Consumer Products and Retail
Stephen Hawthornthwaite | Rothy’s, Inc.
Stephen Hawthornthwaite, Co-Founder and Chairman of the Board
San Francisco, CA
Light on his feet
Stephen Hawthornthwaite applied years of financial strategy experience to creating chic women’s footwear using discarded plastic bottles.
The first gift Stephen Hawthornthwaite gave his then-future wife was shoes. When pressed, he admits that they were, in fact, Manolo Blahniks, and that he had picked them out himself. “I set a high bar out of the gate!” he admits, remembering the bold and extremely high-end present.
Hawthornthwaite was born in South Carolina to a mother who loved clothes. Along the way, he developed his own love for fashion — and for taking risks. Fast-forward four decades, and he is the much-celebrated Co-Founder of Rothy’s, an eco-friendly footwear brand that’s seen explosive growth since it launched in late 2015.
The story of Rothy’s is as intriguing as the unconventional Hawthornthwaite. He had always planned to run his own company, so after finishing law school, he moved into investment banking to find out more about business and finance. In the late 1990s, he found himself immersed in early industry-defining internet deals and ended up staying much longer than he had planned.
“I was probably about age 40,” he remembers, “and kind of looked in the mirror, at all my early gray hair and all the stress of the deal business, and realized, ‘If I’m ever going to start something of my own, I’ve really got to switch gears and go after it.’”
Kicking ideas around
In 2011, he sat down to dinner with close friend Roth Martin, creator of Hedge Gallery, a popular San Francisco design space. Like Hawthornthwaite, Martin fancied a change.
“We started kicking ideas around, and we had a lot of bad ideas!” Hawthornthwaite says with a laugh. “Shoes was the one idea that we kept coming back to. In 2011 in San Francisco, women were wearing workout clothes whether they were going to work out or not, and performance materials were even making their way into the office. But those women were struggling with shoe choices. We saw white space in the market for what we call a front-of-the-closet shoe: an easy choice in the morning, something that was well done, very clean and simple, but also very comfortable.”
Looking back, he admits the idea seemed a little crazy: they were two guys who knew little about the shoe business. “But having no footwear experience worked to our benefit,” he says. “We were able to look at things differently.”
They did their homework. In fact, they spent four years on R&D, discovering that shoes are technically complex, that the manufacturing process is really wasteful, and that the standard merchandising system is broken — resulting in countless shoes being discounted, burned or thrown into landfills. Instead, they chose an innovative knitting technique using recycled plastic water bottles, which effectively reduced waste to zero, allowed for a nimble supply chain and took advantage of a plentiful supply of raw material (over 1 million plastic bottles are sold every minute).
We think of ourselves as an industry leader, but we’re not trying to keep it to ourselves.
An unassuming launch
In December 2015, they launched — quietly — by turning on their website and emailing everyone in their contacts lists. Hawthornthwaite remembers waking on Christmas morning to a deluge of emails. With a team of two, a few consultants and a contract manufacturer, they sold a couple of hundred thousand dollars’ worth of product. Six months later, they were profitable.
Rothy’s opened a factory in China in January 2017, producing all their shoes in-house, and that year grew 1,500%. In 2018, they grew 350%, and this year they expect to double the business. They now have a team of 100 in the US and 600 in China, as well as a store in San Francisco, with plans for six more across the US.
Hawthornthwaite credits Rothy’s success in large part to taking no initial outside investment. Both he and Martin invested $1 million of their own money to get the company to profitability.
“It’s something that distinguishes us and we’re proud of,” he says. “In today’s environment, it’s easy to play the lottery ticket game when it’s other people’s money. But when it’s your money, you’re very focused on it. It’s one of the reasons we were so focused on profitability.”
Another focus was creating a place where people want to work and are passionate about what they do. Rothy’s has an all-female executive team, and 80% of its US employees are women. The company partners with organizations that support women and sustainability, from the Breast Cancer Research Foundation to 5 Gyres and the Surfrider Foundation, and offsets its carbon footprint by donating to the Envira Amazonia Project.
“As a brand, we try to stay clear of superlatives — the most sustainable, the cleanest, or whatever,” Hawthornthwaite says. “We think of ourselves as an industry leader, but we’re not trying to keep it to ourselves. We talk about it as much as we can, and we’re happy to share what we’ve learned with other brands. This is my pride and joy, my passion.”