Nicolaj Reffstrup made a difficult decision in 2023 that would cost his business half a million dollars in income annually, reported Fast Company.
In his capacity as cofounder and CEO of the stylish Danish fashion brand Ganni, he witnessed the company's $825 cowboy boots soar to the top of the sales charts. Cofounder and creative director Ditte Reffstrup, his wife, used the boots in unexpected combinations, like with cargo trousers or joggers. All of this was a result of the brand's audacious, irreverent style, which had gained a cult following and helped Ganni reach a $700 million valuation. In 2017, luxury private equity firm L Catterton acquired a 51% share in the company.
Nicolaj concluded that despite the boots' success, Ganni had to discontinue producing them in the popular hues of tiger's eye brown and cherry red since they were extremely harmful to the environment. Nicolaj remembers, "We couldn't figure out how to dye the boots in a nontoxic way." Therefore, we decided to stop producing them without providing a substitute. You'll need to make some truly tough choices if you're serious about building a sustainable business.
The episode perfectly captures Ganni's philosophy of sustainability, which Nicolaj and journalist Brooke Roberts-Islam co-wrote in their recently published book, The Ganni Playbook: How to Get Started Creating a Responsible Business. The book explains that fashion executives who want to create ethical companies have to be prepared to put pricey, environmentally friendly products ahead of profit. "No customer is prepared to pay more for sustainability," claims Nicolaj. "You must give up margins."
However, Nicolaj thinks it's feasible to create a lucrative, rapidly expanding, environmentally conscious company. In the end, he contends, doing so is essential for sustainable fashion brands to grow and displace fast-fashion companies that pollute the environment, such as Shein and Temu. Growth is necessary "as long as we're still in the dynamics of a market economy," he claims. People will quit making investments in the green transformation otherwise. Although I would like to completely overhaul the system, it is not going away. | BGNES