The Nine Lives of Acne Studios

Four lessons from an indie luxury brand that defied the odds

Why read this:

  • Discover how the founders of a creative-driven fashion brand defied the odds and brought in outside capital without losing creative control.

  • Learn how both creative and business “best practices” can lead to marketing and merchandising missteps, and what to do instead.


Acne Studios seems to “have it all”: the brand has managed to scale globally without losing its reputation for creative cool, and the founding partners have grown wealthy in the process.

Acne is often cited as a role model by creative entrepreneurs—they want to achieve the same balance of financial success and creative control. Here are four lessons we can learn from the brand’s journey.

Background: Acne Studios 101

Acne was founded in 1996 in Stockholm, Sweden as a creative collective modeled after Andy Warhol’s Factory. The four founding partners offered graphic design, film, production and advertising services. 

Fashion was introduced into the mix in 1997 when founding member Jonny Johansson created 100 pairs of raw denim jeans and gave them away to friends. From that point on, the denim and ready-to-wear business grew and spun off into a separate entity named Acne Studios in 2006—this is the fashion brand we know today.

The brand now had two equal co-owners: Johansson and MBA grad Mikael Schiller, who was hired in 2001 to stabilize the business after a period of financial losses.

Acne Studios became a favorite of the first wave of fashion bloggers and street style stars in the early 2010’s and became strongly associated with “Scandi Style”. 

More recently, it has become a favorite of the streetwear set, especially after the launch of the “face motif” collection in 2017 and some footwear launches around the same time period.

In 2018 the brand sold a 41% stake to two outside investors, IDG Capital and Hong Kong-based I.T Group. Revenues at that time were estimated to be $221 million with an EBITDA of $35 million—a 16% margin.

For comparison, the Kering group ended fiscal 2019 with close to a 38% EBITDA margin, and LVMH posted a 20% EBITDA margin in their most recent fiscal quarter. For a privately owned David amongst these Gollaiths, Acne’s performance is not too shabby.

And now, the lessons…

Lesson #1: Creativity Thrives Under Constraint

Acne Studios almost didn’t make it into the 21st century. The fashion/apparel arm of the business was close to bankruptcy by 2001.

How did things go sideways so fast? Acne expanded their fashion ambitions from denim into a full men’s and women’s ready-to-wear businesses within a year and pursued a global wholesale strategy soon after that. Although the brand was hot, none of these activities were profitable.

Jonny Johansson brought on MBA graduate Mikael Schiller in 2001 to help stabilize the business. Schiller called up the brand’s debt holders and offered an ultimatum: Acne would pay back 30% of what was owed, or the brand would declare bankruptcy. Everyone agreed to these terms, and the brand was saved. #restructuring

This negotiation approach was a form of creativity, and Schiller continued to develop innovative approaches for balancing the creative and financial needs of the brand.

In interviews, Schiller will often speak to Johansson’s need to stay creatively engaged in the business by pursuing new projects constantly. To accommodate this, Schiller will craft a strategy that leaves space for these projects in a way that won’t neglect the “bread and butter” of the brand.

For example, Johansson asserted that he needed to continue producing runway collections after the restructuring—he wasn’t interested in simply making jeans. In response, Schiller narrowed the geographic scope of the business to focus on Scandinavia only. This narrowed focus let the company nail down profitable systems for sales, logistics and inventory forecasting.

In turn, Johansson seems to appreciate Schiller’s flexibility and will work his creative magic within the constraints provided.

TL;DR: at Acne Studios the business and creative interests not only work together, but push each other forward.

Schiller appreciates the value in Johansson’s “vital energy”, while being equally creative in crafting a strategy that addresses the needs of both sides. The result is often a 1+1 = 3 outcome, and it starts from a place of trust and respect.

Lesson #2: Hot Items Keep The Lights On, But They Don’t Build A Brand

Although Acne Studios participates in the traditional fashion calendar and holds runway shows, the runway product isn’t driving the brand’s financial success.

Cash flow comes from several categories that offer a (relatively) accessible price point and a consistent merchandising strategy that drive repeat business.

The most obvious example is the denim business, which benefited from several macro trends: the “designer denim” boom of the early 2000’s, a seal of approval from the fashion press, and popularity with bloggers and influencers—many of whom hailed from Scandinavia and were familiar with the brand.

Although co-owner Jonny Johansson has expressed frustration and disinterest with the denim category at various times since the brand launched, you can still buy a pair of Acne jeans today, more than 20 years on.

Acne Studios also produced several “hot items” over the past decade which have taken off with influencers and consumers. The pistol boot and oversized shearling bomber are two examples. You couldn’t swing a cat on the LES in 2012 without hitting one of these: 

The brand still sells these products today. Although they are fairly hidden on Acne’s own eCommerce site, a Google search will reveal that they still have fairly broad wholesale distribution.

More recently, Acne leaned in to men’s desire to really start dressin with an expanded men’s offering and footwear launches that appeal to the streetwear crowd.

Wether it’s setting trends or buying into them, it’s obvious that there is a strong merchandising influence at Acne Studios. The brand has grown revenue and consumer mindshare without being pigeonholed into a single trend, item or subculture.

TL;DR: to get the most out of hot items, you need to get over yourself.

Each fashion brand contains two wolves: the creative wolf will kill something as soon as it becomes popular because it’s hungry for the next thing. The business wolf will scale distribution of the product as quickly as possible to fully capitalize on the moment.

By taming these wolves instead of feeding them, Acne Studios was able to profit on their best-selling styles without losing their overarching brand identity.

Lesson #3: You Need More Than Ads To Build A Brand

The early 2000’s were peak high fashion-mania, high budget campaign shoots, and glossy print advertising. In 2007 Vogue published five pounds and 840 pages worth of “fearless fashion”, at least two-thirds of which was advertising.

Acne Studios ran zero paid advertising during this time. Instead, they launched their own magazine in 2005 titled Acne Paper:

Each issue of Acne Paper revolved around a single theme. It featured reporting, interviews and photography from contributors inside and outside of the mainstream. There was no explicit promotion of Acne product and no advertisements.

Each issue had a limited print run, and was primarily available for sale via the brand’s retail stores, high end newsstands, and online.

Thomas Persson, the editor of Acne Paper, summarized the value of the project in 2011: 

It’s worthwhile for a brand to put money into such products, even—especially!—if it doesn’t talk about the brand. It creates positive vibes around Acne, gives a much more valuable currency… rather than talking about a pair of shoes.

This echoes the sentiment social media marketing gurus would start to flog only a few years later—brands can build goodwill with customers and prospects by offering something of value with no expectation of a sale.

The final issue of Acne Paper was published in 2014. Coincidentally, this is when digital “content marketing” really started to take off.

Acne has expanded into paid media in recent years, but they are more likely to wheatpaste the campaign imagery in the same neighborhoods as their retail stores than to run an ad in Vogue. 

The brand’s signature pink shopping bags also serve as local marketing. These bags may be someone’s first exposure to the brand—if you see a cool local carrying this loud shopping bag, you’ll immediately wonder where they got it from.

By investing in activities that accelerated word of mouth interest in the brand, Acne was able to create a solid foundation of cultural capital on which to grow. It’s more meaningful to hear about something new from a cool friend than from an Instagram ad.

TL;DR: building momentum gradually creates a long term asset—credibility.

Paid advertising will help you reach more of the current addressable market faster. The right organic brand building activities will help you grow the current addressable market and generate high-intent consumer demand.

But that doesn’t mean you can just “do cool shit” and call it marketing. And don’t forget the hero products to generate cash flow! (see #2)

Lesson #4: If The Journey Is Long And Hard, You Need Focus…Or You’ll Die Before You Get There

Fashion is the only industry where you need to pointedly ask a founder-creative what they want out of their business venture. 

In most industries, the answer will always be “maximize the financial outcome”. But in fashion, the answer is typically some confused mix of creative fulfillment, financial compensation and pure ego. Often, the founder can’t even admit what he or she wants.

In 2017, rumors began to circulate that the founders of Acne Studios were looking for an outside investor. By 2018, they succeeded in selling a total of 41% of the business to two firms: IDG Capital and Hong Kong-based I.T Group.

This deal enabled the co-owners Johansson and Schiller to maintain creative and strategic control over the brand while realizing some financial upside from their two decades of hard work. This is every founder-creative’s dream scenario, and a rare outcome. 

The business’ strategic moves in the years leading up to the sale indicate that Acne was pursuing this goal mindfully, which increased their chances of landing the right buyer and the right terms.

Potential investors want to see a few things: (1) strong operational fundamentals, (2) a good growth story, and (3) an obvious path to future growth.

Schiller spent his first ten years at Acne addressing the first point.

In the 3-5 years leading up to the sale, the brand addressed #2 by accelerating the pace of new store openings, launching a recognizable brand marker (the face motif collection), and working to strengthen and expand categories outside apparel.

Schiller and Johansson addressed #3 point by speaking more frequently to the press starting around 2016. These interviews emphasized the brand’s growth and profitability, as well as their opinion that the brand had many untapped growth opportunities, including leather goods and expansion in China.

The increase in press also got the word out to potential investors, which (probably—I can only speculate) lead to a more competitive bidding process.

TL;DR: maintaining creative control is possible, but it requires good management and intentional effort.

For Acne Studios, getting the right deal required almost five years of work. That type of lead time requires unwavering commitment to the end goal.

These outcomes are rare because many brands are unable to pick a path or identify their true growth drivers. Many are also reluctant to bring in outside capital until and unless circumstances become dire—this leads to the worst outcome for the original owner(s).

Additional reading: the articles and interviews I referenced to write this edition:


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