'Spend on standout pieces': Lilly Pulitzer CEO talks brand ahead of 65th anniversary

Known for its resort-style dresses in pastel colors and tropical motifs, the Lilly Pulitzer brand was launched in 1959 when its founder and namesake decided to start a juice company to bring more meaning to her life as a Palm Beach socialite.

"The dress needed to be able to hide the stains that [Lilly] was getting from squeezing the juice on herself — all of those bright colors," Michelle Kelly, who is the current president and chief executive of Lilly Pulitzer, told TheStreet in an exclusive interview. "The short version of the story is that people started to like her dress more than her juice and would say 'the juice is fine but where can we get one of those?'"

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Currently under Oxford Industries  (OXM) - Get Free Report alongside other resort-style brands like Tommy Bahama and Johnny Was, the Lilly Pulitzer brand is about to celebrate the 65th-year anniversary of it being in business.

TheStreet took the opportunity to chat with Kelly about everything from how people are shopping during a challenging economy to leading a well-established brand into a new generation. The interview has been edited for length and clarity.

TheStreet: 65 years is a long time to be in fashion. How have you maintained brand consistency while also keeping Lilly Pulitzer modern for new generations of buyers?

Kelly: I think the brand DNA has stayed so true to what it is and how it started but when I really look at how the product has evolved and how the business side of it has evolved, the way that customers shop is light years different. We started with dresses in woven fabrics just due to the nature of what was available at the time — there wasn't as much flexibility in the construction and how the dresses were made. Fast-forward to today, we not only have dresses but we of course have a full sportswear complement of activewear and athleisure. We have a line called Luxletic that has golf and tennis and we have swimwear, cover-ups and home and gifts. So the product line has evolved which just allows us to get to more people and to create more occasions to wear Lilly. 

'It's been so hard to plan,' says Lilly Pulitzer chief executive

There's also the way that we sell. We now have 63 stores that are operated by the companies and we still have a really thriving wholesale business and, of course, a digital business that did not exist 65 years ago. I really think that brands which have a really balanced selling service model are finding some success.

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What are some of the challenges that arose specifically over the last two years, or what many call the "post-pandemic years"?

The hardest thing is that it's been so hard to plan. There's been so much uncertainty and unpredictability in the customer's life — what activities she has been able to do over the years, what she wants to do. It's much easier to organize and galvanize the efforts of a large group of people when we have a good sense of what may be coming down the road. I want to applaud our team for that and, of course, many others in the industry who have been able to be so nimble and agile.

Has inflation affected your company either in terms of manufacturing and overhead costs or the customer's ability to purchase?

There have been a number of challenges related to just the underlying economics of the business. The first place we saw it show up was certainly in the supply chain. Freight challenges and the whole shipping crisis of 2021 and 2022 was just awful. Talk about hard to plan; we didn't know which products were going to be coming in that day versus the stuff that we had ordered that wasn't going to come in for another month. 

Then when the customers started to feel that the costs were going up everywhere, we saw the customer not necessarily pull back her spending but be very selective and buy only what is a must-have. Some of those items were on the more expensive side of the pricing scale so it wasn't about price necessarily but we just got the sense that customers were feeling that a lot of the costs in their lives had gone up and their spending priorities had shifted to restaurants and going out and traveling again so when it came to the clothing part of her purchasing, she wanted to spend on the standout pieces that we have plenty of. Something that makes her heart sing as opposed to practical purchases.

What are the brand's plans for the future?

In our business we're always thinking at least a year out so a lot of our attention is definitely going to turn to the product side and the planning side soon after [the anniversary]. Big picture, we still have great opportunity to find customers who would be interested in Lilly. I cannot think of a time when I told the story and what the brand represents about finding one's happiness and path while marching against the grain that didn't get people excited. I'd love to get that story out there for more people.