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Welcome to Better Know a Store Owner, a weekly Racked feature focusing on the people who run our favorite boutiques around the city.
Raul Arevalo and Brad Schmidt have set up their menswear label Cadet to be an entirely Brooklyn-based operation. Take the L train to Bedford and walk a few blocks and you'll find their boutique, which sits on N. 6th Street not far from where the couple live. Stay on the train a little longer and you'll reach the Morgan stop, home of the factory where they produce their military-inspired menswear.
Raul has been a designer for years, working for everyone from Abercrombie & Fitch and Target to Nordstrom and Club Monaco. At Steve & Barry's, he collaborated with Sarah Jessica Parker, and he even spent a few years creating the outfits Venus Williams wore on the court. Brad, on the other hand, comes from a business background; before opening the store he spent 14 years doing project management for GE's healthcare division.
Last year, the two combined their skills to launch Cadet, debuting in Williamsburg back in April. Below, they talk about how they got started, what they've learned, and why Brooklyn was such an important part of their plan.
Did you always wanted to own a store, or was this a later-in-life thing? Raul, do you want to start?
Raul: I never thought about being a store owner until we decided on this store. I went to fashion school. My dream was always to have my own line, but I guess with time, working in a corporate environment, you kind of lose track of that dream. And then when Brad and I started talking about it, it kind of reignited that passion and I started getting all excited. Working at Club Monaco, I kind of just wanted to get out of there to get this thing started.
Brad: Raul always wanted to start his own line. He won the chairman's award at FIT for best menswear collection in 1995, and Barneys wanted to pick it up, but that's a difficult proposition because in the fashion world, especially with a Barneys-type line, that's investor stuff. A kid graduating FIT with no backers can't really do that. So I think in the back of his mind, he knew he could do it.
But when you start a business—and business is my background a little bit—you sit there thinking, "OK, do we want to wholesale, or do we want to retail?" And the length of time to see any money back is longer in wholesale. Let's say we open in December 2011, in January we would be trying to wholesale fall 2012. And then you're not seeing the revenue until you produce it and you're seeing it in stores.
Raul: And that's even if anybody buys it.
Brad: Because you're also new, so is anyone really going to take a chance on you? And are you selling to the right places? All that kind of stuff. So we were figuring out how to start this business, and the quickest way, even though it's more expensive, is to start a retail store. So I can't say that we dreamed of having a boutique, per se. We dreamed of having out own line.
Raul: And once we decided we wanted to be a retailer, not a wholesaler, we had to decide whether to open a retail store or one online.
What made you decide to go with brick-and-mortar?
Raul: We went back and forth. I was always for brick-and-mortar.
Brad: And I was always for online because your overhead is way down if you're online. But it's just the two of us doing business strategy, and I couldn't figure out how to say, "Here we are online! Everybody come buy our stuff!" I couldn't wrap my head around how that would work, how that would generate interest, generate sales. I know you can buy advertising and marketing, but I think at our price point, people want to feel the merchandise. Even if it's just one store in Williamsburg, they need a real place behind it.
Raul: And for me, I've worked in brands where we were launching a new brand or an extension of that brand, and it was always said that you need to build customer loyalty. How do you build customer loyalty? By having great fit and using beautiful fabrics. I think the typical guy wants to put it on, to say "Oh my God, this fits so well."
Brad: Yeah, we were looking for a big impact, fast. We're also self-financed so we couldn't just wait and have another job. We really committed to doing this.
How long did it take between you saying, "OK, let's do this!" and the store opening?
Brad: Five months. Well, OK, that's a lie. We've been together seven and a half years, so at the time the store opened it was a little less than seven. Everyone wants to live the dream of starting their own business and not working for the man, so we had always thought of ways of doing it, but I think we seriously discussed it in summer, right?
Raul: I think we got serious about it in September and October.
Brad: Like, serious serious. And then Raul quit in November. And then we opened the factory, and we opened the store in April.
Raul: In September or October, we started looking for rental spaces, and we signed the lease in September. I was working at Club Monaco and traveling, so it was very difficult. I don't see how anyone can launch a brand and open a store and factory without being completely dedicated to it 24 hours a day.
Brad: Once we signed the lease on the the factory, it was serious. We had to cough up the money, and then we had a date.
Let me ask you about the factory. It's in Bushwick, right? And you make all the clothes there?
Brad: Yup. The only things we don't personally make are the hats, which are made in Philadelphia for us. The scarves are made in Minnesota, same with the blankets. But all of the apparel we make.
How many people work at the factory?
Brad: We have six full-time: four sewers and two floor people who do everything from pressing to cleaning. And then we have a part-time design assistant.
Raul: And then we have a cutter who comes in whenever we need him.
How important was it to you to make the clothes in Brooklyn?
Raul: That was the most important part of the plan. It had to be made in the US, and we could not carry anything that was not. We wanted to make everything ourselves. You know, I have twenty years of experience, and I've been to twenty different countries, and I've seen how production is done, from concept all the way to production. So I knew that I wanted to have control of the quality. For me, a button placement has to be precisely done, you know. I set the button holes on every garment. And all the little tags, things like that. You have to have an eye for detail. These little things mean a lot to me.
In terms of the storefront, was Williamsburg always part of the plan?
Brad: We were a little bit flying by the seat of our pants. We had decided on the factory, and we were still hemming and hawing about wholesale or retail, and we had finally decided on retail. We considered Nolita, and I was convinced that we needed to be in the city. It felt like the city was more where you can establish yourself as a brand.
Raul: But we liked being a brand that you can only get in Brooklyn—Brooklyn-made, Brooklyn-born, only sold here.
Brad: And then we were actually in negotiations for a different space up the street, but it fell through because we were a new brand and they didn't want to take a chance on us. You know how you can look up people's condos and what's for sale online? That doesn't exist for commercial real estate. There's no general master list. So you have to ask every property manager if they have anything, unless there's a sign outside for rent.
So we were asking around, and we found out this place was available. You know, it was Built by Wendy. And it's sort of sensitive—we did not steal this place from her. But it became available February 1st. And we took two months, and actually my parents came for six weeks, and we renovated this place. We opened April 8. It was actually luck. It just all came together.
Raul: Even with the factory space, we just stumbled on it.
Brad: There was another spot at the mini-mall, but there aren't very many small spaces left around here.
Yeah, it's all those big CVS-type spaces.
Brad: And there's nothing on Bedford. Nothing. Wen you have a timelime, you can't wait for the perfect space. You have to jump on what's available. So that was other other limiting thing. We signed the lease, and we knew we had to open April 1st. From December when we opened the factory until April when we opened this, there was no money coming in, and there was a lot of money going out because we had two spaces.
We also had to figure out production—how could we have enough stuff that would be ready? You know, we couldn't just open the store with the five pairs of pants that were ready at the time.
How did you guys come up with the price point?
Brad: We do it based on the cost of fabrics and the cost of production. We aren't picking numbers out of thin air.
Raul: But made-in-the-U.S. brands are very expensive. Because we make our own products, we were able to hit a lower price point, and that was very important to both of us. We're not charging $250 a shirt, and that's the average for a made-in-the-U.S. shirt, you know, $180 to $250m or something like that. We wanted to be more accessible.
Brad: Our goal initially was to try to be a little bit lower. Because we manufacture ourselves, we don't have to fit people's minimums. We can control our costs really well. But then again, we've never run a factory before. Or a retail store! So when we were doing our cash flow statements, we were making these assumptions. You know, when someone goes to the Garment District, the people there say, "Oh, it's $50 a shirt." So you think, "The fabric is this, the production is this, the make is this, so here's my wholesale price and here's our resale price." But we didn't know what our make is—how much it costs to make a shirt.
Did you find it was less or more than you expected?
Brad: I would say for spring last year, it was probably more. But now we're way more efficient that we were six months ago.
Raul: And we're way further ahead of schedule than we were last year.
How do you think of the design of Cadet as it fits into the whole American heritage thing that's been so big in menswear? It seems to me that it's a little more streamlined.
Raul: It is, and I wanted it to be totally different than what's out there. A lot of what you see is like coal miner, workwear, and I love that, I wear it, but I wanted Cadet to be fresher and I wanted to do something that no one has been doing. And I wanted it to fit well, a little slimmer. Brad and I have different bodies. I've always had a hard time finding designer stuff that fits me. So we wanted to be able to fit different body types, from one end to the other.
How did you decide on the branding?
Raul: I wanted it to be something masculine, and what's more masculine that the military? But I didn't want it to be a direct copy of military clothes. I was once driving in the East Village, and I saw a group of young kids and they were all dressed in army green tonals, and I was like "Oh my God, that is the coolest thing I've ever seen." There were five of them, and they all looked military but fashionable, like street fashionable, and that was a big inspiration for me.
Brad: We're really looking at the military influence. We'd talked around some names, and we had a working title that is not what we have today. And then Raul came up with the name, and it just sort of seemed to work. We built this military academy vibe around it. We started looking at vintage West Point things.
There's definitely a preppy influence, too.
Brad: That's the academy part. But the branding, Raul did that.
So Raul does aesthetics and Brad does business?
Raul: We share.
Brad: Our apartment is decorated by Raul. The aesthetics here, even the drop ceiling, that's Raul.
Raul: I design the line, but we both have final say.
Brad: And then I become the merchant, so I'm the one who says "OK, nobody's going to buy that," or "This has done really well in the store, so we should do something similar." That's my input a lot of the time.
So what's really selling?
Brad: We have this pant that's on our mannequins. Raul and I are both wearing it. It's our aviator pant. It comes in a cotton and two wools. It has been our most popular item, I think because it tucks into boots, it has ribbed cuffs at the bottom, it's like a little unique, and you can only get it here. It's not something you're going to find a thousand places. It's $198.
Raul: Which is a steal! There's so much work that goes into it, so much detail.
Are you starting to get loyal local customers?
Raul: We are! People are becoming fanatics. They love it. It has to do with the fit, they know they can come back and fit into that 32 or 36, whatever it is.
Brad: The other thing that happens is that one of us, most likely me, is in the store, so I can talk to them, tell them the story, given them more brand information. So people know about the product, who's making it.
We always do a lightning round at the end where we ask people either/or questions. Ready? Aesthetically, '60s, '70s, '80s, or '90s?
Raul: I'd say late '50s, early '60s.
Beach or mountains?
Brad: I could have answered that for both of us.
Jay-Z or Kanye.
30 Rock or Parks and Rec?
Brad: Neither. Um, Homeland!