NDAs, debt and lawsuits: trouble at Olsen twins label The Row
With reports that the brand is losing staff and has moved manufacturing out of the US, people are asking what the future really holds for Mary-Kate and Ashley Olsen’s ultra lush luxury brand.
The Row isn’t for everyone. But the someones that it is for really, really love it.
Ever since the brand was launched in 2006 with a single product — a perfectly crafted white T-shirt that retailed for USD$195 — the luxury label from Mary-Kate and Ashley Olsen has spoken to a specific customer. Elegant, understated and, above all else, wealthy. After all, The Row is a brand that sells a $39,000 backpack. A trench coat that costs almost $10,000. A plain cashmere jacket for $8,990.
And now, it might be in serious trouble. According to a new report from New York Magazine’s The Cut, The Row has had a particularly difficult 2020. The Olsen twins’ annus horribilis started with the closure of Barney’s New York, the luxury department store where The Row was the number one selling ready to wear brand, and a customer once purchased 30 plain sweaters to the tune of $30,000 — in a single transaction.
According to Business of Fashion, Barneys owes the brand some $3.7 million by the department store — more than Barney’s owes LVMH’s Celine, or Kering’s Saint Laurent, or even some of its landlords.
Women’s Wear Daily alleged in July that financial problems at The Row went beyond Barney’s closure. The publication reported that the brand was allegedly scaling back some of its production and had laid off around 50% of its workforce. The Row also has a diversity problem, WWD argued, speaking to sources who revealed that their workforce comprised of no Black staff members and very few Asian employees. The article also detailed ways in which the Olsen sisters seemed to have misjudged the mood of the pandemic, such as “installing a fur bed in the middle of their studio office that no one sat on”.
The Cut’s report goes deeper than just the financial side of the business, though. The article looks inside the belly of the brand itself, which has been reportedly haemorrhaging staff members over the past year, particularly from its integral design team, and recently made the decision to move manufacturing out of New York, where it has proudly established networks with factories since its inception, to Italy.
All departing staff members have to sign what The Cut has called “strict nondisclosure agreements” and many refused to speak on the record, though one did say — right before hanging up the phone — “where there’s smoke, there’s fire.” One former employee, the ex-president of The Row David Schulte, is currently suing the brand, the Olsens and their parent company Dualstar entertainment.
And it’s not the first lawsuit against the Olsens, either. Dualstar faced a class-action lawsuit in 2015 in which interns claimed that they were working 50 hour weeks without pay. The lead plaintiff, a design intern called Shahista Lalani, alleged she was hospitalised for dehydration after working for The Row. “She was very demanding,” Lalani told Page Six. “I was doing the work of three interns. I was talking to her all day, all night. Emails at night-time for the next day, like 10PM at night.” The suit was settled out of court for $140,000.
In the 15 years since it was first launched, The Row has established itself as one of America’s leading luxury brands. According to reports, the label generates between $100 million and $200 million in sales a year. The Row does not disclose official sales figures.
This is small fry compared to some big luxury brands, like Dior (54 billion euros), a fashion and beauty behemoth, or even a more minimal luxury label like Bottega Veneta (1.5 billion euros). But a nine figure turnover from a fashion brand is still considerable, and The Row is undoubtedly one of the most successful small luxury businesses in the world.
The question is whether they can maintain their success, and even if there’s a place for them in our new world, plagued by a global pandemic and a global recession. Is there a place for a $200 T-shirt or a $39,000 backpack in a world where millions have found themselves unemployed over the past year?
Maybe. Or Maybe not. The Row isn’t for everyone, but its core customer base is strong, and the past year hasn’t put a dint in their spending. The year of the pandemic saw the number of global billionaires rise by more than 400 names, and luxury spending continued at a steady rate, particularly on accessories such as handbags, watches and shoes.
And don’t forget that no matter what happens to The Row, the impact upon the Olsen twins themselves will be negligible. The sisters are worth approximately $250 million each, and $500 million collectively. Their fashion network, which includes The Row and also other lines, such as their more affordable range Elizabeth & James, is worth $1 billion, according to reports.
The Row is only a small piece of that pie, even if it is the most beautifully crafted and exquisite piece.
