Norwegian Wool's Quiet Luxury Strategy: Niche, Quality, and Scarcity

Key Quotes

"I was a commodities trader and I was actually one of the youngest guys in the firm so I was probably extra concerned about how I was perceived you know I they I had to well let's say I don't know pull some strings but I had to work extra hard to get into that position and you know I really always wanted to do a good job and if I were to be walking into a room and making a presentation for something I knew I was going to be scrutinized extra closely and the way I dressed was was a part of that I I've discussed this uh a bunch of times that you know a lot of who you are you're not in control of your height certain aspects of how you look but your clothing you are in control of and I always felt that I should dress in a way that would make people respect me and and take what I say seriously."

Michael Berkowitz explains that his professional background on Wall Street instilled in him a strong awareness of how appearance impacts perception. He felt a personal responsibility to dress in a way that commanded respect and ensured his ideas were taken seriously, highlighting the control individuals have over their clothing choices.

"So you're you're working on Wall Street how old are you at this point early 20s early to mid 20s already okay and then you decide okay this coat thing is more interesting or it's more fulfilling or why do you leave the world of Wall Street where I assume you're getting paid a lot of money and you're kind of rubbing elbows with the masses of the universe and then you said okay I'm going to go start a coat company right?"

Scott Galloway probes Michael Berkowitz about his transition from a lucrative Wall Street career to starting a coat company. Galloway highlights the perceived prestige and financial benefits of Berkowitz's former profession, setting the stage to understand the motivations behind such a significant career shift.

"So it doesn't all happen overnight um first that struggle looking and not finding something that kept on getting higher and higher and then actually uh a close friend of mine who we used to commute in a lot together his mother in law is a very well known fashion designer who actually subsequently has become a real mentor of mine and he would know about brands I never heard of you know his mom was selling to saks and to neiman's and a lot of the great places and he would tell me about things that I never heard of and um I asked him you know I'm looking for a coat that's that's nice that I'm proud to be wearing but also keep me warm and dry and he leaned in and he put his hand on me he goes dude when you find one get one for me too."

Michael Berkowitz details the genesis of his idea, emphasizing that it was not an immediate decision but a gradual process stemming from a personal need. He recounts how a friend's connection to a fashion designer revealed a gap in the market for high-quality, stylish, and warm outerwear, prompting further investigation into a potential business opportunity.

"So the cock started to turn maybe maybe you know I need to find something that was where it first started I just want to find something that looked nice um that I felt uh I wasn't a suit and tie guy but I wanted to look presentable not something that was big and puffy and with branding you could see from the moon I want to something that looked uh presentable and also would keep me warm and dry and that's how the idea started."

Michael Berkowitz explains the initial spark for his business, which was a personal quest for a coat that balanced style and functionality. He desired outerwear that was presentable and warm, avoiding the overly casual or branded options available, which led him to conceptualize a product that met these specific criteria.

"And that's when I start to realize okay if there's no brand that's really cornering this space there might be an item here and there that's a step in the right direction but there's no brand that this guy and other people would answer is go get yourself one of these that's when I realized okay maybe it's not about a product here but there's a whole brand that could brand itself around you know luxury performance wool and cashmere."

Michael Berkowitz describes his realization that the market lacked a dedicated brand for high-quality, stylish, and functional outerwear. He identified an opportunity not just for a single product, but for an entire brand built around the concept of luxury performance, focusing on materials like wool and cashmere.

"I did not quit my job right away just off an idea I um I first tested it out I made some samples and I actually took my nights and weekends uh in my very busy schedule to go around to specialty shops across the northeast corridor so boston down to dc and literally played the role of a traveling salesperson with a suitcase with a couple of samples and showed these stores and these were stores that were selling barbour let's say on the lower end up through um zegna and brunello cucinelli on the on the higher ends and showed them the idea and the nicest thing was I never really had to explain what we were trying to accomplish they all right away nodded their head when I said the problem and they're like yeah we got it you know it's it's that canada goose warmth in something that looks much more uh professional and clean and small and fitted and so when they started buying units and they started selling them without me there they put it on their floors and placed orders and they put on their floors and whether we were on the higher price point or right smack in the middle or even on the lower end they um they sold really well."

Michael Berkowitz outlines his methodical approach to validating his business idea before leaving his job. He personally presented samples to specialty retailers, finding immediate validation from store owners who recognized the unmet need for warm yet professional-looking outerwear, which led to initial sales and orders.

"And that's when I realized okay maybe it's not about a product here but there's a whole brand that could brand itself around you know luxury performance wool and cashmere."

Michael Berkowitz explains his strategic shift from focusing on a single product to envisioning a comprehensive brand. He recognized the potential to build an entire identity around luxury performance wear, utilizing premium materials like wool and cashmere.

"And that's when they started to place orders for the next fall winter uh that's when I that's when I quit my job and lined up some investment."

Michael Berkowitz pinpoints the critical moment when he decided to leave his stable job and pursue his entrepreneurial venture. The consistent reordering of his products by retailers for the subsequent season signaled strong market demand, giving him the confidence to secure investment and fully commit to his coat company.

"And you know what relationships grew as we started ordering more and paying for everything on time and going through all the trials and tribulations of life and covid and all this you know fast forwarding years later but it took time to really develop that but we had to really strategically think about how to penetrate because there might have been an item that we wanted we knew that existed but it'