce, opening stores has emerged as a necessary path for growth. Everlane has also found that many customers want to make returns and exchanges in person.

Indeed, physical stores, and their much maligned partners in retail — malls — at least at the high end continue to experience growth in sales per square foot, according to a report from L2, conducted with Simon Property Group. According to the report, while internet darlings like Warby Parker and Casper Mattress are often thought of as examples of the success of pure-play, they're likely to see entrenched success by opening stores. In fact, many such pure-play ventures are well aware of the need for brick-and-mortar; two-thirds of venture capital-backed e-retailers raised funds "with the explicit purpose of building stores," according to the report. Lululemon rival Outdoor voices is among the latest pure-play retailers to open stores, with a new West Coast location opening on Saturday.

More interesting, perhaps, is Everlane's proven ability to avoid discounting, by being transparent ("radically transparent," according to Preysman) and being marginally flexible on price by providing a few pricing options and detailing how some of the money goes to shipping and manufacturing. The retailer went as far as shutting down on Black Friday in its early years because it didn't want to participate in the blatant and heavy promotions of that day, although it is now open and donates profits from the day to its factory workers, according to the Post.

"I just said, 'We don't run sales, so we're not going to participate in this,'" he told the Post about his previous Black Friday allergy.

Everlane's "lab" in San Francisco functions as a retail store, but the Everlane spokesperson told Retail Dive that they are different, without giving further details.