NEW YORK — On the sixth floor of Barneys, the luxury department store in Manhattan, you can find clothes by fashion designer Nili Lotan hanging on the rack with those by famous designers and brands like Yves Saint Laurent and Moncler.
Lotan, 60, began working as a designer almost 30 years ago and is now at the peak of her career. No one who follows her on social media or reads fashion blogs and magazines can ignore her presence.
Her clothes are worn by models like Gigi Hadid, Gisele Bündchen, Kendall Jenner and Natasha Poly, singers Rihanna and Selena Gomez, and actresses Gwyneth Paltrow, Demi Moore, Julianne Moore and Gal Gadot. She also has her own stores in Manhattan's Tribeca neighborhood and East Hampton on Long Island, and two weeks ago she opened one on Madison Avenue.
The New York fashion industry, just like elsewhere, is experiencing a crisis due to high production costs, soaring rents and customers fleeing to the internet, where everything can be bought cheaply. But Lotan says none of this has affected her business, which she runs herself. On the contrary, she says, having identified the online trend early, she has cooperated with it and benefits from its advantages.
“The internet opened a new world for designers. If in the past the magazines were the ones that set the tone in fashion, today power has moved to the bloggers. The important fashion magazines tended to write about designers who advertised in them, and that cost a great deal of money," she says.
"Today, thanks to the bloggers, there’s a cheaper way to advertise yourself. Most people today get their news from social media, and there the bloggers rule. Happily for me, many of them like what I do.”
Lotan’s clothes are sold in 250 stores worldwide. Most of her customers are women between 25 and 45.
“I’m practical about the clothes I design,” she says. “Many designers try to be artistic and do crazy, unusual things. I obviously want my clothes to look good, but they have to be practical. I’m a size 34, and I try everything on myself before I put anything out.”
This may be why her clothes are more suited to very thin women.
Her clothing ranges in price from $150 to $1,500. A pair of Lotan jeans, for instance, sells for $375. “These aren’t cheap prices in Israeli terms,” she says. “But when you compare them to clothes by other designers sold at Barneys and meant for working women or wealthy women, these are affordable prices.”
Lotan declined to divulge details about the scale of her business but was willing to say that her company’s annual revenues clock up in the tens of millions of dollars.
“People can bring in money and not make a profit, but my business is very profitable. Over the past five years my business volume has grown at an annual rate of 30 percent," she says. "This year I began to sell on a large scale over the internet, and business in this sector jumped 300 percent. I foresee annual growth of 20 to 30 percent in online sales in the coming years.”
In Tribeca, one of Manhattan’s trendiest neighborhoods, Lotan has an impressive studio. Her workshop is in the basement. That’s where her team, which includes two image consultants, a cutter and five seamstresses, develops the collection.
“I design everything here," she says. "Many designers have sub-designers who work for them, but I do everything. I have 50 people who help me with the execution and sales." Every three months she sends out 100 to 120 designs.
"The new trend is to make ‘capsules,’ or mini-collections, which go out to the stores and the website every few weeks instead of a year in advance, as used to be the norm. I make everything in New York, and it’s no more expensive than making it outside the United States," she says.
"True, when you manufacture in large quantities it’s harder, but in the quantities I make it’s possible. Moreover, China has become expensive, and this way I don’t have to travel far away. Only my sweaters are made in China.”
In her studio, Lotan showed me a collection of military clothing from Japan, Korea and the United States that she has collected over the years. “These uniforms are a source of inspiration for me — them and the blue color of the Mediterranean Sea that I saw from my childhood home in Netanya. But I’m explicitly not militarist; my clothing is a kind of ‘they shall beat their swords into plowshares.’”
She says the Israeli facets of her personality are expressed in her clothing; once upon a time they carried tags with the number 2609988 — her dog-tag number in the army.
Leaving law aside
Lotan grew up in Netanya, a child of Holocaust survivors who met at a refugee camp in Austria and married just two weeks later. After immigrating to Israel, her father and his brother set up a real estate company that put up a raft of buildings in Netanya.
“I was with a mother who was a free spirit," she says. "She taught textile design, and it’s through her that I got to fashion.
Lotan says her father preferred that she become a lawyer, but after he sent her sister to study law when she wanted to be a dancer, he realized he’d made a mistake and let Lotan do what she wanted.
“In his wildest dreams, he couldn’t have imaged that one day I’d have a business with a turnover of millions of dollars. And neither could I," she says. "When I was working in the 1980s for fashion designers Liz Claiborne and Ralph Lauren and earning a six-figure salary, my parents were proud of me. For them, that was the peak. But they never had the privilege of seeing the company I established.”
At age 21, while Lotan was still studying at the Shenkar College of Engineering, Design and Art, she married an air force pilot. When he left the military he wanted to study civil engineering, so they went to New York; that's where their three children were born — Eli, 33, Yoni, 31, and Maya, 22.
"At first I didn’t have a work permit, so I studied at the Parsons School of Design,” she says. “In 1980 I met Uri Bloch, who had a fashion company, and he hooked me up with a woman who designed sweaters. She sent me without pay to South Korea, Hong Kong and Taiwan to design, monitor and supervise the production of sweaters."
One day she got an offer to work for Adrienne Vittadini, an American designer of knitwear who was very successful at the time. Lotan worked there for a few years until she got an offer to join Liz Claiborne’s company.
“There, I served as vice president and CEO of a subsidiary specializing in casual clothing. I began with an annual salary of $75,000, but I was very soon earning $250,000 plus options. But in the end I was worn out. After six years, when Liz and her husband Art left the company, I decided to go too.
“I was in my mid-30s, my parents had started to get old, and I missed my home and Israel. My marriage was also no longer in good shape. In Israel I felt like a fish in water, like a soldier returning home after the war. But my husband and children didn’t want to come back to Israel.”
Faced with this turning point in her life, Lotan consulted Dov Lautman, the founder of the Israeli textile conglomerate Delta, whom she had met while working for Claiborne. “I told him I missed Israel a lot, and he sent me to check out possibilities at Delta. But after a few conversations, he told me, ‘Go back to New York and come back to Israel with a gold walking stick,’" she says.
“And then I joined Ralph Lauren. I worked for him for four years designing men’s clothing, and there I met John Varvatos, who later started Nautica jeans, catering mainly to men. He invited me to join him. After a while, after some hesitation, I joined and designed a line of jeans for women. I was appointed vice president for the design and production of the women’s line.”
Lotan eventually realized that Nautica was up for sale, and there wasn't an interest in developing a strong line for women, but only in increasing the business' value.
In 2004 Lotan opened her own business. “David Chu, one of the designers and partners at Nautica, promised that if I wanted to start a business of my own he'd support me. He invested $25,000 in the manufacture of the first models," she says.
"I opened the business after 22 years in the trade, but the truth is I didn’t know how to manage a company and learned the hard way. Now I think I could have done it earlier. I built up the business slowly but surely.”
Although Lotan manages her businesses, she has never studied business administration. “I once attended a class at Columbia Business School and was bored to death," she says, adding that in 2006 she met an 89-year-old who was once the chairman of the Harvard Business School alumni committee. "He came to my studio once a week and taught me the basics. Suddenly everything looked so simple.”
It's not always the easiest without a business partner or a professional CEO. “If I were to find an outstanding person, of course that would help," she says. "But I haven’t found one.”
Lotan says she took many financial risks during her career, but a close look shows she takes calculated, cautious steps. “I’m careful, it’s true,” she says. “With every decision I risk only my own money. I manufacture when I have orders. I don’t believe that if I spend more money it will necessarily give me more.”
A bit of rock and roll
A good example of Lotan’s caution is her decision to avoid fashion shows. “Fashion shows cost an average of $250,000. The large fashion houses will even spend $500,000 and more for a show. Calvin Klein, for example, has to produce a large show to remain relevant, and he has lots of money to spend," she says.
"I wouldn’t recommend to small designers to have shows, for the simple reason that nobody attends them — the editors of the important fashion columns attend only the large shows. In the end the small designers lose the money they invested.”
According to Lotan, “The third store on Madison Avenue will cost me less than a fashion show, and I hope it will bring in millions of dollars a year. I have customers who come from London or Paris, but most of the customers who come to my stores are from the neighborhood.”
They don’t even prefer to shop on the internet. "It’s true that many people buy online today, but there are still quite a few people, mainly those with money, who enjoy the interaction in the store and want to see and feel the item of clothing,” she says.
During the interview, Israeli singer David Broza sits with us. He married Lotan in 2011 and she lives with him in a luxurious loft in New York. “To me the most interesting thing was to see Nili working during the 2008 financial crisis,” he says.
“Businesses closed at a murderous rate, but even during those difficult times her company continued to grow. She continued to work with the stores that were having problems and said ‘pay me when you can.’ That’s contrary to the logic of the business world.”
Lotan adds: “During the 2008 crisis I lost a million dollars on the stock market. I fell there just like others did. After I discovered the extent of the loss I didn’t sit and cry. The next day I went to work as if nothing had happened.”
So where does she see her company five to 10 years?
“I hope not to grow too much, though I assume I’ll have more employees. I can decide to eventually have a business that has sales of $100 million a year and more by going out to the department stores, or remain true to myself and do exactly what I want to do. I really don’t want to grow too much and damage my integrity," she says.
“When you go beyond $100 million, you have to make big changes in the company, like taking production outside the United States, and I want to produce here, to be near the production, to see the process from up close, up until the final result," she adds.
“What’s happening to me is no coincidence. It’s not a matter of luck and timing, and not only a matter of talent. I’ve come a long hard way, sometimes at the expense of my three children. Many long days on a few hours of sleep, and far from home, which for me is Israel. The truth is, the motivation isn’t the money but my love for what I do. What’s that expression? It takes 15 years to succeed overnight.”