Animal print can be a snooze,” sighs Lesley Clifford.
The director of merchandising at Rothy’s, the fast-growing maker of 3D-knitted footwear, is bantering with the creative team in the basement of the startup’s San Francisco headquarters. Drawings of vision boards and fashion trends are pinned to the walls.
Roth Martin, the company’s cofounder, is here to review a lineup of colors for a new boot—the startup’s fifth silhouette, slated for launch in the fall. While the navy and solid colors look beautiful, and pass Martin’s approval, no one is happy with that animal print.
“I don’t think ‘snooze,’ ” responds Erin Lowenberg, the company’s creative director, who’s consulted for brands like Patagonia and Gap. “I think the one we sampled isn’t good enough.”
Overall, though, Martin is pleased and in a jovial mood. Lowenberg steps out to take a phone call, and Martin teases her when she returns. “We recolored the whole line while you were gone,” he says. Lowenberg responds with a good-natured laugh.
Getting the perfect colors and patterns is essential to fashion success, and there has never been a more critical moment for Rothy’s. In three years, Rothy’s—a mash-up of Martin’s first name and the nickname of his cofounder, Stephen “Hawthy” Hawthornthwaite—has rocketed out of nowhere to $140 million in revenue, mostly built on low-cost social media marketing and word of mouth. Look down at a woman’s feet the next chance you get. She’s probably wearing a pair, especially if she’s under 40. Meghan Markle, for one, is a fan. The Duchess of Sussex was spotted wearing the brand’s black point-toe flats (priced at $145) while pregnant with the royal baby.
Behind Rothy’s success are shifts in both shopping patterns and what women want in footwear, a giant market with $72 billion in U.S. sales ($34 billion of which is women’s), according to market research firm NPD Group. Heels and hobbling are out: Comfort and sustainability are in. “Consumers are not going to give up on sustainability, and they’re not going to give up on comfort,” says NPD analyst Beth Goldstein. Obsessive Rothy’s customers wait in line outside the company’s miniature Fillmore Street store and join a private Facebook group for self-described Rothy’s addicts with nearly 14,000 members. “We’re creating a product that women love,” says Martin, 46.
And a company that investors love. With a valuation of $700 million after its most recent funding round, Rothy’s has raised just $42 million in equity from investors led by Lightspeed Venture Partners and Goldman Sachs. Martin and Hawthornthwaite continue to own a majority of the business, a combined stake that Forbes pegs at roughly $500 million. Rothy’s won’t comment on that stake, but the small amount of outside capital is by design. “If you have gobs of money, you might be inclined to go out and start buying customers or making dumb decisions,” Martin says.
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