When Michelle Smith launched Milly in 2001, there were only a handful of other brands in the contemporary market space. She called it a "young designer" brand and sold wholesale to department stores like Barneys and Bergdorf Goodman. Flash forward to today and there are over a hundred competitors in the broad contemporary space, ranging from fast fashion retailers like Topshop to advanced contemporary brands like Tibi. But instead of adjusting her prices or switching up her aesthetic, Smith has continued to grow her business by building her e-commerce site and expanding into new product categories.
I spoke with Smith ahead the third annual Protect Your Girls breast cancer fundraiser where she served as a judge in the event's bra design contest for the second year in a row. (I also volunteered as a judge for the event.) Read on for our conversation about starting Milly at age 27, her recent collection for Kohl's and whether she'd ever consider outside investors.
How has the contemporary market changed since you stated Milly?
It's changed so much. When I launched Milly it was 2001 and there were maybe five other brands I was competing with. Contemporary was a very new market and there really wasn't a lot of competition. I was able to use my experience in the luxury goods market but I wanted to be able to create a collection that I could afford — or that I could work hard and almost afford — which did not exist at the time. It was either real high end designer or kind of low end merchandise. There wasn't a lot in between.
Now if I look online there are more than one hundred competitors in my space. Milly was launched purely as a wholesale model selling to other stores like Barneys, Bergdorf Goodman and Neiman Marcus, so I've shifted into my own wholly owned retail strategy. I have my own e-commerce site and my own freely standing stores, several in the United States and another one is about to open in the Middle East. I have five in Japan. That's become much more of a strategy: to tell people my story and what separates me from the rest of the pack.
I think it's really important to be able to do that and to really control the image of my brand in the best possible way. As the market has become more crowded with brands, I just feel like I've risen to the occasion. I've put my stake in the ground and said what I stand for. My collection, I think, is very unique in the market and doesn't look like anything else that's out there. It's not always easy to maintain that DNA and also evolve each season and continue moving forward.
Have you increased your prices since you started?
It has increased since I launched, it's maintained with inflation. I haven’t intentionally spiked my price point, its been a natural gradual change. My average retail price is $495.
Why did you decide to design a collection for Kohl's?
I thought it was a really cool opportunity to allow my collection to reach to a broader audience. It's an exclusive limited-edition one month in and out — I think it's a really exciting low risk way to do that and to see how my collection might have appeal to a larger audience.
What are your biggest growth markets right now?
My domestic business is the biggest but other markets are growing a lot. Latin America ... the Middle East is really on fire for me. The dollar is becoming really strong so we'll see what's happening with Europe, they don't have as much buying power right now. There's always shifts in the market where it's a good place to expand. The biggest growth opportunity I’m experiencing is with my own e-commerce site, Milly.com. I think it's just the way people shop now. They want the best selection and if they like Milly, they’re going to find the best selection of Milly on my website versus other stores that kind of cherry pick [the pieces they want]. And I can carry exclusives, runway exclusives, the most special pieces. I think that's the strength of it.
Which categories have been successful for you?
I’ve expanded into other product categories. We've had the Milly Cabana swimwear collection for about six or seven years and that's doing great. I launched Milly Minis, which is my childrenswear collection about four years ago. Evening wear launched three seasons ago, so it's a year and a half that it's been out at retail. There was really a void in the market for evening wear that a young cool girl wants to wear, without spending $7000 on a dress or having to buy a dress off the rack that you see a million other people in. There's a really nice niche that I’ve found for my evening wear collection.
What are your goals in the short term?
I’m focusing on growing my business, especially through my commerce site and opening more retail stores. I’m developing a strategy for the next three years for more freestanding retail and I already have the plans in place for e-commerce growth.
Have you considering outside investment to help Milly grow?
We have thought about it but we haven’t made any moves yet. Right now the business is wholly owned by myself and my husband, we’re 50/50 partners. It could be [a possibility], we have different options, but it's more of a private issue whether or not we decide to take on outside investors.