Band of Outsiders: Fast Rise, Faster FallWarning: Spoiler! (Click to show)
At a private dinner in Los Angeles last fall to mark its 10th anniversary, Band of Outsiders and its founder and creative force, Scott Sternberg, showed off the sensibility that GQ once called a “whimsical mix of Wes Anderson chic and California cool.”
Polaroid cameras were placed around the restaurant in the Silver Lake neighborhood as playthings for guests, who included the writer Miranda July, the actor Adam Scott and the comedian Aziz Ansari, a host of the party who raved that the label’s clothes seem “fitted for me.”
Dressed in a shrunken tan blazer and a blue-and-white striped shirt of his own design, Mr. Sternberg, 40, looked like a walking advertisement for his label’s fresh, colorful, well-executed take on classic preppy style. He mused on the last decade and discussed his ambitious plans.
Band of Outsiders had recently opened its first stores in Tokyo and New York (the latter an airy, light-filled outpost in SoHo with a Momofuku Milk Bar attached so shoppers could buy cookies) with more retail shops planned. It was a time of heady celebration.
It was also the beginning of the end.
In May, as reported by Fashionista.com, the company laid off much of its staff and canceled fall orders. Its first sample sale at the SoHo store became, by the end of that month, a going-out-of-business sale, with price-slashed clothes grabbed up by shoppers in a state of disbelief and mourning.
When New York Fashion Week starts next Thursday, Band of Outsiders will not be among the 200 or so fashion labels showing around the city.
Although the label canceled its runway show for fashion week last year, stirring rumors of problems, many people outside and inside the industry were shocked by the news in May, including Mr. Sternberg’s friends and colleagues.
Guy Yanai, an Israeli artist who collaborated with Mr. Sternberg for his 2014 women’s resort collection, said he was dumbfounded when a friend emailed him. “I’d visited Scott’s offices in L.A., these two enormous floors, late at night, and it was such a bustling place,” Mr. Yanai said. “I thought it must be some kind of hoax or rumor.”
Ada Tolla, a founder of LOT-EK, the New York-based architecture firm that designed Band’s two stores, also believed the company was in a good place financially and creatively. When Mr. Sternberg called her to say the label was closing, she was blown away, she said. “I never, never thought that could happen, given the position that Band had reached in the fashion world,” she said.
Band of Outsiders had grown from a tiny operation designing men’s shirts and ties to producing a full men’s and women’s line, as well as shoes in collaboration with Sperry Top-Sider. The Los Angeles-based label was a darling of store buyers, fashion editors and Hollywood cool kids like Michelle Williams, Greta Gerwig and Jason Schwartzman, who all appeared in ad campaigns Mr. Sternberg shot himself using a Polaroid. Even Michelle Obama wore one of Mr. Sternberg’s dresses.
For his part, Mr. Sternberg has said little to explain the abrupt ending. After the news broke, he gave a brief statement to Women’s Wear Daily that “Nobody knows anything at this point but me,” but declined to comment further. Instead, he took to the label’s Instagram account, posting an old clip of Mama Cass Elliot singing “New World Coming.”
“The proverbial Fat Lady sings, at least for me and my time here at Band,” Mr. Sternberg wrote, before thanking fans and telling them “the store should be open for at least another week so, like, go buy something cute. And enjoy it. That was the whole point of this thing after all.”
That was in mid-June. Since then, the designer has kept a low profile (Mr. Sternberg did not respond to multiple requests to comment for this article).
The reasons for the label’s demise were financial. The label’s creditor CLCC S.A. said in an email statement that it had provided a $2 million loan to Band of Outsiders, which was secured by intellectual property, inventory and proceeds, and that the label defaulted on its obligation.
In July, CLCC held a public auction to sell the inventory and intellectual property.
Still, it remains a mystery in the fashion community how an established label with a loyal following run by a hands-on creative talent like Mr. Sternberg could be forced to simply shut its doors.
Echoing the feeling of many, Mr. Yanai, who has heard the reports of financial difficulties, said, “I don’t actually know what happened.”
From the beginning, Mr. Sternberg seemed to do almost everything right, starting with his choice of name, which he took from a Jean-Luc Godard film (the French title is “Bande à part”) and which simultaneously conveyed rebellion and membership to a club.
To Nina Garduno, who first met Mr. Sternberg in 2005, when she was vice president for men’s fashion at Ron Herman Fred Segal in West Hollywood, Calif., the creative vision the designer laid out had purity, she said. She was also impressed by the way Mr. Sternberg’s clothes injected punk attitude into establishment prep wear.
“I could imagine somebody smoking a cigarette in a bathroom at school,” said Ms. Garduno, who has since created the retail outlet and artist commune Free City Supershop in Hollywood. “I loved that quality about it. It speaks to a part of all of us.”
Ryan Smith, 32, who lives in Manhattan and works at a technology start-up, was one of the many young urban guys who welcomed Band of Outsiders’s artful yet relaxed style and form-fitting tailoring.
“The men’s fashion landscape was a wasteland of fit and design,” Mr. Smith said. “For a guy like me with a smaller frame, it was a big deal.” He bought the label’s Oxfords and ties and felt as if he could wear them on any occasion, he added, without feeling dressed up or stuffy.
Before designing clothes, Mr. Sternberg had studied economics at Washington University and worked at the Hollywood talent firm Creative Artists Agency. In addition to being a salvation to small-framed men, he was a brilliant marketer.
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He leveraged the power of celebrity and social media, casting fans of his label like Ms. Williams and Mr. Schwartzman in the Polaroid campaigns. The ads cost little to produce but generated huge exposure and, along with Mr. Sternberg’s visual references to European films, collaborations with artists like Sam Durant and Mr. Yanai and personal blog dedicated to cookies, it created the sense that Band of Outsiders wasn’t just a clothing line but a cool club.
“He was such a perfect narrator of this brand message that was kept so consistent for so long,” said Roy Chan, who for more than two years was acting chief executive of Band of Outsiders. “It was so consistent and so spot-on. And all of it was him. When I was there, almost every piece of copy he wrote himself.”
Mr. Chan met Mr. Sternberg around 2010, when the designer was in search of a C.E.O. to help him expand from what The Wall Street Journal reported was a $12 million business into what he hoped would become a $40 million business with the addition of women’s wear.
At their first meeting, Mr. Chan recalled, Mr. Sternberg spoke philosophically about a series of microbrands, each with a unique reason for existence but none so overly distributed that it loses its voice. Mr. Sternberg did roll out the women’s lines Boy and Girl and, for a brief time, the sportswear-focused This Is Not a Polo Shirt (he later combined them under Band of Outsiders to avoid confusion).
“My first meeting with Scott was so refreshing,” said Mr. Chan, who now is head of international for Kate Spade. “I saw the opportunity for the brand was quite tremendous.”
Still, he said, he wondered where the scale and money would come from to sustain it all. “Each brand is requiring so much energy and resources,” Mr. Chan said. “The beauty was in the insanity.”
For all his ambition and drive, Mr. Sternberg seems to have had an ambivalent or perhaps naïve view of the business side of fashion. In a talk at the Hammer Museum in Los Angeles in 2013, he said that he had long thought of Band of Outsiders as “a platform to put ideas out into the world,” before adding, in an obligatory tone, “It’s also a business and we have to, like, make clothes and a margin and money and things like that.”
In his approach to design, manufacturing and pricing, there was a strange disregard for increasing the company’s sales in a way that would take Band of Outsiders beyond a niche brand.
The clothes were beautifully made. But how many men care that a polo shirt was sewn in Japan using ultrathin super high-gauge cotton pique? And of those, how many are willing or able to pay $175? And of that very limited demographic, how many have the body type to wear a shrunken fit?
Eric Jennings, vice president and fashion director for men's wear at Saks, which carried Band of Outsiders, said another big challenge — and something he and Mr. Sternberg talked about a lot — was retail positioning. Band of Outsiders wasn’t high fashion like Thom Browne, or edgy like the European brands, or preppy at a lower price point like Gant Rugger, but somewhere in the uncomfortable middle.
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“Scott was authentic in his vision and in his aesthetic,” Mr. Jennings said, but added: “It’s an exceedingly tricky place to be. I don’t think anyone has quite nailed that zone of business.”
There were also macroeconomic and industry forces conspiring against the label’s success. Douglas Hand, a fashion lawyer whose clients include Phillip Lim and Rag & Bone, and who once represented a group of investors in Band of Outsiders, said that around four years ago he began to notice changes to men's wear silhouettes, in particular shirting. Mass competitors were copying the slimmer style that Mr. Sternberg helped make popular.
“As soon as Brooks Brothers, J. Crew and Uniqlo realized a large portion of men don’t want to have parachutes under their arms, they started making arguably a better product,” Mr. Hand said, because those companies could do it “cheaper but still convey the story that was part of that fashion.”
Ms. Garduno also cited the prevalence of online shopping and deep discounting by the mass brands, something she struggles with in running her own midsize fashion label and retail store.
“If you’re somebody not making that kind of volume and don’t have margin to offer discounts, how do you win?” Ms. Garduno said. “You don’t.”
When Mr. Sternberg took on investors and decided to expand into retail, he perhaps sealed his label’s fate. The initial investors, friends and fans of the brand, allowed him to maintain “total control of the business,” as he told Women’s Wear Daily. And he was able to open the New York store.
But he seemingly still hadn’t reconciled his purist creative vision with his business ambitions. The high cost of operating stores in Tokyo and Manhattan — in addition to producing the men’s and women’s lines without sacrificing a degree of quality to increase margins and sales — soon necessitated more investment.
It came from CLCC S.A., the fund run by the wealthy Belgian shipping magnate Christian Cigrang. The firm took a controlling ownership in Band of Outsiders and says it is considering its options in continuing to market the brand.
Perhaps the label will be sold overseas, or bought by a retailer like Urban Outfitters. At the July auction there were no high bidders.
Robert Burke, founder of a namesake luxury consulting firm, isn’t surprised, even with the accolades and loyal following. “The label or brand is so closely associated with Scott, and rightfully so, that I’m not sure what the real value is without him,” Mr. Burke said.
It remains to be seen if Mr. Sternberg will start another fashion label or pursue a different career path. People who have met and worked with him talk about how multitalented he is.
Ms. Garduno, for one, is waiting for the designer’s next act and says the death of a beloved label like Band of Outsiders, while sad, is inevitable in the cutthroat business of fashion.
“Look, fashion wants to kill you,” she said. “Fashion wants you to die so it can have a new birth. It’s vicious. It’s relentless.
“Scott and Band is gone in that life. I’m interested to see the new birth for Scott and what he makes next.”