Kenneth Cole says wholesale won't build your brand if you don't own the customer relationship

The department store dream has a trapdoor, and Kenneth Cole knows exactly where it opens. On How I Built This, Cole told a young fashion founder that wholesale can move merchandise, but it probably won’t build the brand unless she finds a way to own the customer relationship herself.

That sounds almost rude in the house that department stores built. Cole came up in the old system, when brands were made on selling floors, in print ads, and through buyers who could make or break a season with a purchase order. Guy Raz even reminded listeners that Cole launched his shoe business from the back of a 40-foot truck in Midtown Manhattan, then grew it into a public company before buying it back. If anyone in this episode had earned the right to romanticize wholesale, it was him.

He did the opposite.

And the wholesale world is getting smaller right now. We’re seeing a lot of, you saw what happened with Saks and Hudson’s Bay, to your point. And I don’t know if you’re going to find a lot of growth opportunities in the short term.

The advice landed during a call with a Toronto womenswear founder who had real traction at Nordstrom but a familiar problem: sales through the retailer were not turning into a direct customer base. She had imagined wholesale as a kind of brand catapult. Cole heard something less magical. Wholesale, in his telling, is a pipe. Useful, sometimes profitable, but still a pipe.

Wholesale is distribution, not affection

Raz put the problem in the cleanest terms of the hour: the wholesale side was acting like distribution, not marketing. That distinction is the kind of thing founders nod at and then ignore because the purchase orders feel so good. A retailer validates the product. A big store logo looks adult. The revenue arrives in chunks instead of drips. Suddenly the business has numbers.

But numbers are not a relationship. A Nordstrom shopper may love the dress and still remember only Nordstrom. This is the cruelty of the rack: the brand can be physically present and emotionally invisible.

And if you have a direct relationship with the consumer, you run the show. You can tell the story you want on your terms to the degree you want to tell it. And you have more flexibility.

Cole’s verdict is mostly right, with one large, expensive asterisk. Direct-to-consumer gives a founder control, but control costs money. Ads are expensive. Returns are annoying. Email lists do not fall from the sky like blessed confetti. The DTC boom sold founders a fantasy that every brand could become a tiny Nike with a Klaviyo account and vibes. Many learned that buying attention online can be its own department store, just with worse lighting and more dashboards.

Still, Cole was not peddling DTC purism. He was warning against confusing the retailer’s reach with your own. That is a useful distinction, especially in fashion, where the product has to do more than fit. It has to mean something. It has to be remembered after the bag is recycled.

Nordstrom is not your customer acquisition department

The founder had tried QR codes and packaging inserts, the modern founder’s version of whispering, please follow me, into a shopping bag. Cole did not mock the idea. He just pointed out the power imbalance.

Nordstrom, by the way, is very sophisticated in that regard. They’re very careful. They’re not going to build a following and then just hand it off to the vendor.

That is the episode’s most useful cold shower. Retailers are not incubators with cash registers. They have their own loyalty programs, their own data, their own margins, their own reasons to keep the customer inside their walls. A vendor can ask for connection, but the ask has to benefit the retailer too. Repairs, care registration, exclusive drops, events, trunk shows, anything that makes the brand feel more valuable inside the store rather than trying to tunnel out of it.

Cole’s own history sharpened the point. He said he opened stores early because even strong wholesale accounts couldn’t tell the Kenneth Cole story the way he wanted it told. The store was not just a store. It was a stage, and probably an expensive one.

I opened stores early on in my business development because I found that I initially was selling the better stores, but I wasn’t able to tell the story I wanted to tell in my terms, from my point of view, a hundred percent from my point of view.

The advice line format usually rewards tidy fixes, change the packaging, call the golf pro, make a better landing page. This one was more uncomfortable. If Cole is right, the founder’s problem is not a missing QR code. It is a structural problem hiding inside a success story. Wholesale can make the revenue line look healthy while the brand muscle stays underdeveloped.

So the stake for any founder listening is concrete: treat every wholesale order as rented attention. Great, take the order. Celebrate the sell-through. Then ask the brutal question Cole kept circling, when the customer walks out, do they remember you, or do they remember the store?