Rocawear Apparel LLC

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Rocawear Apparel LLC

1411 Broadway
New York, New York 10018
U.S.A.
Telephone: (201) 601-4283
Toll Free: (800) 839-6016
Fax: (201) 617-8686
Web site: http://www.rocawear.com

Private Company
Founded: 1999
Employees: 200
Sales: $700 million (2005 est.)
NAIC: 315119 Other Hosiery and Sock Mills; 315191 Outerwear Knitting Mills; 315192 Underwear and Nightwear Knitting Mills; 315211 Men's and Boy's Cut and Sew Apparel Contractors; 315212 Women's, Girls', and Infants' Cut and Sew Apparel Contractors; 315299 All Other Cut and Sew Apparel Manufacturing; 315999 Other Apparel Accessories and Other Apparel Manufacturing; 316219 Other Footwear Manufacturing; 316992 Women's Handbag and Purse Manufacturing; 316993 Personal Leather Good (Except Women's Handbag and Purse) Manufacturing

Rocawear Apparel LLC sells urban and upscale clothing for men, women, teens, and children including jeans, jerseys, footwear, outerwear, headwear, sportswear, jewelry, accessories, and loungewear. Once part of the entertainment empire known as The Roc, Rocawear underwent a change in ownership in late 2005 when Damon Dash sold his interest to partners including rap superstar Jay-Z. Rocawear's increasingly popular brands include State Property (fronted by rapper Beanie Sigel), Team Roc sportswear for Foot Locker, C. Ronson by club D.J. Charlotte Ronson, limited edition Pro-Keds with Stride Rite Corporation, and high-end jewelry and watches with Tiffany & Company. Rocawear is sold at department and specialty stores throughout North America, Asia, and Europe.

IN THE BEGINNING: LATE 1990S

The story of Rocawear is deeply embedded in the hip-hop world, with the rise of rapper Jay-Z who wanted unique, stylish clothes to wear on tour and in his music videos. Longtime friend Damon Dash, who had worked with Jay-Z and Kareem Burke to form Roc-A-Fella Records in 1995, believed an urban clothing line with Jay-Z as its front man was a solid business opportunity. Few retailers carried urban clothes; fewer still actually knew what they were. Though designer Tommy Hilfiger had begun designing clothes with an urban appeal, Damon and Jay-Z not only knew the hip-hop style of life but lived it every day. With backing from several investors, Rocawear was established in 1999 as a wholly owned subsidiary of the growing Roc-A-Fella Enterprises.

At Rocawear, Dash handled the business end while Jay-Z and Burke, known as "Biggs" in the rap world, continued to write and perform music, wearing the apparel. A key factor in the success of the firm was Dash and Jay-Z's contacts in the music world and the relatively new use of co-branding. Soon after the company began, Dash brought singer Charlotte Ronson into the fold. Ronson wanted to design her own clothing line, but had no experience or knowledge of the apparel industry. She signed with Rocawear for financial backing and distribution, so the 21-one-year-old Ronson was able to concentrate on the creative aspects of the business.

HITTING THE STREETS: 2000–03

In 2000 Rocawear signed a deal with Midway Games and Playstation2 (owned by Sony) to design clothing for the "Afro Thunder" character from the popular video game "Ready 2 Rumble." The new apparel line, sold in Macy's stores, debuted late in the year and gained popularity with subsequent Rumble game releases.

Another branding opportunity came with the early 2002 release of the new film State Property, starring Roc-A-Fella Records rapper Beanie Sigel. The film, produced by Roc-A-Fella Pictures and Lion's Gate Films, was an urban crime drama featuring a new apparel line by Rocawear. The apparel collection was aptly titled State Property, of which Sigel was offered an interest. The Philadelphia-based Sigel and fellow rappers wore Rocawear's clothing in the film, while performing, and in the announced sequel.

By mid-year Dash and a crew were in Paris shooting an ad campaign, featuring the new State Property line and Rocawear's other apparel. Models, rappers, and former Spice Girl Victoria Beckham shot on locations around the legendary City of Lights, in a campaign Dash hoped would appeal to European consumers. Rocawear also opened an office in Amsterdam to handle its international interests.

While Rocawear had firmly established itself in the United States as an urban "lifestyle" brand, racking up sales of about $120 million, Dash was bent on worldwide domination. To this aim, Rocawear unveiled a new slogan: "It's not where you're from, it's what you Roc," and relocated its offices from Seventh Avenue to a 35,000-square-foot showroom in New York City's garment district at the end of 2002. By the following year, Charlotte Ronson's apparel line, C. Ronson, shot its first advertising campaign in the Rocawear showroom. Ronson had designed a new menswear line, and brought in her DJ brother Mark and twin sister Samantha, who was finishing an album for Roc-A-Fella Records, as part of the campaign. Rocawear's investment in the C. Ronson line had paid off, as her sales neared the $1 million mark.

Dash was on a roll in 2003 with the success of Rocawear and its various clothing lines (bringing in upwards of $300 million in sales), as well as Roc-A-Fella Records and Roc-A-Fella Films. Roc-A-Fella Records' musicians continually topped the rap charts while Roc-A-Fella Films was shooting State Property 2 and other films. Ever ambitious, Dash created Roc Music, a new music label for pop, rock, and blues recordings, and launched a new quarterly lifestyle magazine called America.

Hoping to take his empire mainstream, Dash likened his magazine to a "multicultural Vogue." In addition, the brash entrepreneur told Crain's New York Business he planned on being a billionaire and "wanted to rule the world."

Other developments in 2003 included a deal with London's Selfridges department store to sell Rocawear, and signing model Naomi Campbell to join Victoria Beckham and her soccer superstar husband, David Beckham, as Rocawear representatives. Near the end of the year Rocawear formed its own marketing firm called Native/DBG, installing David Gensler as its chief executive. By creating the agency, Dash hoped to give Rocawear a more professional image and to work with more corporate partners.

EXPANSION AND TURMOIL: 2004

Rocawear's new image took several hits in early 2004 when Dash was embroiled in controversy and his carefully constructed Roc empire began to crumble. It had all started with rumors of Jay-Z's retirement and possible hiring as chief executive at Def Jam Recordings, which owned half of Roc-A-Fella Records. During the year, Def Jam offered to buy out Jay-Z, Dash, and Burke's shares of Roc-A-Fella. The partners received $10 million and Roc-A-Fella became a wholly owned subsidiary of Def Jam.

COMPANY PERSPECTIVES

All in all Rocawear defines the lifestyle for today's young hip consumer and provides the efficient business acumen to retail partners necessary to be successful. As the ad campaign tag-line goes … WE RUN THE STRIP.

Around the same time as the buyout, Dash was slapped with a lawsuit by a former model who claimed he had raped her. Next came a meltdown of Rocawear's new marketing firm, with Dash firing most of the staff and dissolving the agency after a dispute with Gensler. Dash then hired Roy Edmundson, formerly of Levi Strauss, as a vice-president to handle all of Rocawear's marketing and public relations, not an easy task with Dash's legal woes and the upcoming incarceration of Beanie Sigel, front man of the booming State Property apparel line, on federal weapons charges.

Rumors were soon flying about a rift between Dash and Jay-Z, who were still partners of Rocawear. The tension reached a fever pitch when Jay-Z became president and CEO of Def Jam. Part of the deal included a stake in Roc-A-Fella Records, without his founding partners. Jay-Z's new ownership in Roc-A-Fella upset Dash and Burke. To make amends and keep the peace for their other business interests, like Rocawear, it was reported Jay-Z offered his share of Roc-A-Fella back to Dash and Burke if they would give him sole rights to his first album for Roc-A-Fella, Reasonable Doubt.

Though it has been said Dash agreed to this offer, Burke did not. The rumored rift was now full blown, with Jay-Z on one side and Dash and Burke on the other. Throughout the drama, however, Rocawear continued to thrive. In 2004 Rocawear expanded its branding to include outerwear through a deal with Brandon Thomas Designs, renowned for its washable suede jackets and coats; introduced its first sock collection with New York's Gina Hosiery; and rolled out a "bling" (jewelry) line called Tiret, consisting of watches and a variety of gem-encrusted accessories selling at New York City's famed Tiffany & Company. This bling, however, was only for high rollers with prices starting at $20,000 or more. In addition, Rocawear acquired the licensing rights to Stride Rite Corporation's Pro-Keds and planned to design a limited edition collection for the State Property apparel line. Rocawear also prepared for the launch of a sportswear line called Team Roc, to be sold initially at Foot Locker stores in Los Angeles and New York, then at Macy's department stores.

Ironically, Rocawear unveiled an advertising campaign called "La Familia" in mid-year, including Dash's sister Stacey, an actress, his two children, and a roster of rappers from Roc-A-Fella Records. Dash told the Daily News Record (May 10, 2004), "In the umbrella of Roc, everyone is family. It's more than just a business, it's more than just friends. All the artists look out for each other."

While his words might have characterized the campaign, Dash's personal and professional relationships were fraught with discord. In November he fired Edmondson, his vice-president of marketing, and a dozen other staff members less than a year after dissolving Rocawear's in-house marketing agency. While some staffers commented to the Daily News Record (November 29, 2004) that Dash was difficult to work with and irrational, he told the magazine, "Not many people can understand my business, and I have high expectations."

THE FUTURE OF ROCAWEAR, 2005 AND BEYOND

By early 2005 one of Rocawear's partners, RyanKenny, discontinued their business relationship, less than a year after Rocawear had parted ways with the Nesi Apparel Group. RyanKenny reportedly disapproved of Rocawear's use of Malaysian factories to produce its apparel, though it was never confirmed by either party.

On the positive side, Rocawear's Pro-Keds collection was selling well and Dash announced an apparel and footwear collaboration with Patricia Field. Field's designs would be part of a collection called the House of Rocawear, featuring retro-glam styling. In addition, Rocawear was selling well in the United Kingdom, with slimmer tops and less baggy bottoms to compete with Diesel and other London fashion houses. State Property 2, starring Beanie Sigel, hit theaters in April just after his latest album went on sale. Sigel was not making public appearances, since he was behind bars, but his notoriety only increased sales for both the movie and Rocawear's State Property apparel line.

KEY DATES

1995:: Roc-A-Fella Records is founded by Damon Dash, Kareem Burke, and Jay-Z.
1999:: Rocawear, a hip-hop "lifestyle" brand of apparel, is founded in New York City.
2000:: Rocawear launches a new clothing line based on Ready 2 Rumble's Afro Thunder character.
2001:: Beanie Sigel fronts a new Rocawear collection called State Property.
2002:: The company opens an office in Amsterdam.
2003:: Dash, Jay-Z, and Burke sell their interest in Roc-A-Fella Records to Def Jam Recordings.
2004:: Rocawear begins selling luxury jewelry, accessories, and specially designed Pro-Keds shoes.
2005:: Dash sells his stake in Rocawear, but retains majority ownership of State Property and other ventures.

By September 2005 Dash was no longer willing to work with his partners, primarily Jay-Z, at Rocawear. He sold his interest in Rocawear, which had reached sales of over $700 million worldwide, for a total of about $30 million, with $22.5 million in cash and control of the State Property, Team Roc, and other brands. Dash maintained the breakup was due to philosophical differences. He commented to Daily News Record (December 15, 2005), "My vision for Rocawear was a colorless one. Jay and the other partners want to cater more to the pure urban demographic, and that's not the direction I wanted to go anymore." When asked if he was bitter, Dash said, "It was a beautiful experience…. I never thought I could have made so much money so quickly, and I have no doubt Rocawear will continue to be successful."

Dash vowed to move on to bigger and better projects, though the remarkable success of Roc-A-Fella Records and Rocawear were a hard act to follow.

Roacwear conducted its business as usual after Dash's departure, showcasing its wares at a mini showroom during New York City's "7th on Sixth" semiannual fashion extravaganza. Rocawear's partners, Jay-Z, Alex Bize, and Norton Cher, planned further European expansion for 2006, to launch new women's and teen collections, and to promote its RocBox, an alternative to Apple Computer's phenomenally popular iPod.