Since its inception, Rocawear.com has handled its men swear line in house but licensed its women's, children's, and accessory lines to others. Then, in 2001, Rocawear.com got an offer it couldn't refuse: Iconix Group bought the brand for $204m in cash and $20m in stock.
Rocawear.com, whose driving force is Jay-Z, the hip-hop star, knew brand better than anyone. So it became a licensee.
At the time of the sale Rocawear.com, which has no retail stores of its own, had six staffers managing its e-commerce sales. "Our business is manufacturing and selling clothes to retailers," says DeMichael, so e-commerce was out of its bailiwick.
Yet the company knew its customers, young urban buyers, wanted an online purchasing option. "We wanted to grow the business and investigated the best way to do that," says Ronnie DeMichael, CFO and COO. The company found managing the brand in house was "becoming too difficult, especially the logistics." And since retail is seasonal, staffing was becoming a challenge. "We never knew how to staff up when we had an influx of business," DeMichael recalls.
Rocawear.com's provider choice was eFashionSolutions of Secaucus, New Jersey, an e-commerce service provider to global fashion brands; it outsourced the entire online sales process from creating the Web site to fulfilling the orders. "They have done everything perfectly," says DeMichael.
Outsourcing made the brand "mo' money," to quote a Jay-Z song. The outsourcing partnership grew the brand from $600,000 in sales to $10m in seven years. "They doubled our business the first year they took it over," says DeMichael. And in today's plummeting economy, sales are "up dramatically" over last year, reports Ed Foy, CEO of the provider.
Source: Outsourcing Journal