“We can start a company.” Jerome Chazen ’50 was 48 years old and already a successful executive when he uttered those words to two old college friends over drinks in Manhattan’s Garment District in 1975. By 1989, their start-up — Liz Claiborne — was the largest women’s apparel company in the United States, with $1.4 billion in annual sales.
Liz Claiborne’s phenomenal success is the subject of a new memoir by Chazen, My Life at Liz Claiborne: How We Broke the Rules and Built the Largest Fashion Company in the World (AuthorHouse, 2011). Earlier this month, Chazen talked to Hermes about transforming the apparel industry, taking to marketing “like a duck to water,” and Project Runway.
By 1991, Liz Claiborne had ventured to Canada and the European markets and listed on the New York Stock Exchange. That was also the year Chazen founded the School’s Jerome A. Chazen Institute of International Business, which develops international perspectives in business practice and policy.
Prior to launching Liz Claiborne, Chazen worked as an analyst on Wall Street and spent 16 years in retail. He is also the founder and chairman of Chazen Capital Partners, a private investment firm, and is a member of the School’s Board of Overseers.
In your book you describe the apparel industry as tradition-bound. What’s one way that Liz Claiborne challenged the practices of the past?
When we started our company, the most prevalent apparel classification for women was dresses. The concept of separates didn’t exist. A typical department store would have a blouse department, a skirt department, a pants department, and so on, each of which was bought and merchandised by a different buyer; there was little coordination between colors and styles. If you wanted to put an outfit together, it was very difficult.
From the very beginning, our concept was to create a line of coordinated separates so that women could create a multiplicity of outfits. It was something that I felt very strongly about. I’ve always considered myself a retailer — it’s part of my DNA. When you are in retail, you follow the consumer. I felt very strongly that there were new consumer needs. More and more women were going to work and a more casual way of dressing made a lot of sense. We knew that this was one of the elements that would separate our company from what else was out there.
At first we had to convince retailers to make room for our merchandise. Consumers responded very well and those initial retailers were rewarded for taking a chance.
You mention that you took to marketing “like a duck to water.” What is it about marketing that inspires you?
Certain things just seemed obvious to me. Even as a kid I was fascinated by advertising and what stores said about products. I was a child of the depression — I always looked at store windows. I couldn’t buy these things, but I was always interested in the slogans and the things that companies did. It didn’t even occur to me then that people were doing these things to help sales. At Liz we built the No. 1 recognized brand in America with no institutional advertising. What we did instead was a hell of a lot of marketing.
For example, we worked very assiduously with fashion magazines. We were very fortunate that the consumer who was buying our clothes was the same consumer who was reading these magazines. The magazines would come and take a look at our line and select items for editorial coverage. We got a lot of attention that way. Editorial coverage is worth three times an ad in the same magazine in terms of the value consumers place on it.
When you were at Columbia Business School, you took a course with Professor David Dodd, MS ’21, coauthor with Benjamin Graham of the legendary investment guide, Security Analysis (McGraw-Hill, 1934). How did your coursework in finance at Columbia influence your career?
The company grew very quickly; we went public just five years after we started. The things that I learned at Columbia about all of these elements — finance, operations, how Wall Street works, et cetera — added to my store of knowledge so that when we met with various securities companies about going public, I was very comfortable talking with these people because I’d gone to school with them. I was the only one in our company who had this background.
Liz Claiborne was the company’s first president as well as its principal designer. What was she like?
Liz was a terrific lady. Very quiet, almost shy. She enjoyed being a designer and an artist and sitting in a corner doing her work. She could sit for hours determining if one button on a particular garment was a millimeter too high.
Did writing the book and reflecting on the company’s success lead to any unexpected revelations?
Building a company from zero to billions of dollars in a relatively short time is a daily adrenaline rush like nothing else. But it was very tough on my family. It was very much a 24/7 life. Nothing was more important than the daily company activities. I never seemed to be home. When I look back at that part of my life, I realize that you can get carried away by these things.
Should I have pushed for more balance in my life back then? I don’t know. Maybe. All I know is that it was so exciting — even the bad things; it was a bumpy slope to the top. But that didn’t matter, because we were moving in the right direction and we were constantly asking, what more can we do? I was driven to succeed, especially after we went public.
I’m not sorry for what I did, and I think I’ve since made it up to my three kids. Even before Liz Claiborne, I had a tendency to give my all to whatever job I had. I was just that kind of person.
What’s your advice for students pursuing careers in retail?
Know the business. It’s no coincidence that we were in our late 40s when we started the company. We were not star-struck kids who thought we knew the business. We had all spent our careers in the apparel business. Between the partners we had a pretty good grounding in all of the elements of the business. Know everything about your industry before trying to do something on your own.
I get upset with things like Project Runway where kids get the idea that they’ll design one garment and then become a millionaire. It doesn’t work that way. In a sense it’s very important that you pay your dues. When you know your industry and how to do things, then the ideas that you have make more sense because even in your own head you can bounce them off the experiences that you’ve had. Can a factory reproduce what I’ve designed? What do I need to know about the fabric? So many things go into making a garment; when people don’t know the answers, they are bound to make terrible mistakes.
It may be a personal bias, but I also think that getting your feet wet in retail is a terrific start for almost any type of career. Virtually every company today deals with consumers. The background that I had in the retail world has always helped me.
Read an excerpt from the book in Chazen Global Insights.