Theory (marketed theory in lower-case letters) is a New York-based men's and women's contemporary fashion label known for its clean-line and luxuriously simple clothes and accessories. Theory merchandise is sold through signature Theory stores and upscale retailers around the world. The brand is owned by Fast Retailing of Japan.
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In 1997, Andrew Rosen, a "third-generation doyen of the New York garment industry"[1], former CEO of Anne Klein and Calvin Klein executive, and Elie Tahari founded Theory LLC as a women's fashion label in New York City. Launched as a women's collection, with a focus on comfortable stretch pants[2], the collection turned out to be so successful that it launched a men's collection in 1999.[3][4]
In 2000, a license agreement was formed with Link International of Japan, established in 1998, to manufacture, and distribute the brand as well as operate stores under the Theory name in Asia, predominantly Japan. The label proved highly successful in the Asian market. Women’s handbags and shoes were introduced in 2003, and launched nationally in the U.S. for Spring 2006.
In September 2003, Link International bought an 89% stake in the Theory company for $ 100 mio., after Japanese giant textile firm Fast Retailing Co. of Tokyo, established in 1963 and owner of the popular Uniqlo brand, had acquired a 47.1% stake in Link.[5] Rosen received $ 49 mio, retained the remaining 11 % in the new company, was replaced as CEO by Chikara ‘Ricky’ Sasaki of Link but remained president and COO. Tahari was allocated $53 mio of the sale and had no shares in the new company which was renamed Theory Holdings. The deal was explained by the fact that the label was to become a truly "global brand".[6][7] The Japanese parent company has since then traded under the name of Link Theory Holdings and went public in 2005. Fast Reailing had held a 32.32% stake in LTH since 2004 and, in spring 2009, after acquiring the remaining stock, LTH became a fully owned subsidiary of Fast Retailing.
Incorporating a more casual business style, the collections consist of simple, quiet, "uncomplicated and unassuming"[1] suits, coats, shirts, blouses, skirts, pants, sweaters, shoes, and accessories with clean silhouettes made of fine materials. Even though the clothes "have virtually no profile, in part because they are often intentionally nondescript" and are hence "almost impossible to identify"[1] the label still attracts a cult-like following amongst fashion conscious consumers.[6][8] Retail prices range from about $200 for blouses, shirts and pants to $300 for summer dresses and $500 for blazers, for example.
Theory's owner, Link Theory Holdings (LTH), bought fashion house Helmut Lang from Prada "[9] and German fashion label Rosner in 2005. Rosner's European production and distribution network was to help expand the Theory label in the European market over the following few years. However, in the end of 2008, Link Theory sold Rosner to a German private equity firm reasoning that LTH was to penetrate the European market by means of their own European subsidiaries.
Theory is Link Theory's core brand. Other brands include Helmut Lang, Proof, PLS+T and footwear label Jean-Michel Cazabat. For the Japanese market, exclusive sub-labels of the Theory brand, such as 'Theory men', 'Theory luxe', 'Theory petit' have been created. Link Theory is headquartered in Aoyama, Tokyo.
As of 2008, Theory maintains 16 signature retail stores as well as 13 outlet stores in the U.S. The label is sold at major retailers, such as Bloomingdale's, Lord & Taylor, Saks Fifth Avenue, Neiman Marcus, Barneys New York, and Nordstrom, as well as Holt Renfrew in Canada. In Europe, signature Theory stores exists in Athens, Monaco, and Paris and showrooms are maintained in Milan and London. The brand is also sold in Europe through upscale boutiques and exclusive department stores, such as Printemps in France, Harvey Nichols in the UK or Coin Excelsior in Milan. In Asia, numerous Theory stores are located in China, Japan, South Korea, and Taiwan. In Japan, the company also offers price-reduced merchandise at eight signature outlet stores. The company's web site lists no store locations for South America, Africa, or Oceania.
In North America, Theory has boutiques in Aspen, Atlanta, Aventura, Boca Raton, Costa Mesa, Greenwich, Los Angeles, New York City, and San Francisco. The Theory label's headquarters and design offices are located in New York City's Meatpacking District, at 38 Gansevoort Street. The building also houses a Theory flagship store.
In 2006, Tahari sued his former partner Rosen (as well as Link Theory Holdings and Mr. Sakasi) for having urged Tahari to sell Theory at a price below its value to the Japanese in 2003, seeking damages and a share in the proceeds from the company's IPO in excess of $180 million. Rosen had also said that he would retire from the company within a year from the sale when, in fact, after Tahari's departure, he stayed on as the newly established company's president.[10] Link Theory called Tahari's complaint "frivolous claims"[11], Rosen labeled it "seller's remorse" and the case was later dismissed by a New York judge, even denying Tahari's claim for unpaid royalties by Theory's then Asian licensee, Link International.[12]