Bernt Ullmann: Lessons on Branding from a Fashion Industry Mogul – Business Lunch With Roland Frasier

Check out The Business Lunch with Roland Frasier Podcast Website

Key Takeaways

  • “You only get to make a first impression once… so you might as well make it a good one”
  • Brand consistency is VERY important
    • Make sure the brand evokes the same emotions across all product lines and everything you do
  • One of the most important things Bernt learned during his time at Donna Karan – the good-better-best pricing strategy 
    • Having tiered pricing/products caters to the aspirations of consumers who might not be able to afford the main brand while still allowing for the exclusivity of the expensive product line
  • “You cannot be best in class within every single product category. It’s just not even credible… I believe in concentrate and dominate. Be really, really good at what you’re good at. If you want to be a global lifestyle brand, you need to have a number of different product verticals, but it’s not logical that you’re the best operator for every single vertical.”
    • You don’t have to do everything yourself – consider licensing
  • 3 lessons in branding:
    • “At the end of the day, brands are about trust”
    • All great brands are authentic, credible, and aspirational
      • If you check all three of these boxes, there’s no reason why you can’t enter a new product vertical 
    • To put your brand on steroids, attach yourself to a celebrity or influencer

Books Mentioned

Intro

Pizza Pronto | Bernt’s First Entrepreneurial Venture

  • As a student in business school, Bernt started Scandinavia’s first home delivery pizza service, Pizza Pronto, in Copenhagen
  • They got some great press after landing a cover story on the business section of a local paper – a Norwegian selling Italian food in Copenhagen! 
    • The story generated a TON of business, but luck just wasn’t on Bernt’s side – both of his pizza trucks broke down that day and he couldn’t handle the incoming flood of orders, thus forcing him to deliver cold, soggy pizza hours late to many customers
      • The lesson – “You only get to make a first impression once… so you might as well make it a good one”

Nor Partners | Bernt’s First Fashion Venture

  • After graduating (this was in the mid-1980s), Bernt decided to jump from the pizza industry to the fashion business and partner up with one of his friends
    • The pair moved to Los Angeles and founded Nor Partners (short for Norwegian Partners)
      • (Bernt was still an absentee owner of Pizza Pronto at the time. He adds – “Being an absentee owner is typically not a good recipe for success.” While in L.A. his Pizza Pronto partner ended up selling the business… without telling him!)
      • Nor Partners imported Italian fashion (Lemon Clothing) into the U.S. and sold it with a healthy margin
        • “We hired reps and before we knew what was going on, we were selling to stores like Barneys, Nordstrom, and Nieman Marcus… we were selling to every single leading store!”
      • Bernt and his business partner worked with a factoring company (who funded the order book)
        • As background: “Factoring is basically when you have accounts receivable, meaning you’ve already sold stuff but people owe you money, and there are companies that will pay you a portion of that money as a loan with some pretty steep interest, but it allows you to have working capital.” – Roland
  • How did Bernt manage to get into all these big-name stores?
    • Classified ads
      • Nor Partners took out ads dictating that they needed reps with pre-existing relationships with stores like Barneys and Nordstrom
        • These reps were then paid on commission
  • But…. then the market changed
    • Specifically – the value of the dollar dropped by ~30% (this was in ~1987)
    • “Now what happened is what often happens when the market turns for the worse – the weakest start falling off”
      • Many of their buyers started going out of business – this put a HUGE hit on Nor Partners

Donna Karan

  • Bernt eventually found his way to Donna Karan, founded by none other than Donna Karan
    • As their Corporate Vice President and Head of International Sales, Bernt took them from $40 million to $250 million in international revenue
  • What did Bernt learning during his time here?
    • The power of brand consistency (consistency in brand messaging)
      • Expanded – Make sure the brand evokes the same emotions across all product lines and everything you do
    • It’s important to have a “halo product” or “halo line of service”
      • For example – Donna Karan launched with her namesake brand (Donna Karen) as a high-end collection. This then allowed for the creation of her diffusion line, Donna Karan New York (DKNY), which had the same brand essence, but was made available to a wider audience at a more affordable price point.
  • This relates to the “good-better-best” pricing strategy
    • Having tiered pricing/products caters to the aspirations of consumers who might not be able to afford the main brand while still allowing for the exclusivity of the expensive product line

A Lesson in Licensing

  • Donna Karen launched a side venture to enter the fragrance industry (without any prior experience)
    • After “investing” a lot of money in product R&D and many failed experiments, it was determined that it was probably best to just license someone else’s fragrance (who was already best in class)
      • Bernt adds – “You cannot be best in class within every single product category. It’s just not even credible… I believe in concentrate and dominate. Be really, really good at what you’re good at. If you want to be a global lifestyle brand, you need to have a number of different product verticals, but it’s not logical you’re the best operator for every single vertical.”
      • How does licensing in the fragrance industry work?
        • A fragrance company obtains the rights to sell a fragrance with your brand name and in turn, the brand collects royalties
      • The lesson – “You don’t have to do everything yourself. This licensing REALLY works.”

Lessons from FUBU

  • After Donna Karen, Bernt began working at FUBU
  • Here’s a story which dictates an important learning he picked up during his tenure:
    • FUBU acquired the rights to a brand named KUJI
    • They began selling KUJI jeans for ~$125 (thus making them a bit higher-end)
    • To help boost sales, here’s what FUBU did:
      • They launched KUJI LUX – a $425 pair of jeans 
      • FUBU also arranged it so, in their showrooms, buyers had to walk past the KUJI LUX jeans before they got to the KUJI jeans (price anchoring 101)
        • “We sold BOATLOADS”
  • Another major lesson Bernt learned at FUBU – the power of celebrities
    • Many celebrities started wearing the brand, particularly in music videos (this was during the MTV days)
      • One of the most popular celebrities to do so was LL Cool J
  • Daymond John, the founder of FUBU, is the author of The Power of Broke
    • One of the stories discussed in the book:
      • FUBU originated in Queens, NY where storefronts commonly use metal gates to protect their stores at night. These gates became quite grimy and dirty over time. Daymond and his team offered to clean the gates in exchange for being able to put the FUBU logo on them – free advertising!
    • For more Daymond, check out the Podcast Notes from his appearance on The Tim Ferriss Show

The Next Venture

  • After working for FUBU, Bernt was hired by Kellwood
    • In 2004, Kelwood acquired Phat Fashions (founded by Russel Simmons) – Bernt became the group President
      • Bernt took them from $85 to $850 million in revenue in just ~5 years with a heavy focus on licensing the brand across a variety of verticals (watches, shoes, handbags, backpacks, watches hats, swimwear, etc.)

3 Lessons in Branding

  • “At the end of the day, brands are about trust”
  • All great brands are authentic, credible, and aspirational
    • If you check all three of these boxes, there’s no reason why you can’t enter a new product vertical 
  • To put your brand on steroids, attach yourself to a celebrity or influencer

And there’s more!!?? | Bernt’s Current Work

  • In 2009, Bernt launched Star Branding in partnership with Tommy Hilfiger and his brother, Andy (as well as a few others)
    • The critically acclaimed licensing and brand management group specializes in creating, incubating, developing, marketing and distributing leading global lifestyle brands.
  • In 2010, partnering with Li & Fung, the largest apparel manufacturer in the world, Bernt served as the founding CEO of Music, Entertainment, and Sport Holdings (MESH) 
    • MESH procured several high-profile transactions, the best known being the Jennifer Lopez and Marc Anthony exclusive licensing arrangement with Kohl’s, the largest brand deal in U.S. history with record-breaking retail sales.
  • In 2013, Eddie Lampert, former CEO and chairman of Sears Holdings, ended up offering Bernt a job as CEO of a new division – Shop Your Way Brands
    • Bernt then helped launch two celebrity brands (those of Nicki Minaj and Adam Levine) into 500 Kmart stores, generating ~$200 million in sales
  • Bernt launched Celebrity Lifestyle Brands in 2016
    • They help celebrities, influencers, and brands monetize their social media followings

Additional Notes

  • Success in one industry does NOT translate to another – there are too many nuances
  • “The fashion space is part art, part science”
  • A lot of fashion purchases have to do with how that brand makes one feel
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