Radical Retailing by Design
Alumnus Michael Preysman has created a revolutionary model for online retail that has disrupted the fashion industry.
Michael Preysman (E 2007) has taken an unprecedented approach to selling clothes through his company Everlane. The philosophy of “radical transparency” ― giving customers in-depth product information for making informed buying decisions ― has dramatically differentiated Everlane from its peers.
Founded by Preysman in 2010, Everlane is a direct-to-consumer clothing retailer with a brick-and-mortar store in its headquarters city of San Francisco and another in New York City. It offers “modern basics” made of high-quality, sustainable fabrics and leathers. The company earned $100 million in revenue in 2016, according to Privco, a firm that analyzes private company financial information.
Everlane works hard to deliver on the values set forth in its tagline “Exceptional quality. Ethical factories. Radical Transparency.” Reliance on these values dictates the products offered, which are produced by 25 carefully selected, socially responsible factories across the world. For example, the company began offering jeans in 2017 only after it found a denim-producing partner factory that meets its strict standards of negligible waste water and byproduct recovery.
Preysman has built something new and ground-breaking with education and experience unrelated to retail. At Carnegie Mellon, he double-majored in electrical and computer engineering and economics. He was motivated by ideas shared between other budding entrepreneurs in business competitions held at the Donald H. Jones Center for Entrepreneurial Studies (now part of the Swartz Center for Entrepreneurship).
“Entrepreneurship competitions very much gave me the perspective on how you come up with a business plan, how you figure out what the right thing to do is, how do you bring it to life, and is it going to be successful or not,” he says.
Preysman has always been driven by understanding how things work. He says: “Computer engineering is the theory of how computers work, and economics is the theory of how economics works and how the world economy functions. After graduation, I went into private equity, which is a way of combining computer engineering and economics to understand companies. Then I discovered that I didn't want to invest in companies but really wanted to run them. Everlane was born.”
The concept of radical transparency means that Everlane is open about the “footprint” of its products. Preysman explains: “We educate customers and give them full ability to understand how much the products cost to make, what they're paying for, where the products are made, how the people who make them are being treated, and the products’ environmental impact.”
The retailer’s thoughtful and focused customer experience has attracted customers ranging in age from 20 to 60 who are interested in making the world better, but not necessarily having the time to do so.
Though Everlane sells clothes and fashion, Preysman emphasizes that it is not a fashion company.
“We think of ourselves as a design company. We really consider design a core principle of what we do,” he says. “It comes through in the way we design and tell our stories, and in the products we make.”
His engineering training has shaped Everlane’s culture. The phrase “always ask why” underpins all decision-making. The team revisits problems to be sure the most efficient solution is in place and works “to continue to get better and better and better over time.”
Preysman has been inspired by what he can achieve through this company and how it is changing an industry. “CMU is a great training ground for fundamental education, and what you do with that education is ultimately in your own hands,” he says. “Starting a company always comes with its downsides, but the upsides and the impact you can have on people's lives are so great.”