How Brooklyn-Based Sneaker Brand Greats Raised More Than $15 Million in Funding in Just 3 Years

Next up, the direct-to-consumer label is launching women's and men's styles in eight Nordstrom stores on the West Coast.
By Mikelle Street ,

Ryan Babenzien, founder of Brookyn-based sneaker company Greats, says that he didn't expect for the brand to dip into the women's market, but things change. "When we launched, we never said we wouldn’t do women's, but we said we were a men's-focused [company] simply because we knew the men's business really well," he says. But on Monday, the direct-to-consumer label — known for turning out luxury sneakers with a quality comparable to the likes of Common Projects, Gucci and Lanvin — launched both women's and men's styles in eight Nordstrom stores on the West Coast, fresh off its first women's-specific collaboration with Jason Wu's diffusion line, Grey.

Babenzien launched the company with sneaker impresario Jon Buscemi (who has since parted ways) off the back of stints at companies like Puma and K-Swiss. And while Puma now enjoys a healthy relationship with Rihanna, Babenzien left the activewear giant as the head of entertainment marketing having worked on an Alexander McQueen collaboration, launched an MTV web series and booked Lady Gaga for the company's 40th anniversary party. He even roped Christian Siriano, then fresh off a "Project Runway" win, into a project that saw the young designer repurpose pieces from old Puma collections into looks for three in-store concerts by Estelle. "That [project] really connected a lot of the dots and I had hand-picked the whole thing," says Babenzien. But in 2014, after cycling through some other roles, he was ready for his own company.

"By the time we launched Greats, the sneaker market was certainly something that was altogether unique," says Babenzien. He recalled that at the launch of Greats, the trading market for sneakers was becoming quite active, having since grown exponentially into a reported $1 billion market. But outside of the sneaker business, the direct-to-consumer movement was beginning to gain steam — and that's where there was a niche to be exploited.

Ryan Babenzien. Photo: Courtesy

"It was our position that all great brands of the future from 2014 and beyond were going to be direct-to-consumer-based," explains Babenzien. "Guys were doing it in sunglasses and in T-shirts but nobody was doing it in footwear, so that's why we launched the brand." And with successes like the Grey Jason Wu collaboration selling out in 12 hours or the company's Marshawn Lynch partnership selling out in 49 minutes, it's clear there's an ongoing interest. But in the contemporary sneaker world — and in the related world of streetwear — some lay quick sales completely at the feet of "hype."

"We are not a hype brand," clarifies Babenzien, referring to brands predicated on ramping up demand for product, but undercutting that demand with a limited supply. "We do some of that, but that's not what our business is built on. I want to make really great product that's super-amazing quality and super-stylish and get it to the most people because I'm super proud of what we do — and then give them the best price when we do that." Babenzien contends that collaborations that could arguably fall into that category — like the Lynch partnership, and a link-up the company did with United Arrows that sold out in two hours — just happen to be projects that "people in the know understood were special."

The bulk of the Greats operation is just like any other large-scale sneaker business. Though Nike releases buzzy collaborations with the likes of Virgil Abloh, one of the company's perennial top sellers is the Monarch shoe in its various iterations. "From a business perspective, it was significant and very important, but from a design perspective, it was undesirable," Monarch designer Jason Mayden told NiceKicks of the sneaker, which is large, unwieldy and decidedly not an appeal to "fashion." But Greats pushes that idea forward with its Royale best-seller, which comes minimal, stylish but classic and rendered in luxury materials. "You don't get to be the number-one business in this category and not have an everyday thing," says Babenzien, before calling the Royale the "most accessibly-priced luxury sneaker in the world."

A look from Greats' Spring 2016 lookbook. Photo: Courtesy

That pricing is going to get a highlight on Nordstrom shop floor. As a precursor to Monday's launch, the company tested its designs in Canadian Nordstrom shops last year; it became the number-one selling shoe in seven days. "Once we are sitting next to another brand that's [also] made in Italy and our price is half, sometimes more than half, price differential, the customer really starts to say, 'Well, you're using this amazing leather and you're made in Italy and I can get two for the price of one.' We generally win out."

The Nordstrom launch will be followed by the opening of brick-and-mortar locations, the first of which will be in the company's Brooklyn office in a format similar to Glossier's showrooms. Other locations will follow, with one in New York and likely another in Los Angeles. All of this, of course, dictates a need for investment and funds; over the past three years, the company has raised $15 million in investment, the last $10 million of which was announced in May.

"We didn't want to raise too much money too soon," says Babenzien, pointing to other digitally native brands that he feels raised a lot of money quickly. "But there also was kind of a headwind against anyone trying to sell things online because they had given so much money to these other brands that failed." The resulting environment made Greats hone in on and sharpen the business, increasing customer retention and fine-tuning issues like sizing. And now, with those elements mostly down, the company is ready to expand.

"Sneakers have finally gotten to a place where they are truly a classic," says Babenzien. "There's been trends where things go up and down, but now they've established themselves in the way that denim has, or a white T-shirt and khakis; it's permanent at this point. And if I do my job right, every single person in the country and beyond will own a pair of Greats."

Homepage photo: Courtesy

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