Few entrepreneurs think about their genealogy as much as Alex Kump, whose apparel company Topo Ranch is named after his family’s long-ago cattle ranch.
Kump’s great-great-grandfather came to California from Missouri with the historic Donner Party. After surviving the winter of 1846-47, he purchased one of the last Mexican land grants, a 40,000-acre spread near King City. He named it Topo Ranch, a reference to Mexican slang for gopher.
The family controlled the ranch until 1932, when the bank foreclosed on the mortgage during the Great Depression.
“The story of Topo Ranch has always been in my family, retold at Thanksgivings about this bustling cattle ranch,” said Kump. “I’ve always kept it in mind as a metaphor for what I could do by staking my claim and going for my dream.”
In 2004, Kump teamed up with partner Eric Hartnack, a former marketing executive at Old Navy and Patagonia Inc., to launch an organic apparel company. (Topo Ranch uses cotton certified by the Global Organic Textile Standard.) Hartnack financed the venture with his last annual bonus from Patagonia, and later with funds from individual investors.
“We started hashing out this lifestyle concept that was built around Topo Ranch,” Hartnack recalled. “The ranch’s history had been well-preserved in journals, books and photo albums. Inspiration for the clothes comes from those photos.”
The startup company had a clear mission: buy back the ranch and restore its legacy, a goal the founders are reconsidering. The company launched in 2004 as a clothing wholesaler, selling to about 20 retail chains and boutiques.
The product line includes western-style T-shirts, collared shirts, pants and jackets. The shirts have names such as the “Stanton Hoodie,” a hooded sweatshirt with ties like those on pioneer garb, and “The Duster,” a coat that drops to midthigh, similar to riding wear.
“Their style is not so trendy, it’s more wearable,” said Billy Jun, chief executive of Paradigm, a clothing manufacturer in Los Angeles that finishes many items for Topo Ranch.
Prices for T-shirts start around $35, formal shirts go in the $60-$100 range, and hoodies run as high as $170. Topo expects to surpass revenue of $3 million this year.
In addition to stylistic details such as shoulder yokes or cowboy buttons, every article of clothing is related to the ranch and its history.
“Each item has a little story about the ranch connected to it,” said Hartnack. “We communicate the story on the hang tag and in the store through imagery on the walls.”
Today, Topo Ranch distributes apparel to about 200 retail stores, including the Lisa Kline chain. The clothes also sell online and at two company-owned stores, one in Venice and another in Boulder, Colo.
Allan Haims, principal at apparel consulting firm Aser Marketplace LLC in Sherman Oaks, gives Topo Ranch high marks for positioning its products in the upscale Southwest corner of the clothing market, but he cautions that its high prices run counter to the “value equation” mentality of today’s consumers.
“The challenge to sell a $98 fleece top is that it has to have some value other than a name on it these days,” said Haims. “Topo Ranch has this Southwest feel, so it’s hard to compare their attitude to other brands, but in terms of buyer demographics, these are the same people who shop in the better department stores. Right now those retailers are heavily discounting their prices.”
Haims said Topo should offer free shipping, two-for-one, or other perks that chains use to entice consumers to buy.
But that runs against the homespun image of the brand and the noncommercial customers to which it caters.
“Obviously, there’s a green apparel moment and we’re part of that trend,” said Kump. “We have been understated, not screaming our brand name across the chest of our garments. That appeals to a lot of consumers.”
Betting on the ranch
The idea of buying back the ranch was initially a driving force for the company’s founders. But now they’re thinking it might not be practical.
“Right now we’re just getting profitable, so coming up with an extra $20 million is a pretty steep climb,” said Kump. “Besides, what would we do with the ranch? For us to buy a piece of property doesn’t help our customers.”
But Hartnack hopes to eventually transform the save-the-ranch concept into some environmental or educational purpose.
“Having put four years into this company, we can now implement the philanthropic aspect of its mission,” he said.
On the business side, Hartnack plans to open two stores in the next 18 months. Both Topo Ranch stores opened so far achieved profitability very quickly. Opening two more will require a new round of investing, which he’s seeking from previous backers.
Haims said that now may be a good time for Topo to expand. There is a lot of vacant space in malls because of numerous retail chain bankruptcies, so Topo Ranch can get good locations at low rents.
Hartnack said that his ultimate goal is to get private equity funding and grow to 150 stores.
“Retail may be capital intensive,” he said. “But we’re turning a profit on individual units so the concept is working.”
TOPO RANCH
HEADQUARTERS: Marina del Rey
CHIEF EXECUTIVE: Eric Hartnack
FOUNDED: 2004
CORE BUSINESS: Makes organic apparel with western styling inspired by a working cattle ranch from 100 years ago
EMPLOYEES IN 2009: 12 (up from 6 in 2008)
GOAL: Open two more stores, for a total of four, in the next 18 months; get private equity funding and grow to 150 stores
DRIVING FORCE: Growing consumer preference for clothing made with organic
cotton and other sustainable materials
