Theory is a New York

New York City

New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...

-based men's and women's contemporary fashion

Fashion

Fashion, a general term for a currently popular style or practice, especially in clothing, foot wear, or accessories. Fashion references to anything that is the current trend in look and dress up of a person...

 label

Brand

The American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...

 known for its clean-line and luxuriously simple clothes and accessories. Theory merchandise is sold through signature Theory stores

Retailing

Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...

 and upscale retailers around the world. The brand is owned by Fast Retailing

Fast Retailing

is a Japanese retail holding company. In addition to its primary subsidiary Uniqlo, it owns several other brands, including Aspesi, Comptoir des Cotonniers, Foot Park, g.u., Princess Tam-Tam and National Standard....

 of Japan

Japan

Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...

.

Origins and development

In 1997, Andrew Rosen, a "third-generation doyen of the New York garment industry", former CEO of Anne Klein

Anne Klein

Anne Klein was an American fashion designer who founded her own women's sportswear and apparel label.-Biography:Anne Klein was born as Hannah Golofski in a Jewish family in Brooklyn, New York on August 3, 1923...

 and Calvin Klein

Calvin Klein

Calvin Richard Klein is an American fashion designer who launched the company that would later become Calvin Klein Inc. in 1968. In addition to clothing, Klein has also given his name to a range of perfumes, watches, and jewelry....

 executive, and Elie Tahari

Elie Tahari

Elie Tahari is an Israeli-American luxury fashion designer of men and women's clothing. Elie Tahari, Ltd., the company he founded, has annual revenue of around $1 to 2.5 million...

 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, the collection turned out to be so successful that it launched a men's collection in 1999.

In 2000, a license agreement was formed with Link International of Japan, established in 1998, to manufacture, and distribute

Distribution (business)

Product distribution is one of the four elements of the marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user.The other three parts of the marketing mix are product, pricing,...

 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.

Acquisition by Link International and Fast Retailing

In September 2003, Link International bought an 89% stake

Share (finance)

A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in...

 in the Theory company for $ 100 mio., after Japanese giant textile firm Fast Retailing

Fast Retailing

is a Japanese retail holding company. In addition to its primary subsidiary Uniqlo, it owns several other brands, including Aspesi, Comptoir des Cotonniers, Foot Park, g.u., Princess Tam-Tam and National Standard....

 Co. of Tokyo, established in 1963 and owner of the popular Uniqlo

UNIQLO

is a Japanese casual wear designer, manufacturer and retailer.The company was originally a division of Fast Retailing Co., Ltd.. On November 1, 2005, it was restructured as a separate wholly owned subsidiary called Uniqlo Co., Ltd. , which is listed on the first section of the Tokyo Stock...

 brand, had acquired a 47.1% stake in Link. 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". 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.

Style and designers

Incorporating a more casual business style, the collections consist of simple, quiet, "uncomplicated and unassuming" 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" the label still attracts a cult-like following amongst fashion conscious consumers. Retail prices range from about $200 for blouses, shirts and pants to $300 for summer dresses and $500 for blazers, for example.

Link Theory Holdings

Theory's owner, Link Theory Holdings (LTH), bought fashion house Helmut Lang

Helmut Lang (fashion brand)

The Helmut Lang fashion brand was created by Austrian fashion designer Helmut Lang in 1986. One of fashion’s most independent and visionary minds, Helmut Lang’s utilitarian designs came to define the 90’s...

 from Prada

Prada

Prada S.p.A. is an Italian fashion label specializing in luxury goods for men and women , founded by Mario Prada.-Foundations:...

 " 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

Core competency

A core competency is a concept in management theory originally advocated by CK Prahalad, and Gary Hamel, two business book writers. In their view a core competency is a specific factor that a business sees as being central to the way it, or its employees, works...

 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

Aoyama, Tokyo

is a neighborhood of Tokyo, located in the northeastern Minato Ward. During the Edo Period, Aoyama was home to various temples, shrines, and samurai residences. The name Aoyama derived from a samurai named Aoyama Tadanari who served the Tokugawa Shogunate and held his mansion in this area...

, Tokyo

Tokyo

, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...

.

Stores

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

Bloomingdale's

Bloomingdale's is an American department store owned by Macy's, Inc. .Bloomingdale's started in 1861 when brothers Joseph and Lyman G. Bloomingdale started selling hoop-skirts in their Ladies Notions' Shop on Manhattan's Lower East Side...

, Lord & Taylor

Lord & Taylor

Lord & Taylor, colloquially known as L&T, or LT, based in New York City, is the oldest upscale, specialty-retail department store chain in the United States. Concentrated in the eastern U.S., the retailer operated independently for nearly a century prior to joining American Dry Goods...

, Saks Fifth Avenue

Saks Fifth Avenue

Saks Fifth Avenue is a luxury American specialty store owned and operated by Saks Fifth Avenue Enterprises , a subsidiary of Saks Incorporated. It competes in the high-end specialty store market in the Upper East Side of Manhattan, i.e. 'the 3 B's' Bergdorf, Barneys, Bloomingdale's and Lord & Taylor...

, Neiman Marcus

Neiman Marcus

Neiman Marcus, formerly Neiman-Marcus, is a luxury specialty retail department store operated by the Neiman Marcus Group in the United States. The company is headquartered in the One Marcus Square building in Downtown Dallas, Texas, and competes with other department stores such as Saks Fifth...

, Barneys New York

Barneys New York

Barneys New York is a chain of luxury department stores headquartered in New York City. The chain owns large stores in New York City, Beverly Hills, Boston, Chicago, San Francisco, Dallas, Las Vegas, and Scottsdale, and smaller stores in other locations across the United States.Brands sold include...

, and Nordstrom

Nordstrom

Nordstrom, Inc. is an upscale department store chain in the United States, founded by John W. Nordstrom and Carl F. Wallin. Initially a shoe retailer, the company today also sells clothing, accessories, handbags, jewelry, cosmetics, fragrances, and in some locations, home furnishings...

, as well as Holt Renfrew

Holt Renfrew

Holt Renfrew is a chain of high-end Canadian department stores. It is comparable to Barneys New York and Saks Fifth Avenue in the United States, and to two other upmarket chains owned by the same family, Britain's Selfridges and Ireland's Brown Thomas...

 in Canada. In Europe, signature Theory stores exists in Athens

Athens

Athens , is the capital and largest city of Greece. Athens dominates the Attica region and is one of the world's oldest cities, as its recorded history spans around 3,400 years. Classical Athens was a powerful city-state...

, Monaco

Monaco

Monaco , officially the Principality of Monaco , is a sovereign city state on the French Riviera. It is bordered on three sides by its neighbour, France, and its centre is about from Italy. Its area is with a population of 35,986 as of 2011 and is the most densely populated country in the...

, and Paris

Paris

Paris is the capital and largest city in France, situated on the river Seine, in northern France, at the heart of the Île-de-France region...

 and showrooms are maintained in Milan

Milan

Milan is the second-largest city in Italy and the capital city of the region of Lombardy and of the province of Milan. The city proper has a population of about 1.3 million, while its urban area, roughly coinciding with its administrative province and the bordering Province of Monza and Brianza ,...

 and London

London

London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...

. The brand is also sold in Europe through upscale boutiques and exclusive department stores, such as Printemps

Printemps

Printemps is a French department store .The flagship Printemps store is located on Boulevard Haussmann in the IXe arrondissement of Paris along with other well-known department stores like Galeries Lafayette. There are other Printemps stores in Paris and throughout France...

 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

North America

North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...

, Theory has boutiques in Aspen

Aspen

Populus section Populus, of the Populus genus, includes the aspen trees and the white poplar Populus alba. The five typical aspens are all native to cold regions with cool summers, in the north of the Northern Hemisphere, extending south at high altitudes in the mountains. The White Poplar, by...

, Atlanta, Aventura

Aventura, Florida

Aventura is a planned, suburban city located in northeastern Miami-Dade County, Florida. The city name is from the Spanish word for "adventure", and was named "Aventura" after one of the developers of the original group of condominiums in the area remarked to the others, "What an adventure this is...

, Boca Raton, Costa Mesa, Greenwich

Greenwich, Connecticut

Greenwich is a town in Fairfield County, Connecticut, United States. As of the 2010 census, the town had a total population of 61,171. It is home to many hedge funds and other financial service companies. Greenwich is the southernmost and westernmost municipality in Connecticut and is 38+ minutes ...

, Los Angeles

Los Ángeles

Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...

, New York City

New York City

New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...

, 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.

Lawsuit

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. Link Theory called Tahari's complaint "frivolous claims", 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.

External links

• Theory.com (official web site)
• LTH - Link Theory Holdings web site