Citation from the Loose Threads Podcast: Retail is Alive: Matthew Scanlan of Naadam. Read the full article here.

On Naadam’s expanding brick-and-mortar footprint:

When Naadam Cashmere secured $16 million in Series A funding last July, the brand’s CEO, Matt Scanlan, said he wanted to grow the brand and acquire new customers by opening retail locations in the U.S. and abroad in markets like Italy, Germany and the U.K. To make expansion into brick-and-mortar simpler, Naadam partnered with startup retail platform Leap on the brand’s two Manhattan locations.

Leap works with a number of DTC clients, including wedding-dress brand Floravere (which just opened its first permanent retail location in April) and shoe brand Koio, and takes on a lot of the big burdens that come with opening retail locations, from finding the perfect space to designing the space to heading up any necessary construction or instillation. Leap also scouts and hires all the staff who work in Leap-created retail locations.

“[Leap] absorbs all that risk, which is a ton of risk. They scout the locations, sign the lease. Then they cover all your capex expenses. They take that, they bring in an agency, they build the store. Still, I put out no money,” said Scanlan, on a recent episode of the Loose Threads podcast.

After the lease is signed, Naadam starts to flow inventory to the stores and work on store projections together. “Then we agree on a financial model — revenue share, management fee — so that they make money off of the store long-term, but that we make money, too,” he said.