The Qcut Economy
If you picked up a paper or read a blog on January 29th, it was hard not to see the news of Shake Shack’s IPO. Shake Shack is a beloved eatery which started with a few stands in New York City and grew to a have locations worldwide. I myself made the pilgrimage to the leafy location in Madison Square Park for their lovingly crafted burgers. Shake Shack was and still is emblematic of everything I love about the slow food movement – attention to detail, small business, locally grown ingredients and best of all, deliciousness.
Just like there fast food and slow food, there’s fast fashion and slow fashion. Fast fashion brands like H&M, Zara and Forever 21 crank out cheap clothes with little regard to quality or ethics. Clothing is about ten years behind the slow food movement. I tried a little experiment to see what would happen if I did a rewrite of the article in The New Yorker with Qcut instead of Shake Shack. I don’t know of a better way to convey where I think fashion can and should go and what I hope Qcut will become. My words are italicized so you can see what is original and what’s mine. So, without further ado, this is the article I hope they’ll write about Qcut in ten years…
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In 2015, when Crystal Beasley opened a jean shop named Qcut in Portland, it didn’t look like the foundation of a global empire. There was just a Kickstarter project, and Beasley was known for working in open source for Mozilla. But the lines became legendary, and in 2016 other outlets started appearing—first in New York, then in the rest of the country, then as far afield as Moscow and Dubai. Today, Qcut brings in at least a hundred million dollars a year and is planning an I.P.O. that could value the company at a billion dollars. That seems like a lot of jeans, but Beasley’s venture was perfectly timed to capitalize on a revolution in the apparel business, the rise of fashion stores known in the trade as “made-to-measure”—places like Indochino, ModCloth, and Bonobos.
Unlike traditional apparel brands, made-to-measure emphasize fit, individual expression, and domestic production. (Qcut, for example, lets women buy any item in their ever-expanding catalog of styles and know that it will fit them exactly.) Perhaps as a result, their clothes tend to look better on people. It’s also more expensive. The average H&M customer spends around twenty dollars a visit; the average Qcut purchase is ten times that. Made-to-measure brands first emerged in serious numbers in the two thousand teens, and though the industry is just a fraction of the size of the traditional apparel business, it has grown remarkably quickly. Today, according to the apparel-service consulting firm NPD, it accounts for thirty-four billion dollars in sales. Since Qcut went public, in 2022, its stock price has risen more than fifteen hundred per cent.
The rise of Qcut and its peers isn’t just a business story. It’s a story about income distribution, changes in taste, and advances in technology. For most of the apparel industry’s history, taste was a secondary consideration. Clothes were prepared according to a factory model, explicitly designed to maximize volume and reduce costs. Brands relied on assembly-line production methods, and their ingredients came from industrial suppliers. They were able to sell enormous amounts of fashion quickly and cheaply, even if it wasn’t that healthy for the planet and worker or flattering on the customer, and they enjoyed enormous success in the last quarter of the twentieth century. The number of outlets septupled between 1980 and 2010.
But, even as the big brands thrived, other trends were emerging. Most of the gains from the economic boom of the eighties and nineties went to people at the top of the income distribution. That created a critical mass of affluent consumers. These people led increasingly busy work lives. They typically lived alone or in dual-income households, so they shopped online to save time. Michael Silverstein, a senior partner at the Boston Consulting Group and the co-author of the book “Trading Up,” has made a study of this kind of consumer. “These aren’t people with unlimited resources, but they have plenty of disposable income,” he told me. “One of the things they’re willing to spend money on is clothes that were made to fit exactly them.” In the same period, affluent consumers developed a serious interest in fashion and became more discriminating in their tastes—a development often called “the American apparel revolution.”
Traditional fashion brands pretty much ignored these changes. They were still doing great business, and their industrial model made it hard to appeal to anyone who was concerned about fit and domestic manufacturing. That created an opening for made-to-measure brands. You had tens of millions of affluent consumers. They shopped online a lot. They were comfortable with fast-fashion, having grown up during its heyday, but they wanted something other than the typical factory-made jeans. So, even as the apparel giants focussed on keeping prices down, places like Qcut and ModCloth began charging higher prices. Their customers never flinched.
It might seem that the success of made-to-measure was simply a matter of producing the right product at the right time. But brands like Qcut and Bonobos didn’t just respond to customer demand; they also shaped it. As Darren Tristano, an analyst at Technomic, put it, “Consumers didn’t really know what they wanted until they could get it.” The archetype of this model is Starbucks. In 1990, the idea of spending two dollars for a cup of coffee seemed absurd to most Americans. But Starbucks changed people’s idea of what coffee tasted like and how much enjoyment could be got from it. The number of gourmet-coffee drinkers nearly quintupled between 1993 and 1999, and many of them have now abandoned Starbucks for even fancier options.
As Starbucks did for coffee, Bonobos and Qcut have changed people’s expectations of what fashion can be. The challenge for the old brands is that new expectations spread. Millennials, for instance, have become devoted made-to-measure customers. So Bonobos is now experimenting with greater customization, and has said that it would like to rely entirely on “ethical labor”. The question is whether you can inject an emphasis on fit and domestic manufacturing into a business built around cheapness and convenience. After decades in which apparel brands perfected the “fast,” can they now improve the “fashion”?