First Time Founders: This Former Trader Built A Luxury Clothing Brand
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
Michael Berkowitz was a commodities trader on Wall Street facing a common problem: his nice coats weren't warm, and his warm coats weren't nice. (02:59) This frustration led him to leave finance and start Norwegian Wool, a luxury outerwear brand that delivers both style and performance. Today, Norwegian Wool has become the go-to coat brand for business professionals, earning recognition as "the coat to wear to Davos" and building a cult following in the quiet luxury world. (02:37) The company now sells through high-end retailers like Saks and Bloomingdale's, and has even received a name drop in HBO's Succession.
- Main Theme: The episode explores how to break into the luxury market as an outsider by solving real problems and building authentic brand stories that resonate with specific customer segments.
Speakers
Michael Berkowitz
Michael Berkowitz is the founder and CEO of Norwegian Wool, a luxury coat brand that has become synonymous with business professionals and the Davos elite. He started his career as a commodities trader on Wall Street in his early twenties, where he was one of the youngest people at his firm. (02:52) After experiencing the frustration of not finding coats that were both stylish and functional for his professional needs, he left finance to create Norwegian Wool, which has since grown to sell in prestigious retailers like Saks and Bloomingdale's.
Ed Elson
Ed Elson is the host of First Time Founders, a podcast that explores the stories and strategies of successful entrepreneurs. He conducts in-depth interviews with founders about their journey from idea to execution, focusing on practical insights for ambitious professionals.
Key Takeaways
Never Compromise on Quality When Breaking Into Luxury
Berkowitz emphasized that even when starting on a budget, quality cannot be compromised, especially in the luxury space. (13:43) He explains that while you might have to overpay initially to work with the best manufacturers and source premium materials, this investment pays dividends when customers and retailers experience your product. The goal is to "wow" everyone who touches your product, from manufacturing partners to end customers. This approach opened doors that budget consciousness would have kept closed, as luxury retailers and customers return for repeat purchases when they experience exceptional quality.
Solve Real Problems to Create Authentic Marketing
The most powerful marketing comes from solving genuine problems that customers can immediately relate to. (14:54) At a trade show, Berkowitz demonstrated his coat by asking the audience how it looked, then revealing it was fully down-lined, waterproof, and made of cashmere. He received a standing ovation because everyone in the room understood the problem he was solving. When customers experience a product that genuinely solves their pain points, they become natural evangelists, discussing it at dinner parties and recommending it to friends.
Build Relationships Before You Need Them
Breaking into established industries like luxury fashion requires patience and relationship building. (08:29) Berkowitz describes having to go to dinners with factory owners, talking about their grandkids and hip replacement surgeries to build trust over time. The best manufacturers and suppliers are typically busy and don't want to work with unknowns. Success comes from proving you're "there for real" through consistent ordering, timely payments, and weathering challenges together. These relationships become your competitive moat once established.
Control Distribution to Maintain Brand Value
Scarcity and controlled distribution are essential for luxury brand positioning. (49:06) Norwegian Wool deliberately limits where their products are sold and maintains controlled quantities to avoid flooding the market. This strategy ensures high sell-through rates at full price rather than having to discount excess inventory. Berkowitz notes they've turned down many distribution options because maintaining brand integrity and full-price sales is more valuable than short-term volume gains.
Leverage Your Insider Knowledge
Berkowitz's success came partly from understanding his customer because he was his customer. (19:47) As a former Wall Street trader, he understood the specific needs of business professionals better than traditional fashion designers who designed "with their windows closed." This insider perspective allowed him to create products that truly served the target market and helped him identify cultural moments like partnering with financial influencers who resonated with his core audience.
Statistics & Facts
- Norwegian Wool coats take nine months to manufacture, with fabrics required to rest for a month so the waterproof membrane properly bonds with the fabric. (38:44)
- One billionaire customer has purchased 52 units from Norwegian Wool, using many as end-of-year gifts for important clients. (19:52)
- A single social media post from financial influencer Litquidity drove 120,000 people to Norwegian Wool's website within minutes. (22:44)
