Seventeen years ago Evan Toporek walked into his room at his parents' house in Augusta and found a stranger named Greg Alterman jamming on his drum set. It was an uncomfortable start to a profitable relationship.
Today Toporek and Alterman are partners at Alternative, a Norcross-based clothing company known for its super-soft designer T-shirts.
Hyosub Shin/hshin@ajc.com | ||
| Evan Toporek is chief operating officer for Alternative, which is known for its super-soft shirts. | ||
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Alternative's revenue has grown 40 percent each of the past four years, and on June 5 it announced funding from Rosewood Capital, a private equity firm that specializes in consumer products.
The investment is a $25 million endorsement for Alternative. First, the San Francisco-based firm is picky when it comes to investments. Rosewood Managing Director Tim Burke said the firm signs with one of every 500 companies it reviews.
Second, Rosewood has a good track record with clothing companies. The firm was the first investor in Under Armour, the Baltimore-based company whose gear is marketed by professional football stars like Ray Lewis and Vernon Davis.
Burke said that when Rosewood invested in the company in September 2003, Under Armour's revenue was $75 million a year. Two years later annual revenue was $281 million and the company was going public.
Burke said Alternative might not grow as fast, but there are similarities between the two companies: Both have been able to create an aura of "authenticity" around their products through focused branding efforts.
Alternative plans to use the Rosewood partnership to expand its product line, open the first Alternative retail stores and market itself as a lifestyle brand.
Toporek describes the typical customer as a free-thinking member of the creative class of urban hipsters.
Although the company does not use paid endorsements, Alternative showcases on its Web site celebrities spotted wearing its clothes, from George Clooney in a gray T-shirt to Jessica Alba in a vintage black cap.
The company offers shirts, hats, scarfs and bags. But eventually Alternative wants to dress customers from head to toe in its products — Toporek said it plans to add shoes, sunglasses, jackets and jeans in the next few years.
Alternative also plans to open five to 10 stores in major markets like New York City and Los Angeles, starting early next year.
Although this may draw comparisons to American Apparel, another avant-garde T-shirt manufacturer, Toporek said his company has no plans for a store on every corner. He calls such a growth strategy the "McDonald's mentality." Instead, he said, Alternative's handful of stores will be used mainly to test new products and develop the brand.
A 'free-thinking' culture
Alternative's vision of becoming a lifestyle brand extends to its corporate culture.
The company spent about $125,000 renovating its offices in Norcross in the style of a trendy restaurant or loft apartment. Yoga sessions for the 80 employees in the Norcross office are offered twice a week.
Instead of a mission statement, Alternative has a "reason for being": "Alternative exists to promote the quest of free-thinking people to individuate by encouraging them to wear T-shirts when and where they want."
The company's employees live up to at least part of that motto: There's not a tucked-in shirt to be found in the office.
"It's Kool-Aid we've mixed and drank and believe in," Toporek said.
Burke said that for Alternative, a hipster atmosphere doesn't interfere with a tightly run and ambitious operation.
Although the company promotes "free thinking," Alternative closely controls its image. All of its marketing is created in-house, including the catalog and most of its public relations. The company employs a full-time stylist and photographer to handle all of its photo shoots.
"Everything we do we have to think, 'Is this Alternative?' " Alterman said.
Toporek said Alternative is in position to outmaneuver the competition. First, Alternative's T-shirts generally sell for between $22 to $35 — a premium compared with plain old T-shirts but affordable when compared with items they compete with at designer stores, he said.
Second, unlike larger operations, Alternative is able to ship to retailers small quantities within a few days of the order. Toporek said that "fast-fashion" capability allows stores to determine which items sell best and better plan future purchases.
"You're taking the risk away from the buyer," he said.
That old T-shirt feel
Alternative's origins stretch back 20 years to Alterman's college days at the University of Florida. As a freshman he started printing humorous slogans on T-shirts and selling them on campus.
Alterman said he was discouraged with the quality of T-shirts he was using — they were too coarse and didn't fit well. So after graduation he found a beloved old T-shirt and asked a Chinese factory to duplicate the feel of the fabric.
The finished product was thinner and softer, with a higher thread count and better yarn. With that shirt, Alterman formed Alternative in 1996. The next year he called Toporek, who he had met in 1991 when a mutual friend had brought Alterman to Toporek's parent's house in Augusta.
Toporek had previously worked for Andersen Consulting (now Accenture), and Alterman brought him on as a partner and chief operating officer.
Alternative continues to sell clothing to promotional companies, but it has since expanded into two other markets. The company sells its products to licensees that print logos on the products and resell them. And Alternative sells blank clothing items to retail stores and directly to consumers through its Web site. Toporek said this third market is the company's fastest-growing.
This year he expects Alternative to ship 12 million T-shirts.
Alterman works out of Alternative's Los Angeles design studio, and Toporek runs the company's headquarters and 60,000-square-foot distribution facility in Norcross.
"I'm the gas, and he's the brakes," Alterman said. "I'm the one with the creative ideas, saying go-go-go-go-go. He's the one with the rational side, taking out spreadsheets and stuff."
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