Matthew Scanlan, chief executive officer of Something Navy, is exiting the company, according to sources close to the firm, and the business is exploring a sale.
Scanlan, who continues to be CEO and cofounder of Naadam, the cashmere brand, couldn’t be reached Friday for comment.
Scanlan, an investor in the business, has been with the brand since 2019, and sources close to the brand said they are figuring out the terms of his departure. Scanlan’s affiliation with Something Navy is no longer listed on his LinkedIn page.
Sources said Something Navy is looking to sell a majority stake in the brand and has been meeting with potential business partners. The goal is to have a larger company or licensing company operate the business, while keeping Arielle Charnas, founder and chief creative officer of Something Navy, involved in the creative and marketing end.
In 2019, Charnas raised $10 million from Silas Chou and other investors to start a lifestyle brand headed by Scanlan. Charnas has a minority stake. Among the brand’s investors were Beliade Ventures, L Catterton, Vanterra Capital, Box Group, Jenny Fleiss, Silas Capital, Third Kind Venture Capital, SWAT Equity, Black Jays Ventures and The Seed Lab, among others.
“The Seed Lab is an early-stage investor, after having become quite fond of CEO Matt Scanlan and his operational expertise,” said Jesse Cole, founding partner, The Seed Lab. “What Matt has built with Nadaam gave us comfort with [him] running day-to-day operations internally. There has not been an overload of transparency in the business the past two years, so it comes as a great disappointment to us that Something Navy is parting ways with Matt. The company majority being sold hopefully will clean up their operations and right a ship that’s been misguided over the years.”
Neither Charnas nor Betty Wang, president of Something Navy, could be reached for comment Friday.
News of Scanlan’s exit was first reported in the Business Insider on Thursday.
Sources close to the company said Scanlan wasn’t the right business partner for Charnas and mismanaged the company. Charnas reportedly has been been talking to a couple of potential replacements but needs to have a new apparel or licensing group in place before making the hire.
Something Navy reportedly met with Christopher Burch a few weeks ago, but it couldn’t be learned what became of that meeting. Burch couldn’t be reached Friday for comment.
Something Navy has been experiencing some challenging times the last few years in light of the difficult economy challenging many ready-to-wear firms. Employees have been let go and Something Navy is reportedly operating with a skeleton staff. One source close to the company said the brand is going through a “pause and hiatus” and not shipping new merchandise. The brand’s website currently states: “Attention: We apologize that we are experiencing longer than usual order processing times.”
Something Navy’s store at 1055 Madison Avenue closed several months ago, while its store at 379 Bleecker Street is still operating as the sole Manhattan location. The Melrose Place store in Los Angeles is permanently closed, but the one at Newport Beach, California, is still open, but hasn’t received new merchandise since the beginning of the year.
The 36-year-old Charnas, who is also an influencer and has 1.3 million followers on her personal Instagram, started Something Navy as a style blog in 2009. She worked with Nordstrom on a Treasure & Bond x Something Navy collaboration in 2017 that sold more than $1 million a day. The following year, Charnas and Nordstrom exclusively introduced a stand-alone Something Navy line that sold more than $4.4 million in 24 hours. The brand featured statement pieces and elevated essentials at an accessible price point. After the exclusive partnership with Nordstrom (where at one point the line’s popularity crashed nordstrom.com) ended in 2019, Something Navy became a stand-alone brand in 2020 and began doing e-commerce, wholesale and retail. The company’s first collection launched at the start of the pandemic — in July 2020.
The brand has experienced financial difficulties and has been plagued by challenges, including lackluster sales over the past few years as well as backlash Charnas received early in the pandemic when she secured a COVID-19 test through personal connections at a time when New York was limiting them to those exhibiting specific baseline systems, which Charnas didn’t seem to meet. After testing positive, she then ignored shelter-in-place mandates and left New York City to self-isolate in the Hamptons, which angered social media users, as reported.
Andrew Jassin, managing director of Jassin Consulting Group, said the Something Navy business has had disappointing results and he had heard that it was put up for sale a while ago. “I think as an operating company, it doesn’t have a lot of potential but as an IP portal for directing consumers it probably does. A discount retailer such as T.J. Maxx or Ross Stores could buy the trademark as a direct-to-consumer vehicle and build a consumer franchise.”