How a home storage solutions startup navigated the transition from DTC to HomeGoods and Kohl’s
Ben Spivack, a New York entrepreneur born into five generations of basket makers, took the leap to launch his own brand in 2020. His company, Folden Lane, began selling vegan leather storage systems through a direct-to-consumer model.
Spivack focused heavily on sustainability, bringing to market a storage system blending together recycled leathers and recycled plastics delivered to doors in flat-pack form. It was aimed to reduce packaging waste and carbon emissions. The initial production batch sold out in 30 days, with $100,000 in sales, Spivack said, adding that the company raised $1 million from around 50 angel investors. That allowed the company to build out its supply chain and product lines.
The brand caught the attention of specialty retailers very quickly, beginning its entry into wholesale. That started with specialty retailers including West Elm, Crate & Barrel and Saks Fifth Avenue. While wholesale was always part of the brand’s roadmap, as consumer habits changed to focus more on value, Spivack realized the brand would need to shift into mass market and off-price.
Challenges in DTC with customer acquisition, inflation and inventory liability led Folden Lane to focus even more on wholesale around 2023. Now, wholesale makes up almost all of the startup’s business, now in about 10,000 stores in total. It has since launched nationally in stores including TJX’s HomeGoods and HomeSense, as well as Kohls. Two months ago, Folden Lane launched nationally in BJ’s Wholesale Club. The company grew around 500% in 2024 as it diversified and additionally expanded its supply chain with partners outside of China in the Philippines, Vietnam and India.
Folden Lane has raised four rounds of financing to fuel this transition, including a new round in December, according to Spivack. He said, in total, the brand has raised close to $3 million.
“Now that we do almost 100% wholesale, our mission is to basically create value and success for our retail partners, and we are relentlessly focused on ensuring their success,” Spivack said. “We do that by looking at the market and doing store visits every single week, looking at competition, constantly innovating and constantly learning lessons from our previous shipments.”
Folden Lane’s struggles in DTC have not been unique. According to Gartner, 70% of consumers prefer making home-improvement purchases in stores versus online. Additionally, rising consumer expectations on customer service and personalization have resulted in higher costs for operating and maintaining DTC experiences for consumers, Greg Carlucci, senior director analyst for Gartner, said in an email.
“As the digital landscape becomes more saturated, the expense of attracting new customers online has surged, making DTC channels less economically viable,” Barry Thomas of research firm Kantar said. “Relying solely on DTC strategies can restrict a brand’s exposure, whereas wholesale partnerships offer access to broader audiences through established retail networks.”
Folden Lane built its retail presence brick by brick. Its presence in specialty retailers like West Elm and Crate & Barrel caught the attention of buyers for bigger retailers. Spivack also did extensive research to scout out the primary buyers for the right category at the right retailers.
“A lot of it was just cold outreach through LinkedIn messages, emails, phone calls,” he said. “That’s what landed us with at least the first meetings. After that, it was really up to us to be able to articulate to them how truly fundamentally different we are as a vendor compared to the rest of the pack and what really set us apart.”
Folden Lane’s pivot required a reinvention of what the brand was — including creating new product lines for wholesale — and a lot of flexibility, Spivack said. He spent about nine months in late 2022 and 2023 researching the market and building out a three-tiered product differentiation strategy, with one product line serving specialty retail, one serving mass retail and another for off-price. He found one of the white spaces in the market was in vegan leather, a material he said did not previously exist in storage. He also pitched the brand as an opportunity for retailers to derisk out of China.
The company had to reinvent its operating model, only producing inventory for confirmed purchase orders from retailers, whereas, with a DTC brand, there was more risk of keeping too much inventory on hand. The brand, as a wholesale business, also no longer has to pay digital marketing agencies for paid ads and customer acquisition.
“It was really a reinvention of how we thought about managing and producing inventory to reduce our liability and risk, and also how we thought about how to acquire customers at scale, leveraging the significant number of stores that all of our retail partners have,” Spivack said.
With fewer mass-market home goods retailers still in business following the closure of Bed Bath & Beyond and other retailers, Spivack and his team had to navigate the competitive landscape carefully. “The reason why we decided to position ourselves as a strategic, valuable vendor to a TJX or to a BJ’s Wholesale Club was because we had the foresight to see that there was going to be a lot of adversity for the mass market,” Spivack said.
Spivack said that since the closures of retailers like Bed Bath & Beyond, competition has increased in both off-price and in wholesale clubs as home goods brands have had more limited options for wholesale expansion. Additionally, he said many retailers have turned to direct sourcing from factories, adding additional pressure on brands.
“I attribute a lot of the success that we’ve seen to really not looking to competition for inspiration, but instead looking inward and also looking around the world,” Spivack said. “We pride ourselves on truly being trendsetters and bringing to market things that consumers didn’t even know existed or would be interested in buying.”