How Nili Lotan Built a $100 Million Brand

Nili Lotan does not have time for TikTok trends.

Sitting in her office loft above her brand’s atelier in New York one recent spring morning, the 64-year-old designer heaved a sigh when asked if she was curious about “cottagecore” — the floral countryside aesthetic that’s helped propel brands like LoveShackFancy and Hill House Home.

“I’ve been 42 years designing, I’ve seen it all a million times in my career, and I just won’t go there because I’m not interested,” said Lotan dryly, adjusting her black button-down shirt tucked into her jeans. A framed photo of Patti Smith wearing a “fuck the clock” shirt hung on a white-washed brick wall and a soft hum of workers sewing downstairs bounced off the clay pottery and Noguchi books nearby.

“To me, this is a business about serving a woman’s life, not a fantasy,” she went on. “And the woman that I’m designing for, she couldn’t care less about these trends.”

Lotan’s distaste for chasing the styles du jour is also a crucial element to her success in the American contemporary market.

For the last 19 years, the Israel-born designer has developed her independent American fashion label by producing high-quality, timeless basics. Its $400 high-rise jeans, $350 linen khakis, $295 boyfriend button-downs and $950 unstructured blazers have taken off with shoppers in New York, Los Angeles, London and Tel Aviv. Her customers appreciate neutral palettes and relaxed silhouettes and are willing to pay top dollar for the brand’s fit and feel (a look TikTok influencers might describe as “coastal grandma,” likely to Lotan’s dismay). The brand will pull in $100 million in revenue this year.

Although fashion brands like Vince or Rag & Bone that launched around the same time as Lotan chose to grow with investments and IPOs, Lotan has taken a slow and steady approach, remaining small and independent, with no investors. It sells to about 300 stores worldwide — wholesale accounts for 42 percent of the business — and mostly manufactures locally in New York.

Lotan has been content with the company’s size but is now preparing to scale. Next month, the brand will launch menswear: bomber jackets, carpenter pants, corduroy blazers and fisherman sweaters for the “husbands and boyfriends of my clients,” Lotan said. The menswear will initially be sold to seven wholesalers, including Net-a-Porter, Ssense, Saks Fifth Avenue and Shopbop, as well as on the company’s e-commerce site and inside its stores (it has three locations in New York and just opened a fourth in Palm Beach, Florida).

The brand is also opening three stores in LA this year, followed by the launch of handbags in the fall. With these category launches, Lotan predicts her business could double.

Lotan knows it’s a necessary time to expand, especially when the brand faces more competition — notably, from lower-priced West Coast label Jenni Kayne.

It’s also a good moment to be staking a bigger claim in the American accessible luxury market. With inflation at a 40-year-high and economic headwinds curtailing spending amongst the middle class, the category is growing.

“With the prices of groceries and oil increasing, the lower-end consumer is being hit, but the luxury consumer is not being affected,” said Jessica Ramirez, retail research analyst at investment research firm Jane Hali & Associates. “And if we see a recession, luxury will see a trade down and accessible brands will benefit.”

Cracking the Contemporary Market

Born in Israel, to a real estate father who helped develop the Israeli beach town Netanya, Lotan grew up on French magazines she’d find inside Israeli hair salons, and later developed an affinity for French minimalism and 70′s rock and roll after trips to Paris. She attended Shenkar College of Engineering and Design, Tel Aviv’s popular fashion institute, and then moved to the US, where she spent nearly two decades working at labels like Ralph Lauren, Nautica and Liz Claiborne.

In 2003, she launched her first collection, investing $25,000 of her own money. The clothes — military pants and utilitarian jackets, inspired by the uniform of the Israeli air force, where she served for two years — took off at retailers like Barneys New York and Fred Segal.

“The more mass, contemporary brands had no real value for a Barneys consumer because they could see it everywhere and it was heavily discounted. Rag & Bone, Vince, Helmut Lang, Theory became … less and less important, but Nili filled the void with price point, quality and fit,” said Daniella Vitale, former chief executive of Barneys New York and current CEO of Salvatore Ferragamo North America. “We put her on the floor with The Row, with Saint Laurent and it just took off.”

Lotan’s hero product has always been her original military pants, but her line has evolved to “easy, city-like wardrobe dressing that is luxurious and approachable,” said Alison Loehnis, president of the luxury and fashion division at Yoox Net-a-Porter.

“Consumers think her [clothes] are beautiful investment pieces that will last,” said Loehnis.

While younger celebrities like Gigi Hadid and Kendall Jenner are often photographed wearing the clothes, a large percentage of the brand’s shoppers are in their 30s and 40s. The consistency of her staples has also attracted older customers too.

“It fits the bill for cool, comfortable clothes that have an edge, but not in a way where you feel like you are trying to dress like your daughter,” said Zeldie Stuart, a 69-year-old Lotan shopper from DelRay Beach, FL. Stuart added that she’s happy to support Lotan, as she’s one of the few Israeli designers to hit it big in fashion (Lotan’s husband, the musician David Broza, has been called the “Bruce Springsteen of Israel” and is a vocal peace activist).

Loehnis added that the Nili Lotan label is successful because the designer herself is a woman in her sixties. The brand’s social media posts often feature Lotan styling her clothes and walking out and about in New York City — a persona that’s quite different from contemporary labels banking on younger shoppers.

Since the pandemic, the label has also picked up with younger shoppers transitioning into capsule wardrobes, said Courtney Grant, vice president of buying and merchandising at retailer Elyse Walker.

“My customer is still emotionally shopping for colour, but there’s also a huge movement of people … wanting less and buying the right pieces for a signature style, and Nili has been designing those effortless staples,” said Grant.

Lotan has also been resistant to discounting — something that’s been essential to the company’s health but also helps preserve a brand’s image.

“What we’re seeing in the US with our customer, in general, but for Nili, is no price resistance,” said Loehnis. “There’s a real appetite to invest in special pieces [that] aren’t cheap. They want to build on them, season after season.”

Tackling Menswear and Beyond

As she looks to menswear to scale, Lotan said she’s sticking to the brand’s familiar relaxed fits and neutral colours. Loehnis predicts more shoppers will trade down from suits.

“There’s this moment of great excitement in men’s,” Loehnis said. “As things have become more casual, post-pandemic, in the workplace, there’s [appetite] for unstructured tailoring and versatility.”

Over the years, several parties interested in investing in or acquiring Nili Lotan have approached Vitale for introductions, Vitale said. But Lotan said she’s not interested in outside partners and wants full autonomy to move the brand at her will.

“I come from a different generation but … money is not what drives me,” she said. “If I wanted to go to the beach, have someone else invest money and do the work, it’s a different story. But I’m enjoying it, I love it and more money won’t make me happier.”