Kotn’s People Business
Rami Helali says he isn’t the sort of person to take six months off to do nothing. This appears to be true on first impression: the Kotn co-founder sits quietly in the brand’s Toronto store on Queen Street West—weeks before COVID-19 changed everything—answering emails and putting out figurative fires while waiting for this interview to start. He’s focused, determined. Doing nothing is not his personal brand, he says with a bit of a smile. Almost six years ago when he tried to do nothing, Helali traveled to Egypt for a family wedding, and just stayed, he says.
For as long as he needed to make a single, perfect T-shirt.
By Sarah MacDonald
Kotn is a fashion brand that’s in the business of making essentials that won’t break its buyer’s bank account or sacrifice product quality. Egyptian cotton, also known as Gossypium Barbadense, is a stronger, finer cotton that is incredibly soft. The Canadian company is part of a new wave of direct-to-consumer brands that offer specialized products millennials and Gen Z-ers are gobbling up. Along with Helali, Kotn was formed and is run by Benjamin Sehl and Mackenzie Yeates, both of whom were interested in starting their own business, too. Sehl jokes he and Helali must have conceived a million different business ideas. But the business that would become Kotn was different from the start.
The founders set out clear parameters from the beginning to incorporate an ethically framed ethos into their business. Egyptian cotton has a long and complicated history. The material was very valuable for almost a century but started to falter and dip considerably in the early 2000s. Kotn’s founders care a great deal about the welfare of their manufacturers and farmers, the people making their wearable products. Helali, Sehl, and Yeates decided to work directly with the farmers in Egypt to create a unique farm-to-store model, an innovative supply chain approach in the apparel market.
In a 2015 interview, with the company still in its infancy, Yeates said she and the other founders of the then new brand wanted to “affect change in the region through trade, not aid.” For a young fashion brand that began with a classic men’s T-shirt, they are remarkably successful with this goal and many others almost six years on.
Still, Yeates says, there are some obstacles when it comes to scaling and growing the brand. “When you’re scaling a brand, every new stage of growth comes with a whole new set of challenges. From learning how to coach and direct people to managing cash flow, the feeling of not knowing what you’re doing never ends. We’re lucky to have some amazing people on our team now that can help fill in the knowledge gaps that we have. It’s certainly not easy but it’s definitely rewarding.”
2020 proved to be a year of obstacles, challenges, and, ultimately, successes. This initial conversation I had with the brand founders happened nearly a year ago. Since then, I’ve watched as their normal working life completely upended to focus on survival and safety. Soon, they began working within a brand new framework. Kotn managed to grow to new production spaces beyond Egypt, introduce new products, and develop key goals for 2021. Then and now though, their commitment remains to the people of their business, the region their material namesake comes from, and trying to make a positive imprint on the world.
Egypt’s “white gold”
Egyptian cotton has long been known as a high-quality material. “The fame of Egyptian cotton is much like that of Italian olive oil or French wine, where provenance has become a shortcut for quality,” The New Yorker reports. In the piece, Helali is quoted saying, “People still place a value on Egyptian cotton. I think they see the name and they think ‘luxury’ and ‘expensive.’”
Egyptian cotton rose to its modern prominence in the 19th century because of the American Civil War. Cotton production’s racist history in the American South is well known and documented but before the war, the fiber in America’s South was highly sought after by European companies: About 80% of the cotton produced in the South went to British textile mills. During the war, cotton prices increased, causing those at the textile mills to look for different sources. By the end of the 19th century, Egyptian cotton, “discovered” by a Frenchman looking at a wilting cotton plant in Cairo, would surpass that of the American South’s production, producing over 90% of the country’s overall revenue.
Since then, according to Reuters, there has been a 95% decline in demand for Egyptian cotton from big corporations. The shift away from Egyptian cotton directly impacted the millions of farmers, weavers, and craftspeople in Egypt, making it harder for them to make ends meet.
The founders say that, before starting this business, they all objectively had the jobs they’d always wanted and dreamed of. The founders have roots in Toronto with Sehl and Helali growing up in Waterloo, a town an hour outside of the city. By 2015, they all lived and worked in New York: Helali in finance, Sehl in web development, and Yeates, whose background was in fashion communications, was a brand director for an agency in the city. “I knew that I wanted to start my own business,” Helali says. “At that time, I felt like I had a job that was a dream job, and if I didn’t quit, then I was just going to get comfortable and stay.” The three of them were all good friends before Kotn. (Sehl and Yeates are married, and Helali—jokingly—takes credit for introducing them.) The allure of entrepreneurship hummed behind the scenes. “Mackenzie and I always wanted to start a clothing company,” Sehl says.
Sehl and Helali had the idea of starting a fashion brand when they saw Kanye West’s collaboration with A.P.C. in 2014, with basics running upwards of hundreds of dollars per piece. There’s a polarity, Sehl says, in fashion’s basics: “There were these big gaps in essential pieces—really cheap ones from the big old guys, you know, Gildan and Hanes. They were all very affordable, but not very great quality. And then there were all these other designer ones. They’re all over the place: [You’re spending] $100 for a plain white T-shirt. No matter what we’re doing here, we’re either compromising our price or quality or design or value or ethics.”
- Poor quality
- Low price point
- Low paid workers
- Reasonably priced
- Quality product
- People focused
- For profit
- Over priced
- Quality varies
Each founder individually felt compelled to change how buyers interact with something they come in contact with every single day: the T-shirt. “I don’t know why that specifically” Helali laughs, “[That] extremely simple innovative idea was the one that was like, ‘f--k it. This is the one.’”
One day, Helali rambled to his mum about the idea, Sehl says, and she offered some insight on where and with what material these T-shirts could be made out of: Her cousins worked on a cotton farm in Egypt.
From there, Kotn sought to make a single, quality men’s T-shirt and build the brand up from that. Yeates told Forbes that starting with menswear was a bandwidth decision; that the fledgling company could produce the quality items it had long sought and fill the menswear essentials with fewer items than products for women. The team relocated back to Toronto, and even set up shop in Yeates’s parents’ basement at the very beginning. It was a scrappy enterprise where all founders wore several different hats to get the company up and running. “For the first two years, it was just the three of us and our amazing intern, Heather, who is still with the team. We bootstrapped to get it off the ground and we were trying to learn about product development and production along the way, so we were strapped for cash and time,” Yeates said in Forbes.
Even now, nearly six years on, they remain steadfastly hands on and scrappy in their pursuit of fashion essentials, incorporating different styles and products into their online and physical stores. Yeates points to a display of trousers in their Toronto store’s window: She made them herself and her father helped hang them.
Kotn goes farm-to-store
Kotn works directly with Egyptian farmers, an industry the world seemingly held up as luxury but then turned away from. “For us, it had to be authentic to our process and to the community that we work with,” says Yeates of choosing this pathway. By working with farmers, she says, they can offer them guaranteed pricing and provide subsidies, while cutting out an intermediary, and passing cost savings onto Kotn’s customers. “In this relationship with our farmers, we get to be up to date on what crops are coming out—and sometimes it changes with the different types of fibers. We get to understand those things directly from the farmers.”
Similar big name brands have long struggled with the ethics of their manufacturing and supply chain choices, often choosing to spend less and sacrifice where they can—in many cases the lives of its workers—to ensure a lower cost in the end. “Once you meet these incredible people doing all of this really honest, amazing work, and they’re supporting these communities, then you see this whole chain. When we started Kotn, fast fashion was in full force. It was a pretty glaring issue. When you see those problems, you can’t unsee them,” says Sehl. “I think anybody would make the same decisions that we made if they ever looked into what [some companies] were doing. Some of the larger companies [that we’ve talked to], all want to shift to a model like ours. But at a certain point, you get so big, it’s hard to change those foundations. For us, it was really important when we were starting the company to look at these foundational choices of the business.”
“Right now we have the benefit of the Internet. We have the benefit of globalization. We have the benefit of this global village. Let’s take advantage of that and really work directly with each person in the supply chain. We don’t have to have all these middlemen. We don’t have to have all these intermediaries. We can work directly with all of them. And by doing that, we can have better value for our customers. And we can also then take any excess value and reinvest it into our supply chain, which will hopefully make even better products in the future.”
“Unlike these large, legacy brands, Kotn was born in a global village in the Internet age. The brand’s global mindset has made it easier to cut out the middleman and to work directly with each person in the supply chain. Perhaps this is what a brand like Kotn can teach larger businesses about—those who don’t yet have such values baked into their practices.”
Helali tells me about the WhatsApp messages he gets from farmers. He once received a message from someone at one of the farms after they clearly watched an Instagram story on the brand’s feed about a new product and he was worried that he had missed some memo somewhere. Helali reassured him he didn’t miss anything. Kotn’s model is a loop: Everyone stays informed as best they can from manufacturing to the executive team.
Theirs is a relationship that is very tightly woven together: Helali goes to Egypt about three or four times a year, he says. The brand now has a team on the ground in Egypt, and they visit the facilities once a week to ensure that everything is working smoothly. They also have an independent agency check on what happens internally. “We make sure that other people are validating what we’re saying and seeing, which is a really important thing as we continue to grow,” he says.
The team says they are personally invested in their team members and where those people work. The entire process works to benefit everyone, not relying on certain ethical audits or certifications like other companies and calling it a day. “You have to balance the small business approach of this, the personal relationships with the people that you work with, and making them real partners,” says Yeates.
An important part of Kotn’s business and its relationship to Egypt are the schools it has built in the Nile Delta, where Egyptian cotton is grown, and where Kotn’s materials are farmed.
Kotn’s website has dedicated sections to their philosophy, business practices, farms and farmers, and schools. Kotn built and opened its first school in 2017. They work with local NGOs to provide a safe environment for the children who attend, who, Kotn notes, have prioritized girls at a 2:1 ratio. On Kotn’s website, one can learn about the enormous gender discrepancy in education provided to children: of the 25% illiterate Egyptians, 70% of them are women.
The brand has a long-term commitment to provide for its schools, including school supplies. All of this costs money but it’s an endeavor all founders are willing to invest in every single year.
“When we were in those communities talking with workers those first six months, we spent a lot of time on the ground understanding what they wanted and what they needed, what the problems were,” says Helali. “One of the biggest things is getting caught in poverty cycles where they’re underpaid. These kids don’t have access to school and, therefore, there is no access to education to go further in their lives. At the same time, there’s a low quality of life so you have higher mortality rates at a younger age. Parents are dying at a younger age. Life expectancy is lower and you get this vicious cycle where they can’t break out of it.”
During Black Friday Cyber Monday in 2019, the biggest and most profitable sales weekend of the year, Kotn decided to instead donate the profits from that weekend toward building schools in the region. Helali says it’s a lifetime commitment, not a strategy. “We don’t really want to be a part of [Black Friday Cyber Monday]. We want to make things that last forever and are essential. We don’t need to participate in this massive sale during these few days. So instead, why don’t we help support the people that make this company possible by just redirecting the funds down during this high consumer spending time?”
2020 marked the brand’s fourth year of opting out of the biggest sales weekend for brands.
This goes directly back to what Yeates said in a very early days interview of the brand’s existence. Kotn isn’t interested in being part of a community or a culture without first understanding the nuances of the region and how it works both in a commerce sense and not. “We tried to figure out what we can do for this community so that if we leave in 50 years, this community is better off than we did before we came in,” says Helali.
Yeates says promoting the stories of their farmers, and Egyptians in general, is meant to be inspirational and not a glimpse at destitution and how a Western brand is helping them out—a tired trope of benevolence that, thankfully, is beginning to stop.
The ethics of ethical fashion
Their product line, Yeates says, is fairly small for being in business five years now, but that’s intentional. “That we haven’t launched many products compared to other fashion brands is because we’ve really been trying to iterate on what we do have and make it better.”
Yeates, who oversees the design part of the work, thinks about longevity and how pieces can be worn multiple ways. “I think that’s the beauty of basics: You can put your own personal spin on it with accessories, and [it’s about] how you style a white T-shirt. Any person can wear a white T-shirt in their own way. And so with the other products that we’re launching, we have that in mind as well.”
There is a quandary almost every single fashion brand needs to contend with now: sustainability. The fashion industry produces 4% of the total global waste per year, which is around 92 million tons. By baking into their ethos longevity over trends, they are setting the brand up for customers to invest in their clothes and not be partial to waste. “There’s still lots of room for growth. We’ve been expanding into all the other essentials that we think are core needs,” says Sehl.
In terms of the sustainability of their product, Kotn is currently working with Better Cotton Initiative.
Still, it’s important to remember that the brand is only six years old and the accomplishments it has made are enormous. “We’re just getting to the point now where we have a team that’s up to speed and we have a supply chain that’s better set up. We have the opportunity to be ordering more and getting in the door with different types of factories,” says Yeates.
A pandemic pivot
When we wrap up the interview, the sun is streaming thick golden blocks into the store, illuminating the turtleneck sweaters hanging next to oxford shirts and button-up dresses. Back in February, the brand had no idea how COVID-19 would change how they do business in 2020. Their stores would close in March, then open up in the early summer for curbside pickup and one-on-one appointments, all while maintaining social distancing protocols. During this time, the brand ran a few limited edition runs on existing an product with Toronto artist Jess Chen, who illustrated the Nile River on a long-sleeved tee, and then a sublime floral design on their signature oxfords. How Kotn responded in the early days of the pandemic is how they ensured their farmers responded: putting the summer collection on hold and sending their farmers home to keep them safe.
In March, first and foremost, Yeates says that the founders thought of their employees’ needs, like how they were going to pay salaries and keep everyone healthy. However, she enjoyed thinking up solutions while their retail stores were forced to close because “solving problems and changing things up is what [gives] entrepreneurs energy.” The fairly small size of the team meant they could stay nimble with the near-daily changes in the news about the virus.
Remarkably, Kotn’s community, too, would help energize the team. Yeates says their team quickly decided to shift their focus on growing and strengthening their bond with their community and building up customer love. “Being a small team, and having a traceable supply chain, allowed us to quickly understand how everyone in our production stack was being affected by the pandemic,” she says. “It was so heartwarming that some of our customers were reaching out, asking about the well-being of the people we work with in Egypt, and including us in round ups of small businesses to support.” With 115K followers on Instagram, that is a lot of customer love and loyalty.
Where the Kotn team would have spent their time working on shooting and promoting new products, they shifted to communicating with customers—trying to provide value to them on their social channels was more relevant to the current climate. “Our community has responded so well and really stood by us through these turbulent times,” she says.
In turn, Kotn wanted to give back to the community. “We knew we wanted to contribute to the personal protective equipment (PPE) shortage in some way but we weren’t sure how our factories in Egypt were shut down. Rami put out a message on LinkedIn and the H Project team at Holt Renfrew jumped in with a solution to use our deadstock fabric and have their alterations team work on making masks from home. Our Brand Marketing Manager Naomi Nachmani and I both worked on the H Project team in past roles so they are like family to us,” says Yeates. “It was so awesome to collaborate with them on this initiative. I think the main learning is just that companies of all different sizes can come together and share resources and information to contribute to the common good.”
Kotn’s pandemic year yielded some other interesting pivots and expansion: spearheading a pay-it-forward campaign for unsold stock; doubling down on loungewear, like almost every other fashion brand; and moving some production operations to Portugal, with a goal to expand further beyond there and Egypt. They even introduced a stunning new home collection. In 2021, the brand is exploring how to use recycled and natural materials to produce less waste, adhering to their earlier promises to become even more sustainable. It’s a marvel to see brand commitment threaded through arguably one of the most precarious and unprecedented commerce periods in modern history. Yet, every Kotn promise begins and ends with people, and how to ensure profit isn’t always the return on investment.
The pandemic has accelerated so many parts of commerce such as having a strong digital presence and a real connection with buyers to keep staying afloat. But Kotn has always been a people business first: touching parts of the digital world with their online community, loyal in-store buyers learning to adapt, and the bigger picture that a sustainable world helps everyone, not just customers. Perfecting basics is their product goal, and consumers respond positively to it time and again, even in the face of growth.
“I’m pretty happy that customers choose us for a product first. They choose us for quality, and then how a piece looks and feels,” Sehl told me then. “People can learn and care about what we care about, maybe influencing other companies to do so, too. Then we can feel good that we know that we’re doing the right thing.”