Karl Kani Infinity, Inc. Business Information, Profile, and History

Company Perspectives:

Our Philosophy is to believe in ourselves as prominent African-American designers; to understand our customers' needs and design our clothing with this in mind.

History of Karl Kani Infinity, Inc.

Karl Kani Infinity, Inc. designs and markets clothing intended for African American tastes and physiology. Fashion designer Karl Kani made his name as a pioneer of baggy designer jeans and colorful shirts for black male youth in the early 1990s. Since then Kani has expanded his clothing line to include business casual, under the Karl Kani label; tailored clothing, using the Kani label; and sportswear, under Karl Kani Black Label. Casual and athletic styles are labeled as Kani Endurance. Karl Kani Infinity designs and markets clothing for African American women, children, and infants as well. Karl Kani Life is a line of denim clothing available in men's and women's fashions. The company's clothing is sold in upscale department stores and specialty clothing stores worldwide.

Karl Kani: From Local Hit to National Force in Fashion

Carl Williams changed his name to Karl Kani--pronounced, "Can I?"--to reflect the mantra that he awoke with every morning: Can I do it? Can I become the "Ralph Lauren of the streets?" Kani began to make clothing for himself in the mid-1980s while attending high school and working as a newspaper carrier. Kani disliked many of the designer clothes available in stores, particularly the slender jean styles that required African Americans to purchase large waist sizes so that the jeans fit their hips. Kani began to design his own jeans, with loose-fitting legs and hips and a proper fit at the waist; a tailor then constructed them. Kani's friends and neighbors in the Flatbush area of Brooklyn liked the styles, casual knit shirts as well as the baggy jeans, and requested such clothing for themselves. A hands-on business course at his high school helped Kani develop his hobby into a business. Through word-of-mouth Kani's designs attained local popularity and soon Kani began selling jeans and shirts at local basketball tournaments and outside Manhattan nightclubs. Thus Kani helped to start a revolution in fashion with a black urban style that would attract young suburban males as well.

In 1988, at the age of 19, Kani decided to move to Los Angeles, the manufacturing center of the clothing industry. With $1,000 and a few clothing samples, he opened Seasons Sportswear in the Crenshaw district of south central Los Angeles, living and working at the store, producing clothing in the back. Three months later, however, a burglar stole his samples. Kani closed the shop and began making clothing in his one-bedroom apartment in Hollywood. He promoted the clothing line by selling catalogs for $2 each for mail-order sales that kept him in business. He also sold his clothing on the streets. Kani designed a new line of clothing to prepare for MAGIC, a fashion industry trade show held every February in Las Vegas. Kani did not have funds to pay for a booth, so he circulated his business cards and invited buyers to view the clothing at his hotel room. In addition to baggy jeans and casual shirts, Kani offered heavyweight fleece "hoodies" (hooded jackets), color denim jackets, and jean and velour sweatsuits in bright colors. Shirts, hoodies, and certain other pieces featured the Karl Kani logo in huge letters.

The hip hop style of clothing designed for the African American physique gained in popularity and Karl Kani obtained sales from clothing stores that catered to urban blacks. His first wholesale orders came from specialty stores, such as Simon's in Brooklyn and Up Against the Wall in Washington, D.C. Other customers included Strictly Sportswear in Detroit; Tuckers Department Store in St. Louis; Cavaliers in Washington, D.C.; Montego Bay in Queens; and Puffer Red in Ypsilanti, Michigan. Karl Kani clothing became popular with several black rappers and athletes, including Dr. Dre, Kool G Rap, Ed Lover, Mike Tyson, Heavy D, and Big Daddy Kane.

Kani's breakthrough to national sales occurred when he joined Threads for Life. In 1990, at a party at The Paladium Club in Los Angeles, Kani met Carl Jones, who had developed the Cross Colours line of multi-ethnic clothing. Impressed with Kani's designs and sales potential, Jones invited Kani to join his company as his own division and offered to provide contacts and financial support. The following year Kani joined Cross Colours and moved into a 50,000-square-foot warehouse. His first week there Kani received a $3 million order from Merry-Go-Round, a chain of retail stores. Soon Karl Kani clothing was available in national and regional chains, including Oak Tree, one of the country's largest chains of men's clothing stores. His big breakthrough came in 1992, when Macy's Department Stores began to buy Karl Kani designs for urban locations. Karl Kani pants and shirts sold for $65 to $70 retail, T-shirts for $36, and jackets for $80 to $90.

With Karl Kani and Cross Colours at the forefront of a fashion revolution, Threads for Life revenues increased from $15 million in 1991 to $89 million in 1993. The Karl Kani division accounted for 40 percent of revenues, approximately $36 million in 1993. The popularity of Cross Colours and Karl Kani clothing presented several problems for the company. The backlog of orders and the attendant problem of order fulfillment required the company to seek licensing partnerships for clothing production in 1993. The transfer to licensed manufacturing occurred so quickly, however, that many orders went unfilled. Also, the company overextended itself financially in its attempts to accommodate rapid growth.

Despite these difficulties Kani introduced his first line of footwear in stores in November 1993. The footwear, including high-top boots for $130 and sneakers for $70, was an immediate success. A $500,000 television advertising campaign involved spots on MTV, BET, and network television.

Reclaiming Control in the Mid-1990s

The difficulties at Threads for Life, including his own unhappiness at having to obtain final approval for his designs, prompted Kani to separate from the company and start anew. He learned much about the clothing industry from Jones, such as trendsetting, how to make contacts, and about the marketplace in general. Kani decided to use this experience and $500,000 in profits to start Karl Kani Infinity, purchasing his trademarked name from Jones in 1994.

As CEO of his own company, Kani hired experts in the clothing industry to handle sales and administration while he focused on clothing design. From Threads for Life he brought in Jeffery Tweedy as vice-president of sales and marketing and A.Z. Johnson as West Coast account executive. For president Kani hired Derek Tucker, former president of Oaktree, who was responsible for bringing urban streetwear to that chain.

As problems from Threads For Life followed Kani to his new company, he sought to rebuild trust with former customers. He promised to fulfill purchase orders, with customers cautiously placing small orders at first. Kani formed licensing partnerships carefully, choosing those that provided control over how much merchandise was sold, when, and where. Karl Kani staff were situated at offices of licensees, foregoing the customary minimum sales guarantee in exchange for staff involvement in the daily business of manufacturing. Karl Kani received royalties of 8 percent to 14 percent, higher than the industry average. Karl Kani Infinity recorded $43 million in revenues in 1994, its first year, despite a problem with counterfeit Karl Kani clothing.

Karl Kani began to diversify the line of clothing options to attract a broader customer base. New products included a line of clothing for big and tall men, prompted by Kani's conversations with professional basketball players too tall for his clothing. In February 1995 Karl Kani launched a line of boys sportswear, sizes 4-20, including jeans, T-shirts, sweatshirts, jackets, and leather vests and jackets. A line of men's leather goods and outerwear was introduced the following August.

Karl Kani licensees distributed clothing to department and clothing stores worldwide, but for Kani the big coup came with the opening of concept shops specifically for Karl Kani fashions. In November 1995 A&S in Brooklyn opened a 1,200-square-foot concept shop for Karl Kani designs and Macy's 34th Street store in New York offered 1,000 square feet of space. Kani appeared at Macy's on his 27th birthday that November to launch the shop. The event involved a fashion show of men's and boys' wear as well as a preview of the new women's collection. The spring collection included lycra dresses, linen skirts and jackets, stretch denim jeans, and terry sweatsuits.

By the end of 1995 Karl Kani clothing sold in over 300 stores nationwide, including Nordstrom, Dayton Hudson, Belk's, and Maison Blanche, while overseas sales originated in England, Germany, and Australia. The company opened offices in Taiwan and Hong Kong to oversee offshore production and distribution, including manufacturing activities in the Philippines, China, and Macao. Footwear sold in 14 countries, including Japan, Switzerland, Belgium, France, and the Czech Republic.

Karl Kani Infinity reported $69 million in revenues in 1995. The distribution of sales covered jeans at 45 percent of revenues, footwear at 30 percent; children's clothing accounted for 15 percent, and outerwear covered the balance at 10 percent. Of domestic sales, 40 percent originated along the East Coast with New York and Atlanta being the largest markets for Karl Kani designs. Chicago accounted for 15 percent of sales in the Midwest. In 1996 Karl Kani Infinity was listed number 25 on Black Enterprise magazine's list of the top 100 black-owned businesses based on 1995 sales.

Karl Kani fashions continued to find new outlets in urban as well as suburban stores in 1996. Marshall Fields in Chicago opened a 500-square-foot concept shop and Macy's at Fulton Street in Brooklyn and Atlanta's Lenox Square accommodated Kani shops as well. Karl Kani's reach extended to some suburban and mainstream retail outlets, though the company encountered resistance to a stereotype of the Karl Kani customer in reference to the rapper lifestyle. To reach potential patrons in these markets Karl Kani advertised in Rolling Stone and GQ magazines, as well as Ebony Man. Rappers Tupac Shakur and Aaron Hall were featured in some of the ads.

Kani felt that promotion of the company required his personal involvement, in addition to clothing design, so that his audience knew the man behind the designs. He attended fashion events at department store concept shops as well as at other public events. He attended trade shows to stay abreast of buyers' preferences. Also, he visited friends and neighbors in Brooklyn every few months to maintain contact with the clothing styles they liked and to spot potential trends.

Developing New Styles, New Clothing Lines: Late 1990s

Karl Kani offered a variety of designs as it expanded the number of clothing lines. Fall 1996 designs included racing, rugby, and university themes. Racing styles included casual tops with several zippers. Rugby styles bore vertical or horizontal stripes, flags, patchwork, and rubber buttons. Under the promotional line "Kani State," university designs involved cardigans with stripes or crests. A new line of outerwear included reversible bubble jackets with detachable arms, available in bright primary colors.

Recognizing that his customer base had matured beyond baggy jeans, Kani introduced lines of dress clothing and business casual clothing. Incorporating sophisticated designs, the couture line, manufactured in Italy, offered suits, slacks, blazers, and shirts in gabardine, worsted wool, silk, cashmere, and linen. Retail prices ranged from $1,200 to $1,500. In 1997 Karl Kani introduced the new Black Label line of sportswear. The collection included Eisenhower jackets, cotton or wool pants, knits, and shirts. Maintaining his sense of style, Kani designed traditional oxford shirts, but in a fuller cut and with bright colored stripes. Price points ranged form $80 to $120 for shirts, and $150 for pants. The line included lower price points for jeans, at $40 to $60, down from $75 to $110. To display the wider variety of Karl Kani clothing, the company opened a 4,600-square-foot showroom in New York.

In 1999 Karl Kani formed new divisions by label to differentiate the various lines of clothing. Casual and athletic styles were placed under Kani Endurance, tailored clothing under the Kani label, business casual under Karl Kani Label, and sportswear under Karl Kani Black Label.

Karl Kani hoped to maintain his original customer base and still attract younger fashion buyers. To celebrate the ten-year anniversary of Kani's business, the company launched Karl Kani Limited Edition, a collection of the original designs that made Karl Kani popular with young, urban men. With production limited to 50,000 pieces, Kani's first customers were given sales preference.

Kani continued to create new clothing designs, seeking to create and promote new trends. For 1999 new additions to the Black Label collection included merino wool sweaters and sweater vests, Pima cotton shirts, leather-front shirts with wool sleeves, and unconstructed jackets. Jean styles for spring included color washes in orange, green, red, purple, and sky blue, as well as a dirty denim wash that made blue jeans look like they had been dipped in petroleum. At the February 2000 MAGIC trade show, Kani's new collection came together under the theme "Minks & Jeans," featuring outerwear and jeans. The line included denim pieces with mink trim. Mink, rabbit, fox, or beaver parkas were available in three-quarter or full lengths. Karl Kani designs were distinct from other clothing lines in that fur was available dyed in burgundy, electric blue, baby blue, and black.

Kani explored a variety of options in expanding and promoting his clothing business. Kani considered license options for underwear, loungewear, eyewear, home furnishings, and fragrances. The company looked at possible cooperative opportunities in different media, such as the Black Entertainment Network (BET) and movie and music production. In a reverse of popular rap stars starting clothing lines, Karl Kani decided to start a record label. Called Kani Life, the label signed promising rappers, such as Stacks and Pulle Black, and used them as models to advertise Karl Kani clothing. The company planned to cross market the clothing with music samples in the pockets of blue jeans and offering free CDs with a clothing purchase.

In August 2001 the company launched a new clothing design concept, Karl Kani Life, a collection of denim clothing. The line featured slim silhouettes with futuristic washes, such as bleached and color sandblasted. Karl Kani offered both men's and women's lines, the latter introduced in November for the winter holidays. The $3 million advertising campaign involved hand-drawn sketches of denim urban apparel. Advertising venues included a billboard in New York's Times Square and spreads in Vibe, Galmour, Honey, XXL, Maxim, and Essence magazines. Karl Kani continued with the line with similar styles for 2002.

Often referred to as the "godfather" or "grandfather" of urban street clothing, Kani received recognition for his contribution to fashion in 2002. The Urban Fashion Community recognized Kani with the Urban Fashion Pioneer Award, presented at a gala event along with other fashion awards in June.

Principal Competitors: FUBU; Maurice Malone Designs; Phat Fashions LLC; Tommy Hillfiger Corporation.

Chronology

• Key Dates:
• 1989: Fashion designer Karl Kani opens Seasons Sportswear in south central Los Angeles.
• 1991: Karl Kani joins Threads for Life with his own division.
• 1994: Kani severs relationship with Threads for Life and forms Karl Kani Infinity.
• 1995: Karl Kani concept shops open in New York, Chicago, and Atlanta.
• 1999: Karl Kani forms new divisions for diverse lines of clothing.
• 2001: Karl Kani Life is launched with a record label and major advertising campaign.
• 2002: Kani receives the Urban Fashion Pioneer Award.