It’s been an incredibly busy few months for us at Trace, and after careful deliberation it’s time to announce some big changes. Today we are relaunching all our brand communications and retail strategy, and officially becoming a luxury brand that will work primarily with a community of stores across the world. The change will come as a surprise to many, and we wanted to make sure you were the first ones in finding out and to explain what brought us here.
As many of you know – especially the ones that have been with us since the very beginning and supported our Kickstarter campaign – we created Trace Collective with the sole purpose of driving environmental regeneration. Trace Collective is here to change the interactions between fashion industry and nature, something that we’re doing by producing unique, circular products with fabrics sourced from regenerative agriculture. We have developed what we believe is an incredibly powerful model, and over the course of the past 2 years we have built a really strong supply chain that brings together a network of regenerative farmers and artisans that share our view for an industry that is not only regenerative, but also fairer, using every bit of demand for new clothes to create positive social and environmental impacts.
Setting up this model was, as you can imagine, full of challenges. The fashion industry has been designed to work in a radically different way – pinned on opaque supply chains and cutting corners around planetary and worker health to increase profits. But however hard developing an alternative model was, the reality is that our biggest challenge to date has been to find a suitable pathway to grow at the speed we wanted. That is, at the speed that the current climate crisis requires us to grow. If we remained a small brand, we would never be able to generate enough demand of regenerative agriculture to tip the scales, and our platform to push the industry to change its practices would be too small. Our farmers require bigger purchasing orders for regenerative crops, and while we’re developing a network of partners to place joint orders and share regenerative fabrics, we need our own purchasing power to be bigger.
For the past two years, we have been operating as a direct-to-consumer (B2C) brand. We were always aware that our production prices would be high compared to the industry norm, and sacrificing our impact model to bring them down was never an option – and will never be. We are very clear about our mission – we make clothes to regenerate the planet. Producing cheaply means that we cannot do that. We always knew that a B2B model (selling our pieces to other stores) would be an easier way of building the brand, but we also knew that it would mean doubling our prices. Stores need to operate with a markup of roughly x2.7 in the clothes they buy and sell to be profitable. We never wanted to price people out of our product and made everything possible to keep our prices low, which meant choosing at B2C model and not working with stores.
In the past year, however, we have learnt a lot. In the current climate it’s just not possible for us to grow quickly with a B2C model. We’ve had some great advisors along the way, and were able to learn from the experience of other brands in the industry who are incredibly successful – small shout out to the dozens of you who have sat down with us and given us their time over the course of the past year. What we have learnt is that for us to grow at the speed that we want through a B2C model, we would need either a very large injection of capital (which would likely require us to sell off most of the company) or to be in a situation that we’re just not – well-connected to influencers that can reach millions of potential customers with our message and products. (Any friends of Beyoncé out there, hit us up).
So we’re changing direction. We have built a team of people with immense expertise in the luxury industry, who believe in our products and in what we are trying to achieve, and who have been incredible at guiding us in this journey. We’re changing our business model to become a B2B brand, and things have been moving very fast during the last months to get us there quickly. We always knew that we were making a luxury product. Our organic linen and hemp fabrics are unmatched in quality and every single detail of the product is taken care of in our production – from using organic cotton thread to hand-stitching buttons. So now we’re moving the product to a segment of the market where it always belonged. Our first showroom is taking place in a few weeks and things are extraordinarily busy preparing for that – but we’re wrapped in an incredible network of old and new supporters and are feeling a wonderful momentum.
We don’t know what the future holds, but we very much hope that this change of strategy will enable us to grow faster and have more long-term visibility about our volume of orders, which will effectively mean that we will be better able to support the farmers in our network and to scale up more quickly the number of hectares grown under regenerative agriculture principles. In our case, more scale truly means more impact.
While things are changing, we remain immensely grateful to the many many of you who are already loyal customers, and we meant it when we said that our intention was never to price people out. So if you already bought a Trace Collective piece, you have access to a for-life early backer discount. That means that you will continue to access our pieces at our previous prices. We hope that this can show our immense gratitude for your support and for believing in a regenerative fashion industry.
Needless to say, the change of direction of Trace Collective, our brand, doesn’t affect Trace Planet, our non-profit. Trace Collective donates 25% of its profits to Trace Planet, and the hope with this change of strategy on the brand side is that we’ll also increase the funding directed to our charitable activities. Our work with Trace Planet remains the same, strongly focused on research and educational activities. We’re wrapping up a summer activity program that was full of workshops and where we ran a really powerful event with some kick-ass activists. More on this on our next newsletter, so stay tuned!
Thank you as always for following our following our journey,
Antonia & Aroa