Faherty Brand: how twin brothers built a $250M coastal fashion company

Executive overview

Mike and Alex Faherty spent 12 years preparing before launching their clothing brand in 2013 — Mike at Ralph Lauren mastering garment engineering, Alex in finance saving capital and learning business fundamentals. Most DTC investors at the time pushed founders toward pure online models, but the twins chose wholesale, brick-and-mortar, and e-commerce simultaneously.

That contrarian multi-channel bet, combined with bootstrapped discipline and a refusal to take venture capital, took Faherty from a board-shorts website to a $250M brand with 81 stores.

Patient, deliberate preparation and a multi-channel model built a durable brand that VC-fuelled rivals envied.

The 12-year runway before launch

• Mike wrote a college essay about "Coast to Curb" — surf-meets-city clothing — and never deviated from that vision
• Mike studied fashion design at WashU, was the only male student in the program, sewed through the night after basketball road trips
• He spent eight years at Ralph Lauren on the Double RL line, travelling to Hong Kong, India, Taiwan, and Japan four times a year learning garment engineering at the factory level
• Alex studied finance at Yale, worked in private equity, and deliberately took consumer-sector deals to learn apparel economics
• Alex bankrolled early development while Mike was at Ralph Lauren; they spent two years just trying to name the brand before settling on their surname
• Their father advised Alex to stay in finance; a mentor called leaving "the dumbest thing I've ever heard"

Building the product from scratch

• First product was a men's board short made from a custom blend of recycled polyester and 17% cotton — hydrophobic but soft to the touch
• Mike sourced recycled filament yarn from Unifi (South Carolina) and worked through six fabric trials to get the hand-feel right
• Factory relationships from Ralph Lauren were foundational; one factory owner became an early investor and opened his floor for the first production run
• The brand positioned itself between cheap surf labels (Quiksilver at $69) and luxury swimwear (Vilebrequin at $250)
• First inventory deposit for board shorts: $150,000, funded by Alex's savings

The mobile beach house and early sales

• Launched the website from Puerto Rico in spring 2013 with only board shorts and women's bikinis; got early press but sales quickly went quiet
• Built a custom timber-clad trailer on hydraulics — two sides opened onto porches — and drove a 35-day U-shaped route across the country
• Sold $1,500 on the side of the Pacific Coast Highway at Big Sur; the trailer doubled as their trade show booth at New York and Las Vegas shows
• Raised a $1M angel round from 44 investors (checks from $5K to $100K), all friends, family, and loose ties
• Year-one target: $1,000/day in sales; actual result: ~$350K, almost all from wholesale and the road trip, not e-commerce

The wholesale-first strategy

• Alex studied 10-Ks of Ralph Lauren, Coach, and Louis Vuitton; their business plans always showed ~50% wholesale, ~50% retail/e-comm
• Chose wholesale over pure DTC because they lacked VC capital — the factoring industry (PO financing against retailer orders) provided working capital at 10–12% interest without dilution
• Annual losses stayed at $400–500K rather than the $20M burn rates of venture-backed peers
• Nordstrom came in at 10 stores in the first season; Barneys in season two; Japan (Journal Standard, United Arrows, Isetan) accounted for ~40% of first-year wholesale revenue
• Department stores were slow to convert; early wins came from owner-operated specialty retailers who sold what they bought
• Plaid flannel shirts became the first Nordstrom velocity product — filling a gap in the 2014–16 market between preppy and contemporary

Building brand awareness on a tight budget

• Founders visited all 10 Nordstrom doors personally, repositioned their product on the floor without asking permission — still do it today
• Cultivated department-store salespeople directly, finding that one conversation paid dividends far beyond what advertising could achieve
• First paid media was a print catalog in holiday 2015, inspired by J.Crew stopping theirs — it generated actual 1-800 phone orders
• The "legend sweater shirt" (flannel meets sweater, launched 2016) was the first product that sold out on contact and proved the direct-to-consumer thesis
• A Nantucket customer emailed hello@fahertybrand.com in ~2016 offering to invest; he became their first meaningful outside investor and provided the capital for the next phase

COVID and the retail expansion

• Going into 2020: 70% of revenue was wholesale and stores, 30% e-commerce
• When stores closed, the business nearly collapsed; Alex briefly returned to his old investment firm as a consultant to cover personal expenses
• E-commerce grew 100% year-over-year once they redirected wholesale inventory to online — and at meaningfully higher gross margins
• Six of 11 stores were in resort towns (Nantucket, Martha's Vineyard, Sag Harbor); these reopened to 60–100% year-over-year growth in summer 2020
• Inspired by Ron Shaich's Panera recession-expansion playbook, they signed 40 leases across 2020–21 at depressed rents with heavy landlord allowances
• Went from 11 stores to ~40 stores by end of 2022, and 81 stores today; construction was kept affordable by an in-house fixture-building team in a New Jersey warehouse

The cost of rapid growth and the path forward

• Post-COVID revenue focus came at the expense of margin discipline; when the tailwind faded in 2022–23 they had too many staff
• Laid off ~50 people (more than 10% of headcount) — described as the hardest thing they have ever done
• Supply chain is now deliberately global and asset-light: Faherty owns the fabric recipe and yarn specification, making the factory relationship less critical and enabling rapid tariff-driven sourcing shifts
• Mike and Alex have sold a minority stake to outside investors but have no intention of selling the business; they cite Ralph Lauren's sustained founder ownership as the model
• The original mobile beach house was destroyed in a fire in summer 2025; a replacement is being built