Roth Martin on Sustainability, Imitators, and Taking Rothy’s Deeper Into Retail

Roth Martin on Sustainability, Imitators, and Taking Rothy’s Deeper Into Retail

The man behind the buzziest start-up in fashion and sustainability is something of a paradox. He’s a former commodities trader, but also owns an art gallery. He debuted his new company in 2012, but didn’t put out a product until 2015. He descends from two of America’s most prominent business families, but as a boy even that did not spare him from the night shift at Safeway.

He is Roth Martin, who founded, alongside his friend Stephen Hawthornthwaite, Rothy’s—the Instagram-famous, Gwyneth Paltrow-minted brand of women’s footwear made from recycled plastic bottles. If you’ve been living under a rock, you might’ve missed that Rothy’s—in just its third year to market—earned $140 million in revenue in 2018, and is on pace to “significantly exceed” that by the end of 2019, according to a company spokesperson.

In June, Hawthornthwaite transitioned into an advisory role, and Martin now leads Rothy’s in these critical days as it pushes toward another stratosphere of brand relevance. From his San Francisco office on Montgomery St., Martin discusses sustainability in manufacturing, his three-year obsession before debuting the company’s first product, a new role as interim CEO, what to do about imitators, and exercising caution as Rothy’s embarks upon further retail expansion. "We could've opened a lot of stores in the past year," he says. "I think it's about doing it properly and [having] the discipline to get it right." 

(This interview has been edited and condensed for clarity.)

It's been a few months now since Stephen stepped aside from the day-to-day of Rothy’s. What becomes fundamentally different about such a young company when one of its co-founders changes roles like that?

Martin: Honestly, I don't think anything. I think the values were set from the beginning with us together, and so the DNA of this company was born from a place that we both imagined together. To this day, I think those values are still in place.

I'm just lucky to still have him amongst my counsel, and for us to have been in such lockstep from the beginning and so aligned in our values and thought processes that we always arrived at the same place. It's one of the things that's so hard to get right in business. I've been in other businesses. It's hard to have co-founders.

The oversimplification of your and Stephen's relationship is: You have Stephen (pictured above, left), the former investment banker, on the business side, and you have you, the art gallery owner, on the creative side. How much truth is there to that kind of breakdown?

Martin: I think very true. [But] I think I was always a center-brained thinker. It wasn’t all arts and crafts [for me]. I traded commodities, and I worked in a biotech company, as well, running operations. I've seen both sides of it, but I think it's always important in a pair of co-founders to have enough distance between skill sets that you can both add value in your areas of expertise. 

I think in Stephen's and my case, it just was the perfect synthesis of skill sets, where Stephen's got great aesthetic taste, as well. He was able to lean in on the finance side a bit more than I could, and I was able to lean in on the product side a bit more than he could.

Your role now is interim CEO. What’s changed in your day-to-day?

Martin: I'm learning some new stuff, which is cool.

Like what?

Martin: I'm getting more into [our] finances and things like that. I come from the product side, and so that was my focus—building all the manufacturing. Now we've got experts in the right places, which allows me to put a lot of trust in them, but also to let me learn through their teams and their processes in an effort to better everything we're doing.

This company was built fundamentally different than most companies, in that we built it from the ground up with a DNA that encompassed sustainability. It's not just a material story, what we're doing at Rothy's. It's the whole ecosystem. So, yes, it includes sustainability from a material standpoint, but really the whole company, in terms of our whole brand approach, starts on the supply chain with us owning our entire factory and every product we make.

You founded Rothy’s in 2012, but famously didn't actually launch a product until late in 2015. I imagine there are many candidates here, but what was the hardest part of those three years before launch?

Martin: I couldn't make the product right. I just simply couldn't make the shoe I wanted to make. I wasn't willing to put a seam on it, and we wanted to knit it three-dimensionally, and getting that right is just a very exacting process. And so it was really a product process. A lot of invention and information technology had to be created to be able to bring the product we wanted to bring to market.

And we failed. I failed multiple times. I set up a factory in Maine. We spent more than a year there trying. We created the shoe we wanted to make in Maine, and wanted to commercialize there, but couldn't get the consistency right on the product. We couldn't get the toolmakers, couldn't get the supply chain right. We could make 20 or 30 pairs, but we couldn't make them consistently.

So I had to pivot to China. The engineer set and the skill set in the footwear community there was just unprecedented to what it is in the U.S. I flew over in 2015 with my yarns and knit programs and all our prototypes, and started reverse engineering everything we had worked on in the States. I largely communicated through WeChat, because I don't speak any Chinese (author’s note: in fact, Martin studied Japanese in college.) I basically committed myself to being in China until I could bring a product to market that I was proud of. 

I'm glad you brought up your time in Maine. What did you find to be the difficulties to manufacturing at scale within the U.S.?

Martin: Typically, it's supply chain know-how. The footwear manufacturing skill set largely moved offshore in the 1980s, and in footwear [that’s] something I think is wildly underappreciated. The complexity of creating shoes is something, even in the traditional way, that is very difficult. 

Fit is a huge factor, and just the amount of tooling and materials that are combined together to make a traditional shoe is difficult—let alone doing it in a way that is truly differentiated. All the mold engineering, the materials, everything that goes into it is complicated. There's nothing easy about footwear. Someone told me early on, “Jeez, you could've built a cell phone in a quarter of the time.” That always stuck with me. God, shoes are so hard. 

There's certainly a perception, whether you believe it has merit or not, that things made in China are cheap. What do people get wrong about manufacturing in China?

Martin: Those days are over. I think you've got an unbelievably well-educated workforce. I was able to create the product I wanted to make in China. I was able to find and surround myself with engineers and the know-how in order to bring my product to market. I think the reality is, no matter where you go in the world, the supply chain is dominated by China. So, labor costs aside, even shoes coming out of Vietnam or India, largely the supply chain is still derived from China.

Rothy’s still hasn't been in the market that long, only about three years. What are the distinct gifts and challenges to that kind of rapid growth?

Martin: The gift is that the product just has this overwhelming affinity with our customers. They’re evangelical about the product. Word of mouth is the largest source of new customers. People wear the shoes constantly. They want to talk about them. They stop you. They want to have a conversation. The product—that's the biggest win here.

The challenge is building a business that grows like ours has. If you think about the manufacturing component, most companies that are experiencing hyper-growth are simply pushing purchase orders out to original equipment manufacturers. In our case, we had hyper-growth while simultaneously building our manufacturing facility, which is really unheard of. It's kind of like flying the plane while you're building it, right?

I always equate our business in my mind to a bank of dimmer switches. You need everything to come up in concert together, and inevitably one is always riding behind. In our case, we just had a lot more of those dimmer switches that had to come up, if you think about including all the manufacturing know-how, and building that out to scale to keep up with the growth.

One of [our] key advantages has simply been the fact that we're fully integrated. While it's challenging, I just don't think we would be where we are today without it. And I do believe, wholly, that it's the future of retail, that manufacturers and brands need to be integrated. It's the only way to get that entire cycle and have the input of the customer go directly into your manufacturing in a very short amount of time.

Something that has fueled your company’s growth, at least in the eyes of the consumer, is you've been fortunate that a lot of prominent people have taken a liking to your products—whether it's in the beginning, when you get picked for the Goop market in San Francisco (Martin, above center, is pictured with Goop founder Paltrow), or Meghan Markle is spotted wearing your shoes in Australia. Aside from an immediate sales boost, what actually happens to a business when you get those kinds of endorsements, so to speak?

Martin: I think it's hard to quantify. In the case of someone like the Duchess (pictured below), you obviously see an immediate lift. I think the product has broad appeal, and we've been fortunate to have an incredible roster of people wearing the product. Ultimately, none of that matters if you don't have a great product. At the core of what we've got is a great product, but it's the real women—not that superstars aren't real, but we're not leveraging those people to build our business. The product sells itself, and our customers are just super enthusiastic about what we're doing, with or without their endorsements.

That leads to my natural follow-up: Is this all organic press? Or are these promotional arrangements with you organized through Rothy’s?

Martin: We have a celebrity PR initiative, but it's all been natural. Only recently have we started to work with a showroom in L.A. that allows stylists to come in and try the product. But no, it's just been totally natural, as has everybody's adoption. The [growth] of our products has pretty much been [by] natural word of mouth.

In the majority of cases, our customers hear about it from a friend, or [they’ve] stopped someone on the street to say, "Hey, are those Rothy's?" I heard an incredible story last week of a woman in a bathroom stall, and someone knocking on the partition to ask how she liked her Rothy's. I was like, "Oh my God, I've never heard this one before."

Let’s pivot to a few sustainability things. What is the hardest thing about aiming for zero waste as a company? Where does running a business just inherently not lend itself to avoiding waste?

Martin: In our case, we're pretty darn close because of the manufacturing side of it. So we're not sitting on weeks or months of materials because of long lead times. We have this nimbleness that runs through our ecosystem that allows us to pretty much make [product] to demand. If we get it wrong, we sit on a couple more weeks’ [worth] of a finished product than we might have anticipated, but that's pretty rare that that happens. 

We have a little bit of waste in our manufacturing process, [but] we're virtually wasteless. Basically, much like when you send a file to the printer and you use just the amount of toner it needs to carry out that job, ours is a very similar situation. We write computer code [for] our knitting machine, and the machine knits with those yarns. And then [when] a program's finished, the part is finished. It uses just the amount of yarn it needs to create that part.

There's no cutting. There are some little bit of yarns that have to start it to feed it in that get discarded, but it's a very small percentage of waste we have. And because we operate our entire factory, we can do everything from the top down. Everything in our facility is recycled. Whether it's an adhesive bucket, whether it's the trash from lunch—we can dictate those trends, and know that garbage isn't going out the back door [and] being incinerated. We are repurposing [in] everything we do.

What is it about footwear that is especially wasteful within the fashion industry?

Martin: Apparel gets a lot more press than footwear does, but footwear is as wasteful, or more so. First of all, dye cutting from an animal hide—[you have] to position around defects in the leather, whether it's scars on an animal or whatever it may be. Inevitably, you have 30–40% wastage in the leather on a leather hide. In our case, we never have anything to shape, so we have no cutting waste.

Long lead times [are another]—not knowing what to buy or how much to buy of something. When you commercialize something just for one season, you [often] get it wrong, and when you're in something only for one season, you’ve got to over-order from a materials standpoint in order to make sure you get the right amount of product to market. That's an incredibly inefficient process. 

And then, if you think about a merchant saying, "Hey, I think turquoise is going to be great in spring 2021." Well, inevitably [you] get it wrong. So they made a bet that they buy X, they can sell Y, and committed materials to it—labor, shipping. It goes into a warehouse where it sits or ends up on sale.

For us, we can take a product, put it in the marketplace on a Monday, get a read on it, see how it's selling, make a [decision] and immediately be manufacturing it that evening. Being fully integrated and going from factory to our customer in the shortest amount of time possible, which I think is under 10 days now for our fastest speed, is just unheard of in the industry.

Rothy’s has one store, in San Francisco (pictured above), where you’ve been able to come offline and into the world. What are your observations of what the store has done for the brand?

Martin: The intention behind it has been reality. To be able to directly connect with our customers. To be able to meet them in real life. When you run an ecommerce business, that's really hard to do. Being able to have direct feedback from the customer, and be able to have your customer experience the physical product pre-purchase and [have a] dialogue with us is incredibly important. I think we've been able to [use] a lot of feedback in person that may not translate as well through digital channels, and bring that into the product.

There are five more stores coming this year (author’s note: Rothy’s will open stores in New York City, Washington D.C., Boston, and two in Los Angeles.) In your head, what might the ideal retail footprint look like for Rothy's?

Martin: I think much like you see us building it. We could've opened a lot of stores in the past year. I think it's about doing it properly and [having] the discipline to get it right. 

We opened our first store in May of 2018, and I think that we've learned from it. We really want to get it right before going out and just throwing stores all over the place. That's certainly not our intention. We'll build out these next five and go from there. [We’re] building this business for the long haul. This isn't a business that's meant to be built overnight and just to drive growth. We're trying to create meaningful relationships with the customer and build a brand that's got really long-lasting appeal. Building the stores and operating them properly is something we need to prove to ourselves that we can do.

What are the considerations that go into striving towards zero waste as a company, but then opening retail stores? How does that change the calculus?

Martin: It's still just as connected. There's no delay in going to a store. It's not like [products are] going to a wholesale partner and then all of a sudden you’ve got two gears turning at two different speeds. Our stores are built intentionally small. We turn our stock incredibly quickly, and they're a very efficient part of the business. I think of retail as part of being able to exist and be able to meet the customer in person. It's so important. And there is zero waste in that—being able to walk into one of our stores and immediately meet the customer.

Rothy’s has plenty of imitators. How far does the first-mover advantage take Rothy’s—and at whatever point that wears off, what do you do next to stay ahead of companies trying to do similar things?

Martin: We've truly created a category. I think it's flattering that other people are coming into this, but it doesn't change anything for us. It's not like we're patting ourselves on the back. I think we've always been about product innovation and we'll continue to innovate, and we've got so many exciting things in the pipeline that we'll just keep leading by example. And I hope others will take a page out of our books and integrate manufacturing and take sustainability to the next level—to responsibly steward sustainability into the next generation.

I read somewhere that you had suggested imitators were somewhat flattering and also somewhat annoying. Which one is closer to the truth?

Martin: I think flattering more than anything. We've got a very active and robust product pipeline. We can't be sitting there worrying about yesterday's news. My point is: We're product people. I'm a product person. I like making new products, and we love that our product has been successful and we'll do our best to continue to make successful products in this very responsible way. There are always people that are going to [take] shortcuts to get product to market, because they don't [have] that discipline to take that shot to create something new. I think we're innovators, and that's at the heart of this company. People will do what they do.

How many patents does Rothy’s hold?

Martin: We have 85 design patents and applications granted or pending, with more on file behind that.

How difficult is it to truly protect these things in real-time?

Martin: We're learning. I think we're learning how to protect what we've got. I think the answer is: We'll be very proactive about that. We've invested a lot of time and money in creating what we've created, and we'll certainly try to protect what we've got. But patents are for what you introduce yesterday. Innovation is about what you're making tomorrow. As long as we're moving forward, we'll let the patents do what the patents can do. But we're a [research and development] company, and we'll continue to innovate.

Let me close with something personal. I think it’s fair to say you come from good stock. Your family was able to achieve some incredible things in business (author’s note: Martin’s father’s side are the de Youngs, founders of the San Francisco Chronicle; Martin’s mother’s side are the Matsons, founders of Matson Navigation, a public shipping company with a market cap near $1.7 billion.) What did your unique upbringing teach you about life—and also about business?

Martin: There's no sugarcoating it. I had a very fortunate upbringing. But that doesn't change what hard work looks like, and I learned from an early age, whether I was working the night shift at a Safeway bagging groceries or whatever it was, that there was no free lunch.

We all know how hard it is today to raise kids (pictured above, alongside wife Emily, are Martin’s four children—from left Harry, Fritz, Pia, and Lolly.) To me, to try to raise my kids in a way that they can go to the schools they want to go to, or take risks on jobs they want to take risks on, is hard for me to create that for them. Because life is harder than it was when my parents were raising me, and my grandparents were raising my parents. Back to the root of it all is: Hard work is hard work. That’s how I view the world.

Was there a pressure to succeed that you felt growing up?

Martin: Sure. Success has surrounded my family for a long period of time. Not always—there's been a lot of failure, too. [But] I always wanted to create something that was on my own and not mail it in in life. I’m certainly glad I got the opportunity to do so.

About the author

Jason Buckland

Jason Buckland is a content marketing manager at Shopify Plus. His feature writing has appeared in the New York Times, Sports Illustrated, ESPN, Playboy, Time, the Toronto Star, and elsewhere.