LG Partners focuses on affordable luxury brands and ultimately globalizing them
After successfully exiting his latest tech venture in 2011, Ryan Garelick was on a United Airlines flight to Shanghai about a week later curious if he could ply his experiences in the fast-paced, rapidly-evolving tech world to an old economy business dynamic facing an uncertain future. Between inflation, currency fluctuations, global trade tensions and the appetites of consumers changing in the wake of fast-fashion brands he understood the dilemma facing Chinese capitalists exporting goods out of China. But as a serial entrepreneur he also understood that pressure breeds opportunity and catalyzes new ways at tackling problems.
After serving as the Managing Partner for LG Partners Group for the last several 5 years, Garelick is now running LG’s spin-off branded fashion firm LG Brands Group Holding, LLC. He said he likes fashion, likes the challenges presented by his work and wants to make the company a large multinational enterprise.
Recently, Ryan Garelick spoke with China Daily about the company’s strategy and its business opportunities in the Chinese market. The following are edited excerpts from the interview.
What does LG Brands Group do? What is the company’s focus?
LG Partners is one of the largest brand companies in the world. We focus on affordable, status US brands and we are globalizing them－brands like Nike, Under Armour, Polo Ralph Lauren, Hugo Boss, Calvin Klein－those are the kind of brands we manufacture and/or have licenses for.
We shifted our model in 2014 and the past two and half years have been good for the company. We have been very focused on our new model, changing our portfolio of brands – getting further into licensing and distribution – improving it and improving our margins.
What is the company’s business model?
We manufacture for and license many brands. After that we control the brands and we pay a royalty. But we design, we produce, we do the logistics, and we act like a brand company would do and we sell, depending on the type of the brand, to everyone or certain types of stores. The higher the brand is, the fewer retail stores we sell to and we may sell lower brands to mass market retailers and department stores.
The beauty of our company is that we have a very wide distribution network and our business is predominantly to sell to other retailers.
What is your opinion about the global market?
The US is the largest market of our business, and the US market is strong, relatively speaking. The economy is good, generally, the US is in a great shape for consumption, and it is the largest per capita consuming country. The unemployment rate is going way down, the interest rate is low.
Europe is in the early stage of recovery and the recovery process will take many years. Our business there is considerably smaller than the US, but we had a very good year in Europe, compared with the previous year.
How about the Asian market, particularly China?
Asia is very new to us, ironically. We’ve been here 25 years, but we always produced here, we didn’t sell here, we didn’t design here. But in the past four years, we have been developing our Asian business and we have offices in different parts of China. Our China headquarters is in Shanghai. Currently in Asia we are focusing on China and South Korea.
What is LG Brands future plan in China?
We are going step by step in China. It takes time to get the right people in China, and to build the right platform, what we don’t want to do is fail. It is easy to say that we can do it.
It is all about people in our business. We are hiring and we are developing people. As our platform is built out more, we will bring more and more US brands to China.
Ultimately, we also want to take Chinese brands to the US, when there are more famous Chinese brands. Our network should not be just one-way; it is going to go two ways to help develop Asian brands in the US and in Europe.
What is your business philosophy?
The one thing I believe in is doing the right thing. So everything you do should be right for the partners, right for the shareholders, right for your employees, right for the customers. That’s very important. In order to get there, I have tried to surround myself with creative problem solvers. I also tend to give people a lot of freedom – relatively speaking – to let them drive value.
My employees and I all know that we are part of a bigger story. We are in this together, and creating something that is bigger than all of us. We are changing something, changing the industry.
In the sourcing business, we changed the industry. I want to change the brand industry and I think all the people around me want the same thing. They are excited about it.
What has led you to your success?
One thing for sure is we all work very hard. Not just me, the whole company, the people around me. Being a good person is also very important. Being honest and always doing the right thing, even if it costs you money, because your word and your name are more important than money.
The more you do that the more you can build your own brand and people believe in you.
The key is not to lose that goodwill.
At the end of the day you only have your brand and your image.
What suggestions would you give to ambitious youngsters getting out of school?
The world has changed a lot. I always believed in being a pioneer in whatever I do. It could be to start something in unserved or under-served new market, or it could be a new type of technology. If you want to go into business, you need to find something that people don’t know they want yet.
Getting into your own business is very difficult. I would suggest students getting out of school at any level go work for somebody first before they start their own business. Youngsters should work hard, they should think for long term, and they may have to work for somebody for 10 years before they have the background and experience to go out and have their own business, because starting a business is very tough.