Robert McMillan, Founder of Four Star Denim & Apparel – Interview
Kickstarter. Since it’s inception in 2009, literally everything imaginable has cropped up on the online crowdfunding website; from the evolutionary and enlightening to the bizarre and pure nutty (pun intended). Given the risks and high barriers to entry for seriously starting anything in the clothing and fashion industry too, it’s no surprise the platform has become something of a penchant amongst many aspiring designers (“hell, if Gustin can raise ~$450K, what’s to say I can’t?”).
As it so happens though, “Kickstarter” has also become one of the most polarizing words on Heddels (read our take on the issue: “The Problem With Kickstarter“). Some love them for helping hopeful makers quickly realize their dreams (and sometimes more than once), others feel it’s disingenuous, a crutch, and overall has contributed more noise than signal.
Opinions aside, we turn the conversation to Robert McMillan, one such person who is currently using the online platform to fund his project, Four Star Denim and Apparel, which is an American-made, factory direct denim line. Through our dialogue, McMillan tells us about his clothing company and mission, why he believes the traditional apparel manufacturing and retail model is broken, and why you should support him – through Kickstarter.
Read on below for the full interview and learn more about his Kickstarter project here.
Heddels: Can you tell us a little more about yourself and what inspired you to start Four Star Denim?
Robert McMillan: Sure. My name is Robert McMillan, I’m 30 years old, I live in Chicago with my wife and son and I’m the owner of Four Star Denim and Apparel.
As to what inspired me to start Four Star Denim, there was a guy, Mike Catherwood on the radio show Loveline who was strictly buying American-made products. And guess what, it was way more expensive. To the extent that it was cost prohibitive for most people.
Fast forward to 2013. No one has really stepped up to solve this problem of manufacturing clothing in America and making it accessible for most people, from a price perspective. Only 2% of all apparel sold in the USA is actually made here. If anything, the world of fast fashion and mass imports had gotten worse. To me, that seemed like a problem. So, I started investigating why it wasn’t being done. It turned out that that the “it’s too expensive to make things in America” answer was total BS. Yes, it is more expensive to make things in America, but the real costs to customers is coming from the traditional retail model as a whole.
So I founded Four Star Denim and have been working on it since. I guess there wasn’t an “aha” moment of inspiration. There was something I cared about that drove my curiosity, which lead to taking action.
RD: What appealed to you about using Kickstarter as a platform for Four Star? What do you think are the risks associated with using it (if any)?
RM: There was a problem with our vision for Four Star: you can make all the premium jeans you want and offer to sell them for the same price as the mass produced imports; but if no one wants them, what’s the point? You are gonna be out of business quickly and will have made no impact.
What people buy in the world of fashion has a lot to do with perception. Branding, marketing, advertising; marking your product up excessively and then having it “on sale,” all that stuff really influences the choices people make when they go to buy a pair of jeans. Offering a superior quality product for less isn’t a sure thing.
When I first started telling people that Four Star was going to sell our jeans for under $50, their initial reaction was “oh, you must be using cheap materials”, when in fact it’s the exact opposite. I had to go into what the actual costs of production are, how our manufacturing and supply chain is different from traditional retail, and what you really pay for when you buy a pair of jeans at a retail store to finally convince folks.
So, how can you find out if people really want Four Star to exist? Launch a Kickstarter. It also has the benefit of raising a portion of our startup costs.
There are also some down sides to using Kickstarter. People have to go out on a limb to support your project. They give you support but have to wait to get their reward. Kickstarter has been around a while now, and there have been successfully backed projects that haven’t delivered on what they were offering, or fell short of expectations. People who have had a bad experience may not be willing to try it again. Those were my biggest concerns about using Kickstarter.
At the end of the day though, we need to find out if people want what we have to offer, and I think Kickstarter was the best option available to us.
RD: On your Kickstarter page, you briefly mention that you will be building out a brand new manufacturing facility in Chicago and need support for the machinery and materials to get started. Can you tell us about this plan and what machinery and materials would you purchase if funded?
RM: To make Four Star work we have to build a modernized denim line. Almost every stitch on a pair of jeans requires a specialized sewing machine: for the inseam you need a five thread safety stitch, a special machine for the button hole, a large format pattern sewer for sewing on the back pockets, a flat-felled seam for attaching the yokes, sewing on the waist band is another specialized machine and of course a bartack to reinforce. That isn’t all of it, but you get the idea. There is also the spreading and cutting equipment as well as finishing equipment.
The grand total is $150,000 worth of equipment for one denim line. The equipment will come from Juki, Eastman, Kansai and Gerber. Our Kickstarter isn’t meant to cover it all, just to help out.
The other major cost we have is the raw denim. We have to order a lot of it directly from the mill and it isn’t cheap. There are only two denim mills left in America, Denim North America and Cone. We are using Denim North America. They are based out of Georgia and offer some really spectacular denim.
For the men’s cuts we chose a 13 oz. denim with a mariner dye. It has a 2% spandex content for a little bit of stretch and feel. Our first test sample of the denim has worn beautifully after 9 months of continuous wear.
RD: And how much of your manufacturing will be done in the United States?
RM: All of it.
RD: “Quality” and “premium” – these are two terms we hear from nearly every clothing brand. How does Four Star assess these attributes?
RM: What they are made from and how they are made. Are the jeans made with beautiful and durable fabric? Is the stitching sturdy? Do they fit well? Are they made in a socially responsible manner? Four Star answers yes to all of these questions.
RD: With so many brands available today at nearly every price point, the denim market is arguably more crowded than ever before. Who do you feel you’re primarily competing with and how is Four Star different?
RM: From the beginning, the mission of Four Star was to bring people a great pair of American-made jeans that could retail at a price comparable with the mass import market. There are a lot of brands making really cheap jeans. There are a lot of brands making high-end American-made jeans and trying to sell them for $100 to $200. There aren’t very many brands making premium, American-made jeans and retailing them for under $50.
In our minds, our main competition, oddly enough, is Levi’s. They are the big player at the $40-$60 price point. What makes us different? A lot. Levi’s has been around for 150 years as the great American apparel manufacturer, but that is just a ruse now. The vast majority of their manufacturing is outsourced overseas. They closed their last major US manufacturing facility in El Paso 12 years ago. Because they are mainly a retail store staple, they are under pressure to keep production costs as low as possible, which means they have to keep labor wages low and material costs low. That’s why they’ve outsourced all their production overseas.
At Four Star, we actually make the jeans we are selling. Craftsmen wages and material costs aren’t under pressure because people are buying directly from the people who make them, rather than getting marked up by a brand and then a retailer. This means we can compensate our workers adequately and use premium American denim in our jeans.
RD: You say you reach your low cost by “cutting out the middleman and using small batch production”. Who do you define as “the middleman”? What do you gain by cutting the middleman out and what is lost?
RM: This is really the heart of Four Star Denim and Apparel and why we are able to do what we do. The current apparel supply chain works like this: a brand orders jeans, jeans are outsourced to a manufacturer, the manufacturer makes the jeans and tacks on a profit margin, the brand sells to a retailer and tacks on their profit margin, then the retailers sell to customers with their profit margin tacked on. That is how you get from a $8 pair of jeans at production (and that is being generous) selling for anywhere between $30 and $60 depending on a number of factors, including what the brand is and who’s the retailer.
Who is the middle man? I guess it depends on the perspective. In a way, they all are. For us “cutting out the middle man” is really short for changing the entire retail supply chain to a factory direct model. You buy directly from the people who make them, and the jeans are only marked up once.
The other part of it–small batch production–refers to how we make the factory direct model work. Apparel sales are seasonal and fluctuate. If you are a big brand making huge orders, you have to buy in massive quantities because your manufacturing is done overseas there is a substantial lead time.
So how do you know how many you need to order? You don’t know exactly so you make a sales forecast based on last year’s sales, how the economy is doing, etc. You don’t want to run out, so you order some extra. Everything you don’t sell is a loss. This leads to a lot of inefficiency.
Four Star doesn’t have to operate with these kind of sales forecasts. Since our manufacturing is all in-house, our lead time to replenish inventory is drastically shorter. This lets us keep a smaller inventory that is replenished through small batch production. This saves costs on inventory management and distribution that we can pass on to customers.
What do you get from “cutting out the middleman and using small batch production?” A lot more than just a more affordable retail price. The factory direct model lets us use premium materials and compensate our workers better because we don’t amplify the costs of production through 3 layers of markups.
What do you lose from our model? Shopping in a store, which is important for a lot of people.
RD: Not being able to purchase in-store can also present challenges such as sizing. If all of your product will be sold online, how will you handle problems like mis-sizing and returns that the normal retail experience normally takes into account?
RM: Yeah, that is probably the biggest problem with online clothing. How do I know something will fit and what if it doesn’t? We are offering a sizing guide to help people pick the right size and cut. Waist and inseam isn’t enough. We have measurements for lower hip, thigh, knee and rise (front and back) to help people get the right fit the first time. If it still doesn’t fit, free returns. Simple as that.
RD: Focusing more on your price point, could you walk us through how you arrived at the $39 retail tag? It strikes us as a very intentional move.
RM: We wanted to offer people a serious discount on Kickstarter for sticking their necks out. $39 with free shipping in the USA was the best price for us to offer that discount without taking a loss. We don’t want to make money off this Kickstarter, we need to see if people want what we have to offer.
RD: Besides this low price point though, what else does Four Star offer that your (aforementioned) competitors do not?
RM: A better quality product made in a socially responsible way.
In terms of quality, are we using artisanal Japanese selvedge denim? No. We can’t get that down to the price we wanted to retail. We are using premium, American stretch denim. It’s on par with the kind of fabric you see from designer labels sold in Nordstroms, and it is without a doubt a much better fabric than you are used to seeing in jeans selling for under $50.
As for being socially responsible, we will be manufacturing in our city of Chicago paying solid wages. That helps our city, even if we are small potatoes.
RD: Any last words/thoughts?
RM: Back our Kickstarter and share our story with friends and family so we can contribute to turning the tide on fast fashion.
View Four Star’s Kickstarter project here.