The Journal. - Influencer Arielle Charnas’s Fashion Fail

Episode Date: February 23, 2024

Arielle Charnas is a fashion blogger turned influencer with over 1 million Instagram followers. In 2020, she launched her clothing brand Something Navy with about $10 million from investors. She hoped to turn it into a $100 million venture. That’s not what happened. WSJ’s Chavie Lieber and Sara O’Brien report on a cautionary tale for influencer brands.  Further Reading: - Investors Poured Millions Into Her Fashion Brand. Then It All Fell Apart.  - Her Brand Had $100 Million Ambitions. Now It’s Being Sold in a Fire Sale.  Further Listening: - Shein Took Over Fast Fashion. Then Came the Backlash.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Our colleagues Javi Lieber and Sarah O'Brien have a pretty fun beat. They cover fashion, pop culture, and influencers. And there's one influencer who Javi says they've had their eye on for a long time. My name is Arielle Charnas and I am the founder. Arielle Charnas is someone that I would say is one of the original and first fashion bloggers. All the pieces style back to each other. So you can mix and match the sweatshirts, the suits, the jeans, the tops and all of the above. What made her so successful?

The proliferation of social media came about, right, as people began to treat social media content and influencers as entertainment. So the way that you would sort of curl up at night and watch your favorite show, people began to do that with Instagram and keeping in touch with these personalities. And I actually, I sort of think about it the way when we were younger, we used to call our best friend at night and catch up on them and hear how their weekend was and what they wore that day and what they're having for dinner. These near daily posts by Charnas helped her get to over 1 million followers on Instagram. And a few years ago, she decided to use her influence to start her own fashion brand. She called it Something Navy.

But last year, Javi and Sarah noticed something strange. There was a sign one day on their website that said, Be right back. And then weeks and weeks and months go by and there's no answers. And so something like that made Javi and I want to understand what's really going on here. Is this brand coming back? What's the status? Welcome to The Journal, our show about money, business, and power. I'm Kate Leinbach. It's Friday, February 23rd. Friday, February 23rd.

Coming up on the show, the story of an influencer's fashion fail. On August 9th, don't miss the Borderlands movie starring this summer's biggest cast. Everybody buckle up. With Cate Blanchett, Kevin Hart, Jack Black, Ariana Greenblatt, and Jamie Lee Curtis. Wow, you never see that. Borderlands. Javi remembers way back in 2009 when Ariel Charnas was just beginning.

She started a blog posting daily outfits of her life. She was a retail associate working for a theory store in the meatpacking district, and she was posting photos of her outfits. Sarah says Charnas' appeal went beyond just the clothes she wore. It's like this lifestyle, right, of living in New York City a certain age. She was like 22 when she started the blog. And living kind of a life like anyone else, like Javi or I, but a bit more aspirational maybe, like, you know, just like a notch above. So you sort of feel like it's attainable,

but like it's still a little bit out of reach. Charnas was quick to see the power of social media. She started her personal Instagram account in 2011, just a year after the app came out. She switched the following to Instagram and built this big audience posting her boot recommendations, which denim brands that she liked. And she built this pretty big following.

And then I think she also took people into her life, right? So in 2014, she married her husband. And then as she gave birth to her first kid and her second and her third, like people were part of that life. Who would be nice to know? Alex, we're going to Vassar. gave birth to her first kid and her second and her third like people were part of that life it's sort of like bringing them into your closed door your beautiful home and sort of like talking to them like you would a friend and she was really successful at that and i think part of it was like the early mover advantage she just struck the tone, and people felt like they wanted to have what she was talking about.

A little voyeuristic. Totally voyeuristic. Charnas also shared her life on YouTube. We just left the Veronica Beard presentation. Now we're headed to the Yulan Club for dinner. We finally made it to Yulan and it's packed. It took us like an hour away. Her success at building an almost cult following drew the attention of beauty and fashion brands, which signed her up to promote their products. Right now, I'm obsessed with Laura Mercier's tinted moisturizer. I also use the Tom Ford Glow Drops and the Grande Lash Eyelash Growth Serum.

I remember pretty early on getting pitches for New York Fashion Week, and her name was there. So brands were promoting her pretty early on. People really, really were devoted to her style, and they trusted her recommendations. And the following really was there. So when the department store Nordstrom came to her for a collaboration in 2017, it seemed like a no-brainer. This Nordstrom's collection featured things like basic t-shirts, silky dresses, and strappy mule shoes. It was a

pivotal moment for Charnas. The moment I realized that I could make a career out of this was when I launched my capsule collection with Nordstrom, and we sold out the next day. That was a moment where I was like, okay, this might be bigger than I ever thought it could be. A year later, Nordstrom decided to do a private label, called Something Navy with her in 2018, and the same reaction. Like, you know, it just, it did gangbusters in terms of sales, and people felt like they really were able to buy a piece of her lifestyle. Around that time, an entrepreneur named Matt Scanlon reached out to

Charnas. Scanlon wanted her to promote his cashmere fashion startup called Nadam. She agreed, and the results were so impressive that he wanted to do more. Scanlon spent months showing up at Charnas' office, preparing to pitch her on an idea. To start a new company with him for her own brand. So he really believed in being able to turn the power of her followers along with her name, her brand name, Something Navy, putting clothing onto it. And he would take care of the logistics and the operations and turn it into a successful influencer line. And this is what they promoted, and this is what they believed was going to be a sustainable business. Eventually, she agreed. The brand would be called Something Navy, and it would focus on elevated basics.

And the vision was like affordable luxury? It was never going to be luxury. It was priced, honestly, probably a little bit higher than it should have been. But the way that Ariel had mentioned her vision was that this was for somebody who wanted to be on trend without spending luxury prices. So somebody who was able to buy into what was trendy and fashionable that season without having to break the bank. Next up is my go-to everyday outfit.

I love how versatile our pieces are. So this is my date night look. I kept it pretty simple because it is a statement piece. I'm wearing gold necklace, studs, and my favorite clutch. Matt told us that his goal was to compete with a brand like Reformation, which sells, you know, $130 skirts, you know, not fast fashion prices, but not luxury fashion prices. And how did it go? They were able to raise $10 million before they had launched to sort of like fund the launch of this brand. And we spoke to some investors and

they said, you know, that they believed that Ariel had like the secret sauce when it comes to influencing and that Matt Scanlon had the operational experience and expertise so that, you know, sort of a match made in heaven, if you will, that this was going to be a really successful brand. And so that's why they put money behind it. Now, they announced that fundraise, I think it was the fall of 2019, and the partnership. And then, of course, we get to 2020, and the brand is supposed to launch in that spring.

And as we know, a global pandemic hit. Of course, we get to 2020 and the brand is supposed to launch in that spring. And as we know, a global pandemic hit. Coming up, a rocky start for Charnas' new company. Picture this. See you next time. Suddenly you're on a fresh adventure, becoming the hero of your own night. Unapologetically full-flavored cocktails with a 13% punch. Seagram 13. Dare to make your own luck. Must be legal drinking age. Please enjoy responsibly. Available at the LCBO. Whether you're practicing your morning breath work, waiting for your favorite artist to come on stage,

or running errands at the perfect pace. Liquid IV powder helps you turn ordinary water into extraordinary hydration so you can live a more extraordinary life. Live more with Liquid IV Hydration Multiplier. Available in refreshing lemon-lime, passion fruit, and strawberry flavors. Buy a stick in store at Costco, Walmart, Amazon, and other Canadian retailers. Arielle Charnas was set to launch her new fashion brand, Something Navy, in spring of 2020. But the pandemic delayed that.

So then in July, they launched something Navy, but consumer habits have changed because of COVID. So people are not sort of going out dressing, you know, wearing dresses, they're sort of at home in their loungewear. But still, I mean, the brand did super well, like their launch did incredibly well. It's crazy to feel like I'm working with a bunch of girlfriends every single day. And my favorite thing about them is I really do believe that they live and breathe something Navy. I think they had like 20 employees at one point. They opened stores. They had a celebrity dinner. There was a team retreat.

So, you know, they were pouring all of this money into this fashion brand. In the first six months, the brand made $12 million in sales. Matt Scanlon and R.L. Charnas both have really, really big ideas for their brand. And when you are a digital startup, it means that you have to burn cash in the pursuit of growth, right? So you're trying to grow really, really quickly in a short amount of time. And in this world, it's you're chasing growth at the expense of profitability. But this is where things kind of take a turn. Yeah, we're hearing from shoppers that the quality was just off, the fit was off. Like there were sort of fundamental problems, it seemed, with the items that they were offering to people.

People just didn't quite like them. But there was another problem, a much bigger one. Ariel Charnas, who's posting about a lot of other brands, is posting less and less about her own brand, Something Navy. She's posting herself wearing a lot of other brands' clothing, but not her own. And so people are seeing sort of a disconnect between her and her brand. And they care about her, and the brand was sort of, you know,

supposed to be an extension of her, but there's a disconnect now. Charnas hasn't responded to our requests for comment. So at a certain point, the brand began running out of money. And if you want to go back to thinking about 2022 and then going into 2023, you had reporters poking around and it was clear that there was something not going okay at this company. This was around the time that Something Navy's website posted that ominous Be Right Back sign. The company wasn't selling clothes anymore, but it also didn't say it was shutting down.

And what is happening now? This is a company that is still shrouded in secrecy. Back in December, Sarah and I got in contact with two investors who were a part of a group of buyers that were going to buy something Navy. They told us that they were going to take on about $8 million worth of assets and liabilities. And they were going to buy the company and it would have a new manufacturing partner. And Ariel would be brought on as a creative consultant. And that deal was supposed to sign at the end of December. It is now February, and no deal has been signed,

and the party will not tell us what happened to the deal and if it was signed. And again, Ariel has not talked about the brand in detail or explained what happened, which is really interesting, wild for me, not even as a reporter, but as a follower. I'm there every day with her. I get onto my couch at night and I watch her try on her jeans and take her kids to birthday parties and go to restaurants and vacation.

I'm with her all the way. So it's interesting to me that someone who is so public about all these different things won't tell her followers what's going on with this brand. But she's still posting every day and being an influencer. The influencer is still influencing. In a recent Instagram story, Charnas showed off a couple outfits. This skirt is one that I found at the Kate sample sale and I didn't try on and I got a size too small. I'm barely breathing in it, but it looks really cute. And this one is low rise pants, which I think, I mean, for me personally, has been a very intimidating trend. What are the big lessons here? What are the big lessons here? We're constantly told, or at least we believe, that if you have a certain number of followers online, that that means a certain level of influence over customers. So one million followers on Instagram means a certain number of people are watching your stories, engaging with your content, and then might actually buy something that you promote and then take it further down the line, buy a product that you put your name on. And I think that the story that we uncovered with Something Navy is that the calculus and the math for that

is actually not as clear cut as you would think. That actually a million followers or 1.3 million followers does not actually translate to success when it comes to launching a fashion brand. Since our interview with Javi and Sarah, the Something Navy website no longer has up that Be Right Back sign. It has disappeared entirely. That's all for today, Friday, February 23rd. The Journal is a co-production of Spotify and The Wall Street Journal. Maria Byrne, Victoria Dominguez, Pia Godkari, Rachel Humphries, Ryan Knutson, Matt Kwong, Jessica Mendoza, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt,

Alan Rodriguez-Espinosa, Heather Rogers, Jonathan Sanders, Pierce Singey, Jivika Verma, Lisa Wang, Catherine Whalen, Tatiana Zamis, and me, Kate Leinbaugh. Thanks for listening. See you Monday.