The Triple Bottom Line - People, Planet, Profit

So yeah, I was quite interested actually because obviously you spent 10, 13 years on Wall Street and then made the move into fashion.

I did, I did. And so I left Wall Street, went to business school, took some time off, knew that I wanted to be— I knew that I wanted to have my own business of some sort. That it was going to be in fashion was unexpected. I mean, I sort of— I would say that I always had a very serious job. Not that fashion isn't serious, but I loved fashion, but I didn't really picture myself in that industry. And I was looking for a well-made piece. And I just kind of searching, searching, searching around. I was looking for a black skirt like what I'm wearing today. The cheapest thing I could find was $2,000, some of the designer brands, which is outrageous. Yes. I'm like, this is a really simple piece. Why is it not out there? And one of the things about business school is it shows you how gaps in the market, and these are opportunities. And so I saw this opportunity, started researching it, and I sort of had a view, because coming from foreign exchange, you really see the world at the 50,000-foot view. And so you really see macro trends. That's your job. And I sort of had this view looking around. Everything's trendy. The quality's poor. And I really had a view that there was a space for my kind of business and what I'm doing at Sensatempo.

Yeah. So tell me a little bit. About Senza Tempo? I mean, you founded this how long ago?

About 2.5 years ago. It was probably about 2, 2.5 years in the making. Again, since I didn't come from the industry, I spent a lot of time, and it actually took me a long time to find the manufacturer to do it because I had a very specific streamlined view, and what I later learned was that fashion is not very streamlined. And so I realized that, but I was lucky because I found— I I found an atelier out in Los Angeles that had the structure that I was looking for and could do the quality that I was looking for. So it's a classically inspired line, all very timeless kind of wardrobe staples, but in the more— the style is a bit more refined. I always say, like, if Jackie O or Audrey Hepburn would have worn it, that's my style. And it's the thing that everybody recognizes when they see the brand. Oh, Jackie would wear this. So that's the essence of it. And that was one of the things that I found that was harder to find because we're in such a trend-driven world. So it's all natural fabrics. One of the speakers today used the term plant-based fabrics. Yeah. And I was like, oh, that's a good way to think about it. Because we think about the positives that come from a plant-based diet. So all natural fabrics, including silk linings, which is something that you really only get in women's wear in high-end and very high-end ready-to-wear. Yeah. And so, but yeah, and everything's made from sampling to production on the same factory floor out in Los Angeles.

Wow. Fantastic.

Yes.

Okay. I mean, we were just talking with someone about nearshoring. Were you actually doing it?

Yes. Oh, yes, yes. I grew up in North Carolina and, you know, where we had a lot of textile mills and we didn't do luxury in North Carolina, but, you know, we did socks and t-shirts and things like that, and I really watched the state in some ways become decimated and have to restart itself when all of those jobs went away. And it wasn't just apparel, it was furniture. I mean, it just, it was sort of a poster child of offshoring.

You can bring the factory back, but you can't bring the 100 years of skilled labor and all of that.

No.

That history.

Exactly, and that's, I know that's, That's part of the problem is that a lot of those people have aged out of the market. And so trying to find the people that can do that work. So a lot of that work is becoming much more technology, you know, technology. So simple garments are much more technology-focused. So if it's cotton, if you're sewing cotton towels or cotton t-shirts, you know, I'm working with blind hems done by hand and things like that. So it's much more on the upper end of the spectrum. I had a conversation with my manufacturer today. Asking her about automated, and I was like, I know you can't use it for my stuff, but are there other people? But yeah, so you are seeing that return of technology to solve some of the labor market issues and things like that.

Yeah, absolutely. I'm interested actually as well by your history in or on Wall Street. Yes. Because that's what you were doing before this, and this is where your sort of focus You were saying earlier on, on the sort of fourth decimal place.

Yes. So I spent my career initially on the investment side, working where we were trading currency as an asset class. And then I moved to— I spent most of my career on the trading desk. And one of the things, it's a very— especially the trading desk, it's a very entrepreneurial world. So I would say that there's oddly a lot of lessons that I've learned from that world, even though it's very, very different, that can be applied. And then also the efficiencies that, you know, we, you know, it was a very, it was a very highly regulated world where, like you said, we're trading out to the fourth decimal point. Every basis point counts. You, you want to maximize every opportunity, you know, every opportunity. Everything is a chance to make money, basically. Yeah. And so that was one of the things that I noticed when researching how things were done in the fashion industry. The level of waste. And again, that was another one that was, you know, when I sort of saw that, okay, I can figure out a different way to do, you know, set my business model up in a different way, do things a little bit differently. That's when I sort of realized again, it's not just about making a pretty garment because I don't think if this broader trend of sustainability, I don't think was needed, probably wouldn't have launched. The business, 'cause I do think there's enough out there. Yeah. That's the problem. Way too much. Yes, exactly, exactly. And so, and I was like, okay, if you can try to do something different, try to be kind of small, so you wouldn't say that you're a leader, but kind of, I think a lot of these things start with the smaller businesses. It's easier for a smaller business to turn or to start a new, than some of the larger public companies.

People talk a lot about pivoting now, and it's much easier for a small organization. Exactly. Less larger cogs to move.

Exactly. And you're not dealing with having the short-term profitability issues that they have to deliver to shareholders every 4 quarters. So when I was doing my talk today and putting the talk together, that was one of the things I did try to keep in mind because I knew I was speaking to an audience of public companies and smaller companies. And I think I understand they're facing different issues than what I'm facing. But I think you can do a little bit. Every little bit counts. And just kind of trying to think about it holistically.

Sensatempo, talk to me about what you guys are doing to go against the grain with your business model or conscious consumerism.

Yep, I don't work on a seasonal basis. I don't clothing, you won't find sales every 6 weeks, even every 3 months. You might see a sale once a year. As you know, if I'm clearing out, like if I have just like a handful of styles left or sizes in certain styles. And so people know that and it's not working on trends, creating, more seasonless pieces. So the number one thing I think about in design is how many ways can you wear something? Can I wear it with jeans? Can I wear it to work? Can I do— because I think about this, you know, women like me, you know, whether I was working on Wall Street or now, I'm living out of a suitcase maybe, you know, 50, you know, 30 to 50% of the year. And so versatility is key. You know, if I have to go from New York to LA in January, that's really difficult to dress for.

Yeah.

Yeah. —You know, you're really going to extremes where it can be below zero to pretty temperate and pretty comfortable. So using items that are mid-weight, using— one of the things is using silk linings and using natural fabrics. They're breathable. People forget about that. Everybody always thinks it's the wool suit that makes them sweat in July, but it's actually the polyester lining. —Really? Yeah, yeah, yeah. —I mean, because polyester and acetate, it's just plastic. Plastic. So it's just like wrapping yourself. I mean, which, I mean, I always knew a lot about clothing, but I never put those two pieces together. Whereas silk, you have, you know, and, you know, even if it's fitted and maybe you're a little bit warm if it's 90 degrees, but it's much more comfortable than if you're wearing a suit lined in polyester. And so, so really kind of, you know, versatility, season, you know, trying to use mid-weight seasonless items. You know, you'll never see super thick wools or super light linen. It's just always about finding that middle ground so you can layer it and just be— it can be the piece that you just go back to over and over and over again.

Yeah, yeah, absolutely. And I guess it's then got to be made such a high quality because it's going to be used time and time again. Exactly. But what you're really trying to do here is just trying to stop it going into landfill at some point and stop being part of this sort of, uh, culture that is really the fashion industry is being called out for.

Exactly. And I do think so. I'm— I would say I'm— I am older and I remember when clothing was expensive. I remember when I had to save up to buy clothing. And so that is a mentality that is just ingrained in me, whereas the generation behind me, you know, in, you know, in all the generations behind me, they only know cheap clothing. They don't know what it's like to buy a t-shirt from one of the mall brands and have it last 10 years. And they did not experience that kind of— they also didn't know what it's like to have to save up your allowance. Yeah. Because that t-shirt was probably the equivalent of a $50 t-shirt today, whereas now they can just go and get a $10 t-shirt. So if you raise prices— and I know that's not the solution across across the board, but higher prices, but having better quality within that. I think there's interesting things in because I think we've got to have a recalibration of our values. And some of it's a little bit of a chicken and the egg. It's like, did our values change because the industry changed, or did the industry change because our values were changing? And we just kind of— I think they feed each other, this disposable culture. And so I think that it just is going to take time. But, you know, I think if you tax people, you know, if you have a special tax on— there tends to be a luxury tax in a lot of states here in the US. So if you buy things that are over $1,000, they're taxed at a higher rate than if they're under $100 or something like that. Clothing typically isn't taxed because it's considered regressive, but the volume that we're doing Maybe you do. Maybe if you're— it's sort of like, look at what happened with cigarette taxes in the US. I mean, that cigarette tax has curbed so much of the use here in the US. I'm sorry, I don't remember the laws in the UK about cigarette taxes.

No, no, it's very similar. Okay, I thought so.

But it's been effective. It's an effective means to shape behavior if you can't get the private sector to do it on their own.

Yeah, absolutely. For you, what has been the most exciting change over the last few years?

I think just the fact that this, this whole topic of sustainability is starting to make it into the mainstream. I'm not sure if it's totally mainstream because I still think we, we still see a little bit too much, and there's still— I don't know if all the reporters aren't necessarily questioning some of these greenwashing PR tactics and things like but I think that it's getting into the mainstream, and that's exciting to me, especially to have followed, to sort of have started a business and then followed this. I mean, I'm emailing and interacting with reporters every day saying, "Have you thought about this? Do you think about this? Look at this data," and things like that. So I think that you are starting to see that, and then you're starting to see here in the States, and I know it's the same in the— I think the EU is is actually a lot further ahead on human rights issues and things like that than the US tends to be. But we are in— the government and some of the key regulatory bodies are starting to think about what's the impact of climate change. And they're tying it together with financial markets. And that's going to be usually like— where if you sort of hit people in their wallet, that's usually the way to affect change. And so I think that there's a lot of interesting things going on on the policy front and sort of in the media that I think there's a lot of positive changes kind of bubbling. Yeah, yeah.

You mentioned The Bottom Line there, I believe, and The triple bottom line. The triple bottom line. Yes. So this is interesting. I mean, obviously someone from Wall Street is going to be like, ah, I don't know about this.

Yeah. This is your sweet spot, right? But the funny part is that if Wall Streeters see a way to monetize it, they're going to be the first people all over it. And so that's sort of where I have hope in some of this because I think it can be a catalyst for profit. You can end up in a better place.

So what is the bottom line framework?

So the triple bottom line framework, it's a construct where I went to business school where you, instead of just looking at the bottom line P&L, you know, an actual cash P&L, you try to measure the impact on people and planet and profit with all of your decision making. And you can There's various ways that you can apply it. I mean, I just try to think about it sort of— I think if you apply it to every step along the way, you can get to a better outcome. But it's just trying to understand, okay, the most cost-saving measure might be slave labor over in Bangladesh. But that's going to be a big negative on the people side, even if it's going to be a big positive on the profit side. It just tries to force you to think about things other than just the pure cash profit. Absolutely. Or shipping garments to 5 different places before they're a finished garment. That was another thing that just sort of blew my mind that that happens. Like the waste, not even— you're not even talking about the greenhouse gas and emission waste, but just the sheer money shipping.

Yeah. It's extraordinary. Well, it's incredible actually, you know, there's so many areas for the fashion industry to improve its practices and obviously, you know, if you do improve them then hopefully you're going to make a profit. Kristen, yeah?

I was going to say, and I think those areas feed off of each other too. So I think if, you know, if you try to improve waste you're going to improve, you know, your emissions output. So I do think that those sort of key areas, like I think about emissions, waste, labor, and, you know, sort of fabrics as it relates to that. And they all feed off of each other. And so an improvement in one usually leads— gives you an improvement at least in one or the other.

Yeah, absolutely. I mean, have you seen that in your 2 years? I have. I have.

Yeah, because one of the— I mean, one of the big changes when I was— when I was first starting out, I was actually getting a lot of fabrics from New York. And then I just sort of sat down at the end of the year and I actually looked at the cost And then I was just like thinking about it from an environmental perspective. I'm like, "This is insane." And so I went back out to LA and it took a little bit of time. And sometimes I have to make design changes, but if the fabrics aren't coming direct to the factory from Italy, then I'm getting them from smaller suppliers out in LA. And I will only use suppliers out in LA. I won't have things flown in from New York, even if I want it. [Speaker:JASON] Yeah.

So this is it, and you're making a conscious choice there. You know, you have what you'd prefer maybe in an ideal world, but one doesn't live in an ideal world. No, no. You know, and so you have to make those— you have to make those cuts somewhere.

Absolutely.

But do you think that sustainability, true sustainability, is a pipe dream until people are willing to lose profit?

In the search of it? I mean, I think, A, I mean, I think sort of true sustainability is one of those, how do you define it? Which is a podcast for another day. Yeah, yeah. I don't think you have to lose profit. I think you have to be mindful of how you're building your business. So if you looked at the numbers, all of the growth sort of largely in the industry in the last 20 years has really come from volume and not necessarily margin expansion. You can grow a business, I mean, businesses can grow, revenues can grow in two ways. And so, and I think that we've just gotten used to volume, volume, volume, volume. It's easier to push as many things out and then get rid of them. And so, I don't think— I would like to believe it's not a pipe dream. I think that people do have to make hard choices, though. I think that you have to rethink your business model. The industry in general needs to rethink its business model to get to a more sustainable future. Are some places going to have to be forced and probably take pretty big hits? Yes. Absolutely.

I'm a realist. Yeah, absolutely. It's interesting, Kristin, because you've obviously got this Wall Street mind about business and, you know, decimal places and all the money that's involved, which is very impressive, but you're also very conscious as well. Do you find yourself convoluted sometimes or contradictory in your sort of thinking here? You've got that sort of Wall Street and I want to be green as well. It kind of is.

I mean, no, they really— I mean, but they shouldn't, they shouldn't be two opposing forces. I mean, they really should, you know, as like, again, it's like I'm older and 20 to 25 years ago, sustainability wasn't even in our vernacular because it was just how business was done. You know, of course you made something that lasted for years and businesses thrived for years and years and years. So there's no reason that somebody can't have a profitable business that now is considered green. It was just the way of doing business back then. I always say that our grandmothers are the original sustainable shoppers. They reused Ziploc bags and tin foil and things like that. Now that would be considered eco-conscious, but that was just that was just how they did. So you need to have a reversion to the way the model was in some ways. But yeah, I do. I just, I believe in it. It's a problem to solve. It makes it interesting. Yeah, I bet, I bet.

But you're absolutely right. And a reversion is an interesting word. It's going back and realizing that actually we've lost some knowledge. About how to live our lives. Very much. We've lost our way a little bit.

Very, very much. I'm a huge history buff, and so I read, in particular World War II, and you just sort of read about fabric rations and all of the— and again, I grew up, I was very close to my grandmother, so I sort of was instilled with so many of those values. And I actually sort of wonder if not having, you know, kind of some of the younger generations not having that influence of their grandparents who were frugal because they were probably children of the Depression and then, you know, husbands and wives of, you know, World War II. Frugality was their way of life, but it's just being sustainable, you know. Again, we weren't having waste conversations.

It's efficient. It's a very efficient way of living.

Exactly. Yeah, exactly. So yeah, it's interesting.

Well, they say that the world does go in circles, so hopefully— I think we're on a turn.

I do. I mean, I have to believe that.

You have to have a positive outlook. Absolutely. Absolutely. Let's hope it doesn't take something as bad as the Depression to get us to that kind of point. You know, let's hope that we can realize that there's an efficiency to be had here. No, exactly.

And that's what the San Francisco Fed has a paper out and it's kind of exactly to that point that they see the next financial crisis coming from climate change. So that's a major systemic risk. I mean, it's effectively the Depression. Yeah. So it was— the paper was out earlier this year. Oh, really? Yeah. So I was like, I'll share it with you. So if you want to share it with the listeners. But it's absolutely, you know, I think kind of again, it's like I think if things hit people's pockets, that's when they change behavior. And it's just— I mean, I worked through the first financial crisis. I was on the trading desk. I would like to not see that again. Definitely. Definitely.

Well, let's hope we learn our lesson this time.

Yes, absolutely.

Thank you very much for joining us. It's been really interesting.

Thank you so much for having me.