Rhone’s CEO Nate Checketts on the brand’s strategic approach to pricing

“Part of the ethos and emphasis of Rhone has always been marrying aesthetic and function,” Checketts said on the latest episode of the Glossy Podcast.

Activewear, or as the brand categorizes it “performance lifestyle,” has been a key driver of Rhone’s business. The category performed incredibly well in 2019, but like every other brand, Rhone was not prepared for the year that followed.

“[The year] 2020 was an enormous challenge for us because the interest swung into active and lounge[wear], and we could not keep those products in stock. We were chasing inventory,” Checketts said. “Not only [were we] not able to get enough inventory to keep up with demand in a typical calendar year, but now, you have supply chain challenges and countries shutting down, too.”

Checketts said the sudden increase in demand and new challenges the team faced helped shape Rhone’s business strategy from there. “As we thought about 2021, we had to start making calculated decisions as to when we thought lifestyle [apparel] was going to come back,” Checketts said.

Below are additional highlights from the conversation, which have been lightly edited for clarity.

Prioritizing comfort in menswear
“Our No. 1 product attribute is comfort. Everything gets tested against that. When we were getting started, we were talking to some famous product developers in the [menswear] space, and they said something along the lines of, ‘We know men don’t really care about comfort or softness in the same way women do.’ And I was like, ‘I don’t think that’s an accurate statement.’ Men are creatures of comfort, and they want to be comfortable. … We’ve kind of taken the approach that men care deeply about comfort [and] they care how soft something is. We want [the product] to be able to perform because men are also historically well known for being very hard on their product. Getting something to be soft and comfortable but durable is a challenge, [but a top priority].”

Inflation’s impact on pricing strategies
“Part of [navigating inflation] is understanding what you can do from a pricing standpoint. ‘What will the consumer bear as part of this?’ We raised the prices on a couple of our key products. It was a difficult decision, but our customers didn’t push back at all. They were understanding and accepting. We are a premium brand, and our prices are already premium, but our customers know we’re not going to sacrifice quality, and therefore, they were willing to pay for great quality products. … We always think about price to value — we feel really good about our price to value. But the other thing is [considering] how we’re partnering with our mills and partnering with our factories. And then we try to be really disciplined about running sales or using discount strategies.”

Taking your time to expand into new categories
“Every time you add a new SKU to the line, that’s another marketing story that your marketing team has to tell and another SKU that your planning team has to figure out how to buy. When you add in a style, it’s usually not just one SKU, because you have that across multiple sizes and multiple colors, and that takes place on your retail floor. It is a challenge because, especially in the world of apparel, when you’re selling to wholesalers or you’re thinking about how this shows up in a retail store, you really have to plan. In general, where I think [Rhone] has made the most mistakes is when we try to do too much too fast. Then the customer says, ‘I just really liked them for this one thing,’ or ‘I wish they did that one thing and more colors or more options.’ We try to remind ourselves [to take our time,] but it’s hard.”