How Bedrock is overhauling operations at Filson and Shinola as it seeks to become a platform company

He brings over 40 years of experience in DTC brands, previously serving as CFO at Smile Direct Club and CEO at American Blind and Wallpaper Factory. Kevin Wertz, who had worked alongside Katzman at Smile Direct Club and was CEO at ad firm Campbell Award, also joined Bedrock as CMO.

Now, the newest iteration of Bedrock aims to become a “platform company,” akin to the operations at Tapestry or LVMH. It’s a designation that seeks to go beyond that of an investment firm by moving the companies from sisters in name only to sharing technology resources or sales operations.

“Anybody who’s interested in owning multiple brands, in my opinion, would be crazy not to think of a platform to leverage back-office operations, but also some front-office [operations] to optimize the performance of the brands across the portfolio of companies,” Katzman said.

Recent moves include putting all e-commerce operations on Shopify, unifying the wholesale sales team and exchanging more customer data. Filson, for instance had a system in place for customer data capture that the brand says has proven successful at getting people to follow through on purchases — particularly with getting customer phone numbers for SMS subscriptions. The brand has seen annual growth of 40% over the last five years. But those same CRM services weren’t being used at Shinola.

“We brought that to Shinola and, in a very short period of time, saw the success that Filson has been seeing,” Katzman said. We’re now starting to bring the brands together, and there are certain things that one brand is doing really well from a marketing perspective that is now we’re engaging those folks with the other brand.”

Bedrock’s new direction is exemplary of a larger trend. More companies and investment firms are looking to operate like a platform, one that manages multiple direct-to-consumer brands as venture funding becomes harder to come by and valuations plateau. Another example is Pattern Brands, which runs seven companies including Onsen towels and Poketo accessories. Unified Commerce Group, launched in 2019, has a centralized tech stack that underpins operations for five brands including Bohme, Spiritual Gangster and the recently acquired Greats, a footwear brand previously owned by Steve Madden.

Looking ahead, Bedrock aims to acquire more brands while growing Filson and Shinola. While Katzman and Wertz didn’t share any specific names of brands they would be looking to acquire, the original focus of Bedrock was niche apparel brands. Both Shinola and Filson focus on a high-end customer that isn’t necessarily trend-driven but is instead looking for high-quality products that tilt toward American-made or invented.

In the meantime, growth and experimentation are the focus as the brands look to acquire new customers. Filson is coming off the launch of its first-ever women’s collection and is poised to unveil the second half of the line next month. Shinola is planning to open a second hotel in Indianapolis, and Bedrock hinted at a future similar concept for Filson.

Katzman also hopes to scale each brand’s wholesale reach. Each team used to operate separately, but this summer started reaching out as one to potential buyers. “Now we can go in with a unified message — if it’s to Neiman’s or Saks or Public Lands — who are interested in products from both brands,” he said. “We can talk to them with one voice.”

As Bedrock gets its new strategies underway, similarly positioned companies have been growing. Dustin Jones, CEO and co-founder of Unified Commerce Group, has spent nearly five years growing and scaling its family of brands. Collectively, its brands operate more than 30 retail stores and work with more than 200 wholesale partners.

Jones came from the private equity world and saw how funding could dry up and leave brands without support. But he saw potential in medium-sized consumer brands that wouldn’t necessarily become multi-billion public companies but still see healthy growth — especially if they could operate off of a common back-end infrastructure owned by their parent or the third-party contracts it pays for.

“As their businesses got more complicated — more categories, more channels, more logistics partners, more supply chain partners, more payment gateways — there were a lot of ways in which the system could break,” Jones said. “The day we buy the companies, their P&L gets much stronger because they’re sharing a parent contract with the other children in the family.”

Acquisitions, though, come with growing pains. Company data may not be unified or held under one department, and the fragmentation can make it difficult to gauge performance analytics. Its yoga and activewear brand Spiritual Gangster, for instance, would take at least a day to pull inventory insights. However, the Unified Commerce Group system implemented automatic, real-time reporting, allowing the company to respond quicker if something sold out or if there was an opportunity to increase sales of a certain item based on a trend or pop culture moment. “In every case of every business we bought the information was wrong,” Jones said.

Greats, its latest acquisition, is a Brooklyn-founded sneaker brand known for sleek styles that launched a women’s line last year. Jones said the acquisition fit from a size perspective but was an example of the type of brand that may have gotten lost within a larger company like Steve Madden. “Greats was a classic example of [how] big company solutions don’t really play well inside small company needs,” he said.

Once settled, Jones said it’s important to ensure each brand continues to have its own identity and doesn’t become too watered down. “It’s our job to extract that, sifting through things to say, ‘Are you a durable, sustainable brand that evokes a customer emotion and has maintained its customer relevance?'”

Over at Bedrock, each brand will continue to have its own brand identity and marketing creative, including distinct chief creative officers. Kevin Wertz, who joined as CMO at the same time as Katzman, said there’s potential to grow each brand by focusing on showcasing the individual brand stories. The recent women’s launch, for example, included a subway station advertising stake hover near its store in New York City that showcased the new pieces from a photo shoot in the American West.

“We can’t just show up as a clothing retailer and a watchmaker brand. The world doesn’t need another one of those,” he said. “The origin story for Filson and the origin story for Shinola are incredible, and we can’t lose that.”