How Everlane Is Building The Next-Gen Clothing Brand

Behind all those no-nonsense, high-quality basics is a savvy selling machine.

How Everlane Is Building The Next-Gen Clothing Brand
Everlane has scored big hits in the past couple of years with its $100 cash- mere collection and the launch of its first denim line, which is ethically sourced. [Photo: Stephanie Gonot; Set design: Natalie Shriver; stylist: Annie & Hannah; hair: Hailey Adickes at Celestine Agency; makeup: Amy Chance at Celestine Agency]

Five years after Everlane founder and CEO Michael Preysman declared that he would rather shut down his company than open a store, some 75 people are lining up outside of a minimalist glass storefront in Manhattan’s fashionable Nolita neighborhood. Inside, stacked on blond wood shelves against austere white walls, sit the unassuming objects of their desire: affordable, high-quality basics—$100 cashmere sweaters, $15 pima cotton T-shirts, $65 Japanese denim jeans. Most Everlane product launches these days are met by waiting customers, and the company’s inaugural store opening, on a brisk Saturday morning in December, is no exception.


“We’ve realized that there is much more to do to spread the [Everlane] story,” says Preysman, who plans to roll out additional brick-and-mortar outposts around the country in 2018, beginning this spring in San Francisco. “[It] requires more than an online click.” Since launching the company in 2011 as a direct-to-consumer clothing brand committed to “radical transparency,” Preysman and his team have been strategically expanding its scope. Defying the reign of fast-fashion heavyweights like Zara and H&M, Everlane has used its website and social media handles to offer customers a glimpse into its factories around the world, give voice to the workers making its garments, and share a price breakdown of each product it sells. Shoppers can see that Everlane’s original $15 American-made tee costs $6.50 to produce—and that the company’s markup is significantly less than the $45 that traditional designer brands tack on.

Today, Everlane is ramping up production, making everything from leather bags to sneakers to puffer coats, and dropping an average of six new items into its lineup each month. Some 44,000 people joined the waiting list for a new line of denim in September. The company has shipped products to more than a million customers, including celebrities like Angelina Jolie, Karlie Kloss, and Meghan Markle, who’ve been spotted with Everlane’s tote bags and loafers. And it’s profitable, according to the company, with sales doubling annually for the past three years. Everlane hit $100 million in revenue in 2016, according to Privco, a firm that analyzes private companies.

Everlane’s forthright messaging, coupled with its spare, fashion-forward aesthetic, has turned customers into emissaries—and inspired a slew of upstart fashion brands, such as shoemaker M.Gemi and technical clothier Aday. “Everlane provided a model for how to communicate that our quality is what we say it is,” says Scott Gabrielson, founder of accessories startup Oliver Cabell. Preysman is also pioneering new approaches to retailing, making use of steady product launches, waiting lists, and limited inventory to both predict and drive demand. “Everlane created a sense of urgency and exclusivity [around its products],” says Marshal Cohen, an analyst with market research firm NPD. That it’s done this for no-nonsense, long-lasting basics is all the more remarkable.

At Everlane’s headquarters, located next to an autobody shop in an industrial part of San Francisco’s Mission District, the mostly millennial-age employees wear some variation of boxy sweaters, high-waisted pants, and low-heeled boots. The palette rarely strays from black, white, and gray; there is not a pattern in sight. “We have trouble with color here at Everlane,” Preysman says with a sly smile.

Preysman, who studied computer science and economics at Carnegie Mellon and worked in finance before founding the company, embodies Everlane’s ethos. He sports a trim beard and wears the same outfit almost every day: jeans, a black long-sleeved wool button-down, and black sneakers. He keeps other aspects of his life equally simple. His most expensive possession is the bed in the rented loft apartment a block away that he shares with his wife; they don’t own a car. “What does it take for me to buy something?” the 32-year-old CEO asks. “It is a very intense and complicated process.”

Everlane has functioned without a creative director since Rebekka Bay, who joined the company in 2015 from Gap, left for Uniqlo last February. Preysman prefers a more diffuse structure. A team of designers presents ideas to him, along with head of creative Alexandra Spunt (who formerly ran content at American Apparel) and a handful of other department heads. Together they decide what to add to the lineup, keeping a focus on timeless pieces made with high-quality materials.


Everlane has wooed shoppers by pulling back the curtain on its production process and sticking to well-made, though fashion forward, basics. [Photo: Stephanie Gonot; Set design: Natalie Shriver; stylist: Annie & Hannah; hair: Hailey Adickes at Celestine Agency; makeup: Amy Chance at Celestine Agency]
Preysman is equally judicious about how to launch and promote a product. Although denim is a more than $40 billion global market, he delayed coming out with jeans until Everlane’s head of product, Kim Smith, could locate a factory that met the company’s sustainability standards. She eventually found one in Vietnam that recycles 98% of the water used in denim manufacturing and turns the leftover sludge, filtered of chemicals, into bricks that are used to construct affordable houses. For several weeks before the denim was released online, Everlane shared pictures and stories from the factory, which led to a record-breaking waiting list. A year earlier, Preysman alerted customers that the brand was dropping the price of its cashmere sweaters from $125 to $100 to reflect the lower cost of raw materials. The company’s cashmere sales jumped 200%.

Everlane uses its waiting lists, along with real-time data and customer feedback, to make inventory decisions. When in doubt, it stocks less. And when items sell out—which happens a lot—Everlane can restock quickly, thanks to its close relationships with its more than two dozen factories worldwide. All of this generates the specter of scarcity, which Preysman leverages: Customers sign up for early access to new clothes and to be notified when popular ones are back. Last year, when Everlane’s new ballet-inspired heels sold out within three days, 28,000 people added their names to the waiting list. This steady communication with customers is so important to Preysman that, until a few weeks ago, he was involved in drafting every single email.

To avoid the appearance of discounting, Preysman developed a Choose What You Pay model for overstocked items, where customers can pick up, say, a dress shirt for one of three different prices. The website explains that the lowest one lets Everlane recoup its costs, while paying more allows it to invest in future product development. Twelve percent of shoppers opt to pay more.

Preysman is now applying his methodical sensibility to brick-and-mortar retail. On the surface, his first outpost appears basic. That’s by design. Preysman keeps the storefront free of mannequins so that passersby instead see customers and staff milling about. “The people are the important component of the store, not product,” he says. A pair of headphones hanging from a wall offers a soundscape from one of the company’s T-shirt factories, and the space hosts events and workshops in the evenings. (The first was a conversation with Preysman about the company’s mission.) The CEO also tasked developers with creating a custom payment system that allows shoppers to check out by using their online account information.

Everlane expects to open more stores in the coming months, but the rollout will be slow. Preysman has no interest in chasing growth for the sake of vanity metrics. Instead, he’s focused on finding new ways to sell customers on his vision for sustainable fashion that can withstand the test of time. “Wool pants that are millennial pink—that’s not something that is going to last,” he says. He’s building Everlane for the long haul.

Everlane is No. 40 on the 2018 World’s Most Innovative Companies list. Check out all 50 companies here.


About the author

Elizabeth Segran, Ph.D., is a staff writer at Fast Company. She lives in Cambridge, Massachusetts.