Faherty Brand: Alex and Mike Faherty. How Jersey Shore + Manhattan Chic grew to 80 stores.
with Alex and Mike Faherty
Executive Summary
Alex and Mike Faherty recount years in finance and garment design before launching their family apparel brand. Early online sales disappointed; a traveling display and wholesale accounts gave them different feedback. They describe financing inventory, finding a repeat-selling product and developing catalogs and stores. COVID shifted demand online, then aggressive store growth brought hiring and margin problems, including a later layoff. Their channel mix and recession leases are historical choices, not a funding or expansion template. Revenue, store and investor figures describe the interview, not independently audited current facts.
Key Takeaways
Takeaway 1
The brand began as Mike's junior-year college essay - 'Coast to Curb,' coast quality meets city style - and the twins spent 12 years deliberately preparing: Mike (Wash U fashion design, the only man in the program, sewing through the night after basketball road trips) into Ralph Lauren kids then men's, mostly Double RL; Alex (Yale, football) into finance, reselling Marshalls finds on eBay on the side, always telling his future wife freshman year he'd start a clothing company with his brother.
Takeaway 2
The brothers' paths out were opposite apprenticeships: Mike's Ralph Lauren years were an engineering one - four Hong Kong trips a year at 23, dissecting 1930s garments down to yarn size and wash, 'you become a garment engineer' - with the factory relationships that later supplied Faherty's first investor; his readiness test: handed any antique fabric, 'I just knew I could make it... if I can do it here, it's go time.' Alex's exit was the harder call - a mentor called the plan 'the dumbest thing I've ever heard,' and his late father had counseled keeping the finance career and just bankrolling Mike; Alex's verdict now: 'you can get two forms of advice and they're both right... you got to pick what's best for you.'
Takeaway 3
The first product was engineered, not just designed: board shorts from Unifi recycled polyester blended with 17% cotton ('trial number six') so they felt like regular fabric but dried like surf shorts - premium surf at Vilebrequin-adjacent prices, a gap between $69 Quiksilver and $250 French trunks.
Takeaway 4
The 2013 playbook: $150,000 first inventory deposit, $1M raised from 44 friends-and-family angels ($5k-$100k checks), website launched from a San Juan surf trip - then crickets, until the custom hydraulic 'beach house on wheels' trailer (mom helped design it) toured 35 days in a U across the country, selling $1,500 on the roadside at Big Sur and doubling as their trade-show booth on Mercer Street.
Takeaway 5
The brothers say wholesale economics and available financing influenced their channel mix. Factoring costs, retailer orders and market comparisons are their historical account, not current terms or proof that DTC cannot work without venture capital. Inspect recourse, fees, payment timing, returns and concentration before comparing channels.
Takeaway 6
They describe stretched supplier payments, consulting income, a successful shirt and later COVID demand shifts. Delayed payment is not a financing recommendation: obligations do not change without agreement. They also describe a customer becoming an investor; no unverified identity is added.
Takeaway 7
The honest coda: revenue-focus over margin after COVID meant over-hiring and a ~50-person layoff in 2023 - 'the hardest thing we ever had to do'; today 81 stores, a profitability model with 'margin of safety,' tariffs managed by owning the fabric 'recipe' so production can move countries; a minority stake sold but no exit wanted - 'There's not a world if we had it in our own control that we would sell the business' - and the grind as the answer to luck-vs-work: 'It's the grind... fashion's like a hamster wheel.'
The Conversation Breakdown
Twins, race car beds and a college essay
The speakers recount: Youngest of seven, Jersey Shore surf childhood, the move to New York City; Mike's fashion awakening through his dad's tie closet and Bergdorf cashmere, the junior-year essay inventing 'Coast to Curb'; Alex telling his future wife freshman year he'd start a clothing company with his brother; sports in parallel (Alex football at Yale, Mike basketball at Wash U as the only man in the fashion-design program, sewing all night after road games); mom's line that even as babies they ended up in each other's cribs.
The 12-year apprenticeship
The speakers recount: Mike's eight-plus years at Ralph Lauren - a year in kids, then men's design, mostly Double RL - becoming a 'garment engineer' on four Asia trips a year, and the factory friendships that later seeded the brand; Alex in finance ('make as much money as I can and learn as much as I can'), eBay resale experiments, dressing from Mike's employee discount; the monthly Sunday brand meetings; two years failing to name it before settling on their last name; Mike's readiness test ('if I can do it here, it's go time'), his 2012 resignation, and the round-the-world factory tour to announce the plan.
Leap: board shorts, 44 angels and a $1,000-a-day bar
The speakers recount: Alex's mentor calling it 'the dumbest thing I've ever heard'; his late father's caution and the two-forms-of-advice resolution; Kerry's midnight 'you got to do this'; February 2013 resignation; the $150,000 first inventory deposit; the $1M angel round across 44 checks; the fabric engineering - Unifi recycled polyester with 17% cotton, trial number six; launching the site from a San Juan surf trip in April 2013; early press spikes then crickets against the $1,000-a-day survival number.
The beach house on wheels
The speakers recount: Food-truck inspiration, Mike's not-plug-and-play custom trailer (hydraulic sides, reclaimed wood outside, birch inside, mom decorating, an architect friend advising); the 35-day U-shaped cross-country run - retailer parking-lot events, a Charleston festival between food trucks, a flat in Shreveport, lost keys in LA, and $1,500 sold to a dozen pull-overs on the PCH at Big Sur; the trailer doubling as their trade-show booth outside the New York show on Mercer Street; ~$350-365k first-year DTC against a $400k goal - and the realization that in-person, not online, was where strangers bought.
Wholesale-first: the contrarian cash-flow machine
The speakers recount: The 10-K study (Ralph Lauren, Coach, Louis Vuitton) behind the all-channel business plan; their comparison of DTC acquisition costs with available wholesale financing; factoring - PO financing at 10-12% and invoice advances - as the working-capital engine; Nordstrom (10 stores) and Barneys (4) in season one; Japan at ~40% of year-one wholesale via Journal Standard, United Arrows and another retailer whose ASR-rendered name is not verified; Fred Segal Santa Monica giving them real space; specialty-store owner-sellers as the real movers; the plaid shirt as the first self-selling department-store product; Alex's Sarah-Blakely-style rack visits and salesperson evangelism; year two at 75% wholesale; the Thompson Street 200-square-foot pop-up that ran three years; and the holiday 2015 print catalog - their first paid media - inspired by J.Crew killing its own.
Knife-edge years, a hero product and the Nantucket angel
The speakers recount: Constant cash-outs against the inventory cycle; payables stretched 60 to 90 to 120 days while projecting positivity; Alex's two-month consulting return to his old investment firm when the money ran out; the Legend Sweater Shirt (developed ~2015, launched 2016) as the first product that 'evaporated' in store and proved the DTC engine; the cold email to hello@fahertybrand.com - 'I bought some shirts in Nantucket. They're great shirts. If you ever looking for money, let's talk.' - from the still-unnamed customer who became their first meaningful outside investor; and the ski-trip perspective from venture-backed founders who envied the twins' freedom from hypergrowth.
COVID whiplash, 40 leases and the honest coda
The speakers recount: March 2020: 70% of the business (wholesale + 12 stores) dead, furloughs; May: e-commerce multiplying at 100% year-over-year with stranded wholesale inventory feeding it at full margin; first meaningful profitability summer 2020; resort-town stores up 60-100% on reopening; the advice to close non-beach stores rejected in favor of Ron Shaich's Panera recession playbook (heard on this show) - cheap rent, tenant allowances, second-generation spaces, long terms: 40 leases signed across 2020-21, ~40 stores by end of 2022, 81 today; the 2022 slowdown, growth-over-margin over-hiring and the ~50-person 2023 layoff ('the hardest thing we ever had to do'); tariffs answered by owning the fabric 'recipe' so production can move; a minority stake sold but no exit wanted - Ralph Lauren's keep-what-you-built model; and the closing ledger: 'It's the grind' (Mike) and 'no matter what happens, we're going to figure it out' (Alex) - plus Guy's outro note that the original beach house trailer burned this past summer, replacement in the works.
Core Frameworks & Ideas
Apprenticeship before launch
Editorial synthesis: identify the product and operating skills the business needs, then compare ways to acquire or hire them. Twelve years is their history, not a required waiting period or a reason to dismiss specialist help.
Contrarian channel blend
Editorial synthesis: compare channels by contribution, cash timing, customer behavior, support and concentration. A blend can add resilience or complexity; historical large-brand filings are useful questions, not a channel-allocation formula.
Cash-flow engineering for the unfunded
Editorial synthesis: map deposits, production, invoices, payment obligations and cash shortfalls. Compare financing with qualified advice and written supplier agreements; factoring and extended payables carry costs and risks.
Recession expansion playbook
Historical decision, not a recession rule: the brothers signed leases when they saw favorable terms, then later describe overhiring and margin pressure. Stress-test demand, fixed costs, guarantees and exit conditions; low rent does not make a long obligation safe.
Actionable Next Steps
- ✓List the product and business skills needed for a small launch, and compare training, hiring and partnerships. Confidence alone does not validate readiness.
- ✓Use relevant current filings to learn how other brands make money, then test whether their scale and customer mix apply to your own case.
- ✓Build the complete inventory cash calendar. Compare lawful financing and agreed supplier terms, including recourse, fees and downside; do not rely on unilateral payment delays.
- ✓If physical selling may help, test a permitted, bounded event or pop-up and measure contribution, not just attention. A custom trailer can add expense and is not zero-cost marketing.
- ✓Before any recession expansion, stress-test demand, staffing, liquidity, lease guarantees and closure costs. Favorable terms are one input, not an instruction to sign long leases.
Notable Quotes
“if I can do it here, it's go time.”
“that is the dumbest thing I've ever heard.”
“People love vacation, people love the beach, people love that outdoor lifestyle.”
“We had in our mind that we need to sell $1,000 a day.”
“inventory eats up capital really fast”
“Online no one was interested in us. In person people were interested in us.”
“There's not a world if we had it in our own control that we would sell the business.”
The One Thing to Remember
Use evidence from each channel and the full cash cycle, not a fashionable channel label. The Fahertys’ account includes years of strain and later overexpansion, so perseverance alone is not a sufficient operating plan.