Lauren James Co.: Not a Startup Anymore

Forced into bed rest in the 30^th week of her first pregnancy, Lauren Stokes read fashion magazines and sketched fanciful dresses that she imagined would be prettier and fit her more realistically than those worn by celebrities and models. Two years later, those sketches have led to the Lauren James brand, a clothing line generating multimillion-dollar revenue for Lauren and her husband, Lance Stokes. They are CEO and COO, ages 26 and 28, respectively. The couple has accepted no outside investment and carries no debt.

Lauren James Co. is undergoing a million-dollar expansion, including installation of what they describe as Arkansas’ most state-of-the-art screen-printing operation inside the company’s 80,000-SF warehouse and shipping facility in south Fayetteville.

By the end of 2015, the company will have grown 4,000 percent since its founding in mid-2013, the couple said, making Lauren James arguably the fastest-growing clothing business in the country, certainly in the region.

“The line does really well in Arkansas, but from day one we’ve been bigger outside the state. It’s been a whirlwind, and we’re still small for how big we are,” Lance said.

The Lauren James appeal is T-shirts that are soft and generously proportioned, with charming, hand-drawn illustrations along themes of sports and state pride. Youthful dresses showcase the back side with sweeping bows and ties. Swimwear features ruffles, bows and retro design.

“We’re the opposite of scandalous,” Lance said of the style.

In spring 2016, the first two Lauren James showcase stores will open in the Dallas/Fort Worth area, showcasing feminine and classic clothing that is fresh but tasteful and appeals especially to women ages 18-24. A line of outerwear with 25 new items will also be released next year — fleece sweaters, rain jackets, and technical hoodies with the same soft fabrics and artistry.

The line will be featured in some Dillard’s stores and online beginning in spring 2016, and the company enjoys 22 collegiate licensee relationships, a number that Lance expects to double by the middle of next year.

“What we’ve done is insane,” he admits.

 

An Unusual Combination

Jeff Amerine of Startup Junkie called the duo “statistical outliers in the startup world.”

“It’s pretty epic to watch — they are tenacious,” he said. “They saw a trend, they understood the segment, and they built a great business rapidly and bootstrapped the whole thing.”

With Lance’s expertise in operations, and Lauren’s eye for fashion and understanding of customer demographics, they hit on all cylinders.

“They’re an unusual combination,” Amerine explained. “He’s one of those guys who figures things out. She’s done a fantastic job using online intelligence to determine what the young ladies in their demographic are wearing, and she’s a perfect embodiment of the demographic they’re selling to. It’s a good case study in the fact that there’s no replacement for hard work and becoming a self-made expert.”

Amerine noted that Northwest Arkansas has more than its share of success in the apparel industry.

“We have outsized talent,” he said. “The owner of Riffraff was written up in Inc. Magazine as a 30 under 30 nationally. She turned a pedestrian boutique into juggernaut business. Country Outfitter. Fayettechill. Houndstooth. Junk Brands found a niche, invented its own processing equipment to solve production challenges. We have the right sort of petri dish of talent here because of our retail supply chain expertise and people who understand sourcing and wholesale.”

 

The Back Story

Lofton James Stokes was born weighing 5 pounds in the spring of 2013, after his mother spent eight weeks in bed rest. Lauren loved her former job as an operating room nurse but wanted to break away from the long hours and working holidays — and she was growing confident in her apparel vision.

Lance was between jobs. After graduating from the University of Central Arkansas with a business degree, he had worked in retail, as a night transporter at J.B Hunt Transport Services Inc., and then he had a couple of unsuccessful apparel ventures of his own, including selling bow ties.

“Failure is the ultimate motivation,” he said. “I had taken classes in business management and sourcing, but ultimately there’s no class on this. To try it is the best education, and I was learning the mistakes.”

Lance coached Lauren, “To be successful we have to be first, best or different.”

They noticed several men’s Southern lifestyle brands on the market but saw a void for women. They began envisioning a niche: Clothes that make you feel good. Fresh and new, but classic and refined, still tasteful. They started with T-shirts and, as a nod to the genesis, put Lofton’s middle name alongside his mother’s for the moniker.

They bought 36 blank T-shirts, had them printed and sold them online. With the proceeds, they bought 50 shirts and had them printed, and so on. The themes were hand-drawn flags, hearts, and “Southernisms,” and they conducted business in the basement of Lauren’s parents’ house.

The shirts took off like a rocket ship.

Lauren tackled dresses next, fitting them on “real girls,” rather than thin models. She found a pattern maker and began offering them at trade shows.

The venture was profitable from the beginning, but needed cash to expand. The couple went to Legacy National Bank of Springdale and, as Lauren said, begged for a line of credit.

“We did it the old-fashioned way, and they took a chance on us. We were lucky to find a bank willing to be entrepreneurial,” she said.

In February 2014, the company’s first private-label shirt was released. The weight of the cotton, the softness and cut were carefully selected, and an artist’s hand drew unique and feminine designs.

“We were the first company to show we cared about putting artistry into a shirt,” Lance said.

Swimsuits were next, then hats, tote bags, and other knit goods such as jerseys, tank tops and sweatshirts. The line now includes a few gifts and shirts for men.

From the beginning, Lauren created all the clothing concepts from things she’d love to wear. A designer in Dallas builds the patterns. Fittings take place in Fayetteville. Clothes are manufactured across the world and delivered to Fayetteville, where sales, customer service, and shipping facilities are based.

A blank T-shirt line (using high-quality materials under the name L Brand) is in the works, which will merge with the new state-of-the-art screen-printing capabilities to allow custom orders on demand.

The system will pay for itself in 18 months, Lance expects. The two printing arms have a capacity of 15,000 shirts per day. The equipment will mix paint digitally to an exact Pantone, cure screens in a humidity-controlled environment, then dry, tag, fold, bag and affix UPC labels to clothing pieces on a conveyor system.

Direct-to-garment digital equipment can print digital photo images on fabric, simplifying the creation of samples. Embroidery and live production will be added next. The system will be fully online in order to produce a half-million shirts needed for spring.

“You don’t often see people build a system like this from scratch,” Lance said. 

 

Knockout Team

“I have a knack for finding great people,” said Lance, wearing his baseball cap backward with jeans and boots. He seeks trustworthy, hard-workers above experience.

The Lauren James team now consists of 15 full-time employees (including a CFO, videographer, a search-engine optimization and digital specialist, social media/creative specialist, warehouse manager and two full-time sales reps) and 25 part-timers. The oldest employee is 31 years old.

During the next six months, six to eight additional full-time hires are planned, Lance said, not including employees for retail stores. Lauren James has partnered with a New York retail company to open stores in Southlake and Plano, Texas, in February and April, completing the trifecta of three channels: online, wholesale and brand store.

The store vibe will be Southern and classic — shades of pink and white with chandeliers, very girly and distinctly Lauren James. Stores will also offer a strong digital experience.

The company operates one Fayetteville store now, a local test store fitting the Dickson Street vibe — and turning a big profit. The new concept will be night-and-day different, the couple said.

Wholesale customers will remain the target for sales percentages.

“There’s a lot of financial discipline when you’re doing it yourself, and at times we’ve skirted the line,” Lance said. “We’re always evaluating, but we’ve turned down all outside investment to this point, and we’ve put everything we can back into the business.”

Officially, Lance oversees warehouse operations, finance and manufacturing, always seeking ways to operate more efficiently. Lauren places orders, designs and oversees creative teams and sales.

The biggest challenge ahead is scaling, Lance says. It wasn’t long ago that the whole team pitched in to pack boxes in a pinch.

“It’s difficult to leave startup mode, to become a functioning corporation,” he said. “But we’re a multimillion-dollar corporation now and we want people to specialize. I always say: observe, adapt and pivot.”