Brothers Lyndon (left) and Jamie Cormack of Herschel Supply Co.Trevor Brady
Of course Herschel Supply Co.'s head office is located in Vancouver's gritty Railtown neighbourhood, where outreach centres lie just a few minutes from pop-up stores selling "performance" denim you can wear to yoga. Of course it's in a cool industrial loft space. Of course there are Monocle magazines—as well as in-house magazines that look like Monocle magazines—positioned on a shelf near the entrance. Of course the place is staffed by hip young people, as well as slightly older people who are dressed like hip young people. Of course Herschel hired 20 people in the past two weeks, is outgrowing its cramped space and is taking over an 11,000-square-foot office a few floors below. Of course I get lost trying to find it, and then spot two Herschel-bedecked hipsters—like birds circling an oasis—and instantly know that I am in the right place. Were they dedicated, Herschel-wearing Herschel employees, or just young people who happened to be wearing Herschel near the epicentre of the global Herschel phenomenon? It's hard to tell. Everyone seems to be wearing Herschel these days.
The company, which was founded in 2009 by brothers Lyndon and Jamie Cormack, has come from nowhere to emerge as the wildly successful global bag company of the Instagram generation. It is the not-actually-vintage vintage company, whose signature hand-drawn "Herschel Supply Co." logo tugs at everyone's nostalgic desire for something classic, while being affixed to bags that are both deceptively simple and modern. It is, at its core, a fast-fashion company—like H&M—whose bags are far from cheap and far from expensive, but so stylish and so numerous that they are bound to appeal to somebody. It is a Canadian company whose branding is amorphously global; a company named after a rural town in Saskatchewan that feels, at the same time, unambiguously urban. Herschel is the bag company of weekend Airbnb jaunts to New York and Tokyo, of university students and young professionals. They even have a kids' line.
The company is private, and neither brother talks about hard numbers. But they will say that Herschel has always been profitable, outside of year one, and saw 75% growth in sales between 2014 and 2015. It now has 70 employees in Vancouver and three in a design office in Los Angeles—although the majority of the design work is done here in Vancouver and led by Jamie (Lyndon is the sales and marketing guy). Herschel now sells in around 70 countries and is distributed through a network of 7,000 retailers. "We're under $100 billion in sales," Lyndon says sarcastically. "I'm just kidding. Don't write that."
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The Herschel phenomenon is hardly an accident. It was highly planned by two brothers descended from Scottish immigrants to the town of Herschel (population: 30). They grew up as best friends and played pond hockey together (Lyndon jokes that he is "younger than Jamie, and stronger and better-looking"). Both of them live in North Vancouver, barbecue together, own boats they take out together, and play beer-league hockey on the same team. Before founding Herschel, both worked for global fashion/lifestyle brands. Lyndon, now 40, worked at Vans, the purveyor of iconic skateboarding shoes, while Jamie, 41, worked at K2 Sports, an outdoorsy, West Coast company in Washington state (that also happens to have been founded by two brothers).
"Jamie's always been my best friend. He's a pretty easy guy to work with, though I don't know if he'd say the same of me," Lyndon says. "We're best friends first, brothers second and colleagues third.…We celebrate each other's strengths, and we come to each other when we know we need help."
Lyndon and Jamie, having meticulously designed their logo, created some rough prototypes and took them to the Agenda trade show in New York in January, 2010. One of them was the heritage backpack, with which Herschel has since become synonymous: a slightly rounded top, a square pocket on the front with a woven logo in the bottom right corner. Orders came in from retailers like Nordstrom, Urban Outfitters and Need Supply Co. The brothers had to double the orders they got just to hit the minimum runs required by the factories. "We were definitely, back in the early days, hoping the product sold," says Lyndon. "And hope strategies aren't the best ones. It was sort of hope and pray."
But soon the first sales reports began trickling in. Stores were well on their way to selling out. "We knew the product was right," Lyndon says. "It was pretty exciting," Jamie cuts in.
Part of their success has been in how the brand was conceived. Both say they saw a clear gap in the market. "There were really good mid-to-high-end and high-end options, but we didn't think there was anything that had a really great value proposition and the design-driven attributes that we were into," Lyndon says.
Lyndon, trim and clean-shaven and sitting behind his desk in a fuzzy light-grey crewneck sweater, has often compared Herschel to a shoe company that makes bags—a lifestyle company whose brand immediately says something clear about the person wearing it, like wearing Vans says you're into skateboarding. But Lyndon and Jamie are aiming well beyond a niche, and it's obvious when I ask them to describe the typical Herschel customer. Lyndon says it is "someone who celebrates design, someone who's creative, someone who appreciates utilitarian products." He goes on: It's also members of the "creative class," and "people who like to march to the beat of their own drum," who "celebrate their own individuality," but who also "celebrate their own cities," "are passionate about travel," and "who are passionate about discovering new places, whether that's around the corner or abroad."
Because this is 2015, and because this is Herschel, one of the stats the company hands over to show its size is Herschel's social media footprint: 636,000 followers on Instagram, 327,000 on Facebook, 36,000 on Twitter. Its Instagram feed is a lesson in effortless branding, in creating an atmosphere around products. A woman sitting on a concrete outcropping in Istanbul, Herschel bag visible, staring at the minarets over the dark blue waters of the Golden Horn (15,600 likes). A beanie-wearing man—with a Herschel bag, of course—in red Adidas on a vintage bicycle in Copenhagen (14,200 likes). Some posts are people-free, like one of a black Herschel backpack with a speckled blue pocket (11,500 likes, and one comment, among many, that reads: "how can I get herschel stuff in jakarta?"). There are some photos—a young woman on a scooter in a ladybug-patterned helmet, a brilliantly white colonial street corner in Singapore—that don't even have Herschel products in them; others are short, choppy stop-motion videos of items (including Herschel accessories) magically packing themselves into a Herschel duffle.
"People travel," Lyndon says. "Whether it's from here to work, or, you know, from here to the local Whole Foods. People require bags for whatever they happen to be doing."
Jamie, who has joined us in Lyndon's office, cuts in. "Even toiletry bags," he says. "Every category is growing so fast for us. Definitely backpacks were the thing that got traction for us, but everything else is catching up."
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On a Thursday afternoon in August, Herschel's third-floor office is buzzing, at a time when most offices have emptied out to celebrate the two months of the year it does not rain here. The office is also overflowing, perhaps predictably, with bags. One hallway is littered with them. But they are not this season's bags. They are pre-production samples for fall 2016, fresh from a factory in China, and a young woman is going through them meticulously. She is conducting what is known as a "spec check," ensuring that the company's designs are being executed perfectly before its operations people tell the factories to go for it, and begin manufacturing millions of items that will be shipped to retailers around the world. Few details are too small to escape notice. "Just as I was leaving the office, we were agonizing over what shade of orange we were going to use for a new print for fall," Lyndon says, as he drives home to North Van. "Is it too peachy? Is it too bright?"
Herschel does highly specific design collaborations with retailers around the world, and with brands like Coca-Cola and Walt Disney Co., and puts specific products in specific stores. It is all part of an operational strategy that might be called, to borrow a sports term, "flooding the zone." Herschel sells roughly 5,000 products in any given year, many of them simple bags that are only subtly different from each other. Though you can always recognize a Herschel bag—that logo, the vertical straps, the simple pocket—you never seem to see the exact same Herschel twice. This was deliberate from the start.
"We were going to be really hard to compete against, because we have so much to offer," Lyndon says. "For consumers, they have individuality. And the retailers can also offer something unique."
Making something stylish and affordable, without also making it look cheap, more than a year in advance of actually selling it—around the world, in dozens of markets—is no small feat. Of course, because the Cormacks live in the world of fashion trade shows, employ trendsetting designers and compete against other companies doing the same, coming up with something cool a season or two in advance is par for the course. It's the operational side that requires extra effort. Jamie flies to China, mainly Shanghai, as often as six times a year to visit suppliers and manufacturers. And he has a close relationship with them (some even came over for his wedding). There is also plenty of experimentation with raw materials, like rubber and other leather alternatives (faux-leather, as Nordstrom's online store refers to it). They also take fabrics from other industries—such as a puncture-resistant fabric Lyndon refers to as "seal tech"—and use them in bags. That said, they do not simply make a bag and hope it sells; Herschel looks at the market and tries to figure out where a prospective bag should be selling, and then designs a product before someone else does.
"We reverse-design every bag," Jamie says. "We look where we need to be in the marketplace and design to that price point—the right feature set, the right materials. We both have a pretty strong understanding of what was working in the market, what didn't work, where the hole was—and where we could set ourselves up for success."
Lyndon jumps in. "Our range—bags, specifically—goes from $40 to $300, and our key price points tend to be around $100 and under. And that's where we have it. So, you know, when Jamie talks about reverse engineering..."
"Reverse design," Jamie corrects him.
"Reverse design, okay, sorry, reverse designing," Lyndon says, continuing in a slightly sarcastic tone. "So as we reverse-design products—I f---ing hate that!"
He laughs and tries again. "As we reverse-design products, we know there's a whole bunch of our consumers—let's take someone who's going back to school. We know their price point, and the feature set they need, is not going to lend itself to a $200 bag."
Herschel's vast array of products and price points requires a lot of flexibility in terms of manufacturing. Lyndon and Jamie, ever since they founded the company, have worked exclusively with one small company that manages their supply chain. It has grown along with Herschel and only works for them, co-ordinating the raw materials (zippers and fabric) from 40 or 50 factories, and managing the 26 facilities that churn out Herschel products full-time. "We don't really mention who it is," Jamie says. "It's basically an extension of Herschel Supply."
Many of those factories (all audited for sustainability and regulatory compliance by supply-chain giant UL) have been with the company from day one. Lyndon seems proud of that and makes sure the factory owners know Herschel's broader catalogue, what products might be coming and why things are done a certain way. He says it helps them believe in the Herschel vision. "We're friends," Lyndon says.
Maintaining the same exacting standards is sometimes tougher now than in the early days, Lyndon says. "Because when we grow 30% or 40% on top of the current numbers, it's a huge number. You're adding millions of units."
Although impressive by volume, some doubt how this sort of strategy can yield decent profits. "Herschel has cleverly blown up a segment of the bag-accessory area that they will own with their vast assortment," says Wendy Evans, a Canadian retail consultant. But "while they can own the segment, manufacturing and stocking so many products makes achieving economies of scale very challenging. It becomes almost a custom business, but at their low prices, the gross margin would not seem high enough to generate a good profit."
Still, at least as Jamie tells it, there have only been a few hair-raising experiences as the company grew. "More hair-raising would probably be all the Chinese food I had to eat over there," Jamie says. "Because I was there so much, building the team out, really digging in. I've spent days and days and days over there to make sure everything was perfect."
"Operationally, both Jamie and I worked for large companies before this, in a sales capacity, but you could always count on the back-end support getting their products to the retailer or the end consumer, on time, all the time," Lyndon says. "We can't show up late now, either. And the volume's significantly higher. So it's more challenging than it used to be. Shipping millions of bags versus 10,000 bags is very, very—I should say products, not bags."
Both brothers are trying to shake the habit of referring to Herschel as a bag company.
"The backpack is definitely our hero product," Lyndon says. "But we're a hell of a lot more than backpacks in relation to the composition of our sales. The wallet business is a great business for us. Headwear is great. Duffle bags are huge. Luggage. Everything from hip-sacks to totes to, you know, other bags."
The company is expanding, and continues to rack up partnerships with valuable global brands. They now sell their bags and laptop sleeves through Apple's highly curated stores and online, including Apple stores in China, which is the next chapter. So far, Herschel has only established a couple of small tastemaker relationships, such as with Lane Crawford, which sells high-end brands (Jimmy Choo, Givenchy and so on) into Hong Kong, Beijing, Shanghai and Chengdu.
"Although we sell in all the surrounding countries around China, we're really still strategically coming up with a plan for how we're going to execute the business in China. You have one chance for a first impression, and when we enter the Chinese market, we're going to make sure the first impression is on point," Lyndon says. "We're just scratching the surface."