On Monday, Tory Burch surprised 50 women across the nation with a surprise Zoom call to personally congratulate the founders on being selected for the fifth annual Tory Burch Foundation Fellows Program, which supports the empowerment of women entrepreneurs.
The fellowship, which receives thousands of applications annually, provides women entrepreneurs with $5,000 for business education and access to an online community of peers, along with one year of virtual workshops, webinars and networking. Since its launch in 2015, the Fellows program has provided over $800,000 in grants to 130 early-stage women entrepreneurs.
This comes at a time when small businesses are struggling in the wake of the coronavirus lockdown. According to a study by researchers at the University of Illinois, Harvard Business School, Harvard University and the University of Chicago, at least 100,000 small businesses have shuttered since mid-March, and analysts claim this is only the beginning of the worst wave of small-business bankruptcies and closures since the Great Depression.
Burch admits that this has been a difficult time, even for her own company. In late March she was forced to furlough employees and temporarily close about 115 stores across the U.S. and Canada. To stem the devastating impact and revive cash flow during the shutdown period, Vogue reported in April that Burch sent an email to U.S. Treasury Secretary Steven Mnuchin urging the Trump administration to provide relief in gaining back or postponing duties and tariffs, as well as offer federal support for rent relief.
Burch, who claims that her Spring 2021 collection will be smaller and she won't be participating in September's New York Fashion Week, is now helping her fellows navigate the storm. The fashion icon is no stranger to challenges: Just 16 years ago, up against established brands like Coach, Michael Kors and Kate Spade, Burch launched her apparel line from her kitchen table. Now she has more than 300 boutiques across North America, Europe, the Middle East, Latin America and Asia, and her clothing and accessories are available at over 3,000 department and specialty stores worldwide. Last year sales reportedly topped $1.5 billion.
Burch spoke with CNBC candidly about how she is navigating her fashion brand through this crisis, the weighty challenges and huge opportunities that lie ahead for rising entrepreneurs, the new crisis-management measures every company should think about and her view on the changing small business landscape.
What is your personal view on the Covid-19 crisis, especially how it has affected businesses both large and small, and what are some key takeaways you have gained over these past few months?
We have spent the last few months running our company from our kitchen table — just like I did when we first launched in 2004. I had the idea for my business in 2002, after a crisis, and I launched our foundation in 2009 — once again, after a crisis. There is an element of serendipity when looking back. It was not a conscious decision to take advantage of a crisis, but it enabled us to execute on a powerful, unique strategy. When a new normal begins to unfold, customers discover new needs, and we are all open to trying alternative ways of doing things. In turn, innovation is accelerated, and strong companies will emerge even stronger.
And for small businesses, this is a moment to take advantage of your innate flexibility. It feels counterintuitive, but I firmly believe there are great opportunities now in all industries, it's about how agile you are and how quick you can pivot for the future.
How do you see retail changing post-coronavirus?
The relationship with the customer will remain paramount. I believe in stores and the in-store experience, but the industry will certainly evolve. We are already seeing an acceleration of e-commerce; what started as two distinct channels — in-store and e-commerce — is now truly becoming one global omnichannel.
If you were just launching Tory Burch at this point in time, what would you be thinking? Would you be hesitant to move forward?
The most important thing to know whenever you start a new business is that it will be incredibly difficult. You have to be ready for a lot of hard work. Starting a new business is a leap of faith, and what matters is solving a problem in a unique way. Whether or not you are in the midst of a global pandemic, there is no perfect time to launch.
How has your view on entrepreneurship changed, if at all? Do you think people will be more hesitant about starting a small business now?
Now, more than ever, we need entrepreneurs with unique ideas, as well as the determination and resources to see them through. Small businesses are essential to our economy — they account for 65% of net new job creation, contributing to their communities and driving growth and innovation. They are also a critical source of opportunity for women and minorities. Before the shutdown, the U.S. had 12.3 million women-owned businesses generating $1.8 trillion a year with many of these businesses run by women of color.
How has the pandemic affected sales for Tory Burch?
This has been a very difficult time. The fashion industry has literally been shut down, similar to the airline industry. Many of our stores have been closed for months. Navigating through the crisis has been tough but also a tremendous learning experience. We have been careful not to over- or underreact. Having a diverse team and operations in markets all over the world has helped us make the right decisions. There have been a few bright spots — like strong growth in our e-commerce business — and we have doubled down on those. We are using the pandemic as an opportunity to reset, and we are confident we will emerge stronger.
In which ways have you had to pivot during this crisis, if at all?
Running a business from home — much less designing a collection — is not something I ever imagined. Fortunately, we have found new ways of working and it has been coming together. A number of our sales associates continued to work with customers very effectively by phone and online throughout the shutdown. Now that we are reopening our stores, we are offering private appointments as well as personalized and virtual experiences, and curbside pickup is available in select locations. We are making nonmedical masks; as well as doing what we can to help frontline workers. The largest health-care workers' union told us they needed sneakers, fanny packs and easy-to-clean clothing to wear under scrubs, and so we donated 24,000 pieces to the United Heathcare Workers Union. We also donated materials for masks and hospital gowns in a partnership with Catholic Health Services in Long Island, which services six New York hospitals.
What crisis-management measures are you putting in place for your company based on the recent events?
Before the virus began spreading globally, we took steps to protect our supply chain, but we never planned for a global pandemic. Fortunately, we run the business with a relatively conservative balance sheet, minimizing debt, and that approach has served us well.
It's an exciting but uncertain time for these 50 fellows. What new advice will you be offering your fellows based on the coronavirus crisis that you may not have provided in the past?
I've realized more than ever the importance of surrounding yourself with a strong, diverse group of trusted advisors. Whether it's your team, customers or family — being brave, listening and learning from each other is key.
What advice, if any, has changed now?
Know what problem you are solving and the exact need of your customer. This advice is timeless. As you face new challenges, take time to reflect on why you started, what you stand for and how your company can make a difference in people's lives.
Will your fellowship program be changing in any way as a result of the uncertainty the pandemic has created?
The program will be virtual this year, and we will be looking at the topics we have always covered — finance, digital, PR and funding — through a new lens. Facilitating networking and peer-to-peer mentoring is a big part of the program, and I am thrilled our experiences over the past months have taught us that it is possible to create a strong and supportive community without physically being in the same place. We hope to be able to come together for an intense week of workshops at the end of the Fellowship.
Most important, what crisis-management measures do you think are imperative now for those launching a new business?
It is essential to have a solid balance sheet with cash on hand to weather a crisis.
Many sectors, such as online education, telehealth and digital payments are booming now. Hospitality is one of the hardest-hit sectors. What are your thoughts on some of the new sectors that have seen enormous growth during this time, and how long do you think it will be before those struggling will recover?
This crisis makes you think differently. Even in the hardest-hit sectors, new opportunities are available to us that we never could have imagined. We know this will continue to be a difficult time for so many, but I am optimistic that we will be able to rebuild and create a new normal.
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