Behind a Rebound, True Religion Aims to Double Revenues

·9 min read

True Religion pulled off a neat trick.

“Even though the price points are affordable today, True Religion is still considered status,” said Michael Buckley, the chief executive officer of the popular jeans and sportswear brand. “We consider ourselves a modern streetwear brand rooted in denim.”

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He’s got big ambitions for a 20-year-old brand that in recent years has been through two bankruptcies; sweeping changes in management, sourcing and pricing; a downsizing of the store fleet, and a broadening of the offering and customer demographics.

“Our vision is to double the size of the business over the next four years,” said Buckley. “This year, we will do roughly $235 million to $245 million in revenue, from $151 million last year.

“The business is super profitable, probably one of the most profitable companies in this space.”

According to Buckley, the privately owned brand will make at least $65 million in EBITDA [earnings before interest, taxes, depreciation and amortization] and the business is growing at a double-digit rate.

True Religion used to sell $300 jeans at Neiman Marcus and other high-end, upscale stores. Now its top-priced jean is about half that and sold at stores like Macy’s, Selfridges, Nordstrom, Amazon, TJX Cos. and Dillard’s. The brand can be promotional, bringing the prices well under $100. Denim is still the core, though hoodies, joggers, T-shirts and accessories are a bigger piece of the business, and the iconography on the jeans — those signature horseshoe, Big T and Super T stitching — has been restored.

“Next year we will be able to do north of $100 million online,” Buckley said, adding that e-commerce will represent 50 percent of revenues in a few years, from 35 percent currently, while wholesale will represent 40 percent, up from 35 percent currently. True Religion sells at about 4,000 doors in the U.S., and about 1,000 doors outside the States. The True Religion stores are seen generating about 10 percent of revenues.

Thirty-seven True Religion units were closed during the last bankruptcy, which ended in November 2020, bringing the fleet down to 49 locations. Buckley doesn’t exclude the possibility of some openings. “We’d be opportunistic if we found the right location, the right size with the right economics. We are very strict on the store economics.”

Buckley rejoined True Religion in November 2019 as CEO after serving as CEO of Differential Brands Group (renamed Centric Brands) and earlier serving as True Religion’s president from 2006 to 2010.

“In 2010, when I was running the company, we sold 3 million garments. This year we will sell 8 million garments. Clearly, we continue to expand the amount of consumers that are buying True Religion. We believe that will continue in the foreseeable future.”

In the following Q&A, Buckley describes a business that’s rebounded, explains why it’s growing and addresses the challenges ahead.

Michael Buckley, styled in True Religion.
Michael Buckley, styled in True Religion.

WWD: How has True Religion and its customer base changed?

Michael Buckley: When I ran the business from 2006 to 2010, our positioning was really luxury. I sold two to three million garments a year but it was mainly $300 jeans, to the Nordstrom and Neiman’s customer. Call it a $200,000 household income customer. Once I left the business, it became obvious this consumer had changed dramatically. The first thing I did when I came back in 2019 was a survey of who is this customer. It’s very clear we have one of the most diverse audiences of an apparel and accessory brand in this country. It’s men and women, ages 15- to 60-plus years old, African American, White, Latinx. We did the survey again two weeks ago. We have 15 percent that is actually over 60. It’s pretty amazing we can sell multiple generations with this brand. The average household income of my customer today is about $65,000. We believe there are over 150 million people that fit into the demographic of True Religion today, which is obviously gives us a much broader reach as a brand.

WWD: What else has been accomplished since 2019?

M.B.: I brought back Zihaad Wells to be the creative director. I first brought him to True Religion in late 2006 from Levi’s in Europe. He looks after product and anything that relates to brand image. For whatever reason, the previous ownership here took some of the iconography off the product. They weren’t using the horseshoe. They weren’t using the Buddha — all the things the customer loved. We got the product got back on brand and we made sure our brand image spoke to our diverse customer base and not just one segment.…There were a lot of things that were not done right for a long time, but I saw it in the years I wasn’t here. The reality is you have to know who your consumer is and I think the company had tried to market to a luxury customer while how the customer dressed changed. The strength of this brand is its audience of 15 to 60 years old, all races. Trust me, when we were selling $300 jeans in 2010, my audience was nowhere the size of what it is today. When we look at the future of this brand and competitors like Levi’s and Guess, today we believe this is a brand that can be many times [larger] than it is today. We believe in the U.S. there is about 150 million that fit into in our age range and demographics and income levels. Our data base today is over 3 million and growing double digits.

WWD: How has the product line changed?

M.B.: We have a very large product line, It’s jeans. It’s T-shirts. It’s tanks. It’s joggers, shorts, skirts, polos, button-downs, accessories. Jeans is only 40 percent of our business today. We believe it will get back to 50 percent now that people are starting to go out again. Between the size of our price point, the size of our product line, my price points out the door today are T-shirts for $29 to $39. Our MSRP on jeans is $149 opening price point, but you will see jeans promoted at $60 or $70, not every day but we know the customers wants to buy this brand on sale.

WWD: Why is denim hot now?

M.B.: Denim is definitely on the way back. Male or female, they want to get dressed up again. People are going out to dinner. People are going back to work. With a nice pair of jeans, you can do that again.

WWD: Does denim ever really slump?

M.B.: There are cycles. We believe we are in the beginning of a strong denim cycle. Usually denim cycles last us three to five years. If you go back to the ’80s when premium denim at that point was the Guesses, the Sergio Valentes, there was a wave, and then there was another wave in the 2000s. But ultimately, we were very smart as a brand to diversify into other categories. People want the Buddha, Super T, the horseshoe, the True Religion iconography, whether it’s on a T-shirt, a hat, a hoodie, a jogger — all these other categories that we make.

WWD: Where are the voids and opportunities for the brand?

M.B.: We are in most men’s and women’s apparel categories. Our product line is pretty well represented, and we license out certain categories, like home, eyewear, fragrance, footwear, and accessories. We would like to go deeper in some outerwear, whether that’s light outerwear or heavy outerwear.

A True Religion T-shirt and jeans.
A True Religion T-shirt and jeans.

WWD: Where do you source?

M.B.: We make globally today…in Mexico, China, Bangladesh, India and Pakistan. That’s the vast majority. We’ve added a few countries, but we want to be diversified from a country standpoint.

WWD: Any intention of sourcing more domestically?

M.B.: We do some “chase.” We have a couple of suppliers we can work with domestically, or some in Mexico, where we we can turn garments very fast. At one time, way back when, we made 100 percent of our jeans in Los Angeles. It’s impossible today. It’s cost-prohibitive.

WWD: What can you manufacture in North America?

M.B.: T-shirts, hoodies, joggers, and in Mexico for sure, there are definitely plenty of jeans that can be made. Within the U.S., jeans are tougher, but there are plenty of T-shirt people that bring in blanks from other countries and do the dyeing and the screening. Most of the chase does come from the U.S. or Mexico just because we can get it in 45 to 60 days, sometimes even faster if they have the T-shirts already cut and sewn. It’s just a matter of dyeing and screening.

WWD: Last week, True Religion raised its profile by collaborating with Supreme. How did it come about and how did it go?

M.B.: They contacted us, quite frankly. They really want to work with brands that are unique, original. We have a certain point of view, certainly within the streetwear space. The collection sold out in three minutes. That’s it. If they would like to do something else, obviously we would jump. They love Super T stitch, the horseshoe design, the Buddha logo, what really makes True Religion authentic. It was good to see that the youth culture embraces what we are doing. We didn’t sell it but we worked with Supreme on the design to the product. They controlled the distribution through their website, and a few of their stores. Ultimately they wanted the iconic things that make True Religion special.

WWD: What about future collaborations?

M.B.: It’s important for us to resonate with Gen Z. Collaborations will continue with young and up-and-coming artists, dancers, musicians. We did a partnership with New York designer Madeline Kraemer. We are doing a partnership with Bluboy. These smaller influencers absolutely resonate with that Gen Z customer. It’s important that for a brand that’s been around for 20 years, that we are able to sell a 15 year old or a 60 year old. But we have a youth culture that believes in the iconography of the True Religion brand. We try to make sure we pick collaborations that will touch as many consumers that our data base shows.

Hoodies from the Supreme/True Religion capsule collection.
Hoodies from the Supreme/True Religion capsule collection.

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