Khaite New York Store Has Shady Lady Tree, Red Light Dressing Room

Just steps from the historic artists’ watering hole Fanelli Cafe and contemporary stylish SoHo lifestyle pioneer The Mercer hotel, Khaite designer Cate Holstein has built her own New York City landmark.

Located at 165 Mercer, and opening Feb. 16, her first retail store is a tribute to the city's creative landscape and the next step in storytelling for the burgeoning fashion brand. Khaite was founded in 2016 and has crossed the $100 million revenue mark, with ambitious plans to scale over the next five years.

The store design was very much an act of love between Holstein and her architect husband Griffin Frazen, who are expecting their first child, Calder James Frazen, on March 10.

"The first rendering he did was Jan. 26 of last year and it was almost identical to this," said Holstein, who won the CFDA's Womenswear Designer of the Year award in 2022 and is one of New York Fashion Week's most buzzy names.

The cavernous, concrete 4,000-square-foot industrial-meets-natural space is defined by curving, abstract steel dividers à la Richard Serra. Bent steel-tube hang bars display the designer's hand-macrame and crystal-mesh dresses, glossy leather pants, and plush cashmere sweaters like objects in a gallery.

Recessed mirrors in strip lighting reflect a beam onto the floor, drawing the shopper from the door deep into the store and toward the Bucida buceras tree, nicknamed "Shady Lady," that's planted in the floor.

There are lots of corners to explore, including a circular "sanctuary" with a James Turrell-like skylight, a shoe alcove with troweled cement bench, and a shelf made from a single piece of twisted steel displaying $12,000 crystal-covered knee-high boots that are like disco balls for the feet.

"We wanted it to feel like it's breathing, that it becomes a body," she said of the cinematic vision for the urban retail scape, which even has its own version of a red light district — a red-lit dressing room that's an invitation for a dalliance with a camera phone.

"I feel like this has brought us so much closer in a way, the emotional intimacy we have received from working on this together and how in sync we are, I feel like we’re really on this path together now. It's been really rewarding not just for us professionally and creatively, but for our personal relationship," Holstein said of working with Frazen, who has designed sets and spaces for Grimes, Oneohtrix Point Never and Thom Yorke, but not a retail store until now.

Although she feels like she's known Frazen since they were kids, they only started dating two years ago.

"He went to NYU and I went to Parsons…We met in passing in the early 2000s, we don't remember where. We had a lot of mutual friends, but were never close, we were friendly," she said. "Then during the pandemic, we ran into each other somewhere outside. A couple weeks later, we started seeing each other around, then we were at a dinner party together and we have been together every day since."

They married in December.

"We had a courthouse wedding," she said, pulling out her phone to show her screen saver. "The photos are very Memphis 1960s. I’m seven months pregnant, I pulled a sample of a white sequin dress, then we had a nice lunch at The Grill afterward. It was perfect."

Holstein, who grew up in London, still has a romance with New York, even after 20 years.

If Calvin Klein, Helmut Lang and Donna Karan were the torchbearers of the city's sensual, minimalist urban style in the ’80s and ’90s, she is here to pick up the legacy.

She loves the grit. ("It wasn't ‘Miracle on 34th Street’ that made me want to move here, it was ‘Taxi Driver,’ ‘Desperately Seeking Susan,’ ‘After Hours’ and ‘Fatal Attraction,'" she said of her fall 2021 collection shot by director Sean Baker as a short film with a cast of female night crawlers.)

And she appreciates the glamour, from Studio 54 to Bungalow 8. (Shimmering swagged gowns from her spring 2022 collection were inspired by the famed Marie Nichols-designed chain curtains at The Grill, the former Four Seasons space at the Seagram building where she had her wedding lunch.)

She's equally nostalgic about SoHo and its role in setting the stage for her store.

"When I moved to New York 20 years ago, my first introduction to living here was this block, so to come back here has been a dream come true," she said. "We wanted to honor the birth of SoHo as an artistic environment, from Andy Warhol on to the minimalist sculpture movement that Donald Judd, Carl Andre and Richard Serra brought. The birth of minimalist sculpture was when they took everything down onto the ground from being elevated, and it was really about the interaction with people, and people becoming sculpture as well.

"They started their careers with a lot of found objects on the street, so that was where we brought in concrete and steel. There's also this aspect of salt-of-the-earth American industrial materials that we feel are very true to the brand as well. I don't shy away from being an American brand."

There's a link to her own history, too.

"My great-grandfather was actually a coal miner who died of black lung. And my grandfather, Grover Haven, was orphaned in Pennsylvania. Then he moved to San Francisco to live with an aunt, got a swim scholarship to Berkeley, and from there got a scholarship to Harvard Business School. He swept the floors at Filene's Basement and worked his way up in that company to be executive vice president of Federated. He was a merchandiser. So this feels like a seal, honoring my heritage. It's really personal to me."

In addition to clothing and accessories, couture-like runway pieces will be on offer at the store — "things in the $35,000 range" and one-off colorways, she said.

While some fashion followers may balk at the price tags, "We don't feel price resistance, it's been a pleasant finding," Holstein said. "It's the emotion and materials. We’re not taking a high markup, in fact, we need to get our margins up a bit. But I’m a big believer in good ingredients makes good food. We only use top tanneries and top mills, the majority of product is made in Italy, and if not, it's made here.

"Michael Kors and Ralph Lauren are expensive. Of course, they have secondary lines. Calvin Klein was expensive. But our denim offers an opening price point and we’re bringing a lot more denim into the ready-to-wear too, so I do think there is something for the aspirational customers, and we will be introducing small leather goods, so we’re going to start with that."

Holstein is adamantly against having a secondary line. "I think that's a trend of the past, the industry has shifted away from that and the potential is much more in the luxury sector for growth. When I was at J. Crew [as a design director consultant], Mickey Drexler said, ‘Don't be afraid of expensive, people love it.’ And I do think if they love something, they will find a way to get it. And there's The RealReal now, and a lot of other [resellers] that make things more attainable."

Khaite plans to open 10 retail locations in the next five years, both international and domestic. L.A. will likely be next. "It's interesting what's going on at Palisades Village with Saint Laurent and Bottega Veneta opening," she said of Rick Caruso's open-air shopping center in the tony West Side enclave.

Although rumors have been flying that the brand has been talking to would-be investors, including LVMH Moët Hennessy Louis Vuitton, or even contemplating a sale, Holstein said there was nothing to report.

"We’re having a lot of exciting conversations, and we’re still partners with Assembled Brands," she said of the venture capital firm led by chief executive officer Adam Pritzker.

Khaite has experienced triple-digit growth year-over-year. "If somebody told me we’d been here in 2023 when we launched in 2016 revenue-wise, I’d never believe them," she said, of crossing the $100 million mark.

Wholesale is 65 percent of sales, including global players Net-a-porter, Mytheresa, Matchesfashion and Moda Operandi, and stores Bergdorf Goodman, Bon Marché, Harrods and Saks.

Direct-to-consumer e-commerce is 35 percent of the business. "There was a trend to go after e-com, but with everything going on with tech, the trend has switched to a more aggressive retail strategy, which is much more profitable," she said. "People are back in stores, they want experiences, they want to interact."

Since launching in 2019, shoes as a category have gained a large market share, representing 20 percent of the business, with the Dallas and Davis boots the top sellers. "They are so comfortable, and I can attest to this, they mold to the foot. I could walk around in them all day, and they have a little heel that gives you the lift and the spirit," she said.

Handbag sales have doubled, with the August and Olivia sling bags being newer offerings; cashmere remains key (Holstein's career started in knitwear at Gap); and leather and other outerwear are now more than 10 percent of sales.

Launching in stores Monday is the brand's first eyewear, in collaboration with Oliver Peoples.

"It's two years in the making," she said of the three styles — the 1969 in a stylized oval silhouette, the 1971 combining angles and curves, and the 1983 with a shallower angular profile.

The brand will launch several more collaborations this year, she hinted.

As Holstein prepares for her fall 2023 show on Sunday (and maternity leave straight after), she feels more confident than ever.

"I don't work on collections in terms of concepts or looks; the way we work is very garment-based. And I realize after it's done what I was thinking about," she said. "As we’ve been styling this, I realized I have had a lot of shifts this year…I feel like it's definitely a new chapter for me.

"I think a lot of it is having a baby and becoming a mother. The business is getting much bigger with this new arena of revenue that puts you in a different category. I’m leaving startup world. I feel stronger, I feel powerful in my own life."

The CFDA honor was another milestone. "It was wild..and I felt like a real buffoon. You look out and see Cher, Lenny Kravitz and Bradley Cooper, and it was like ‘hiiiii!’ I had no speech because I didn't think I was going to win. I walked out of the house with wet hair, no makeup, threw on a dress 10 minutes before, because I’m used to not winning anything, it's sad but true," she laughed.

"When they announced my name, I dropped, I fumbled my words. But the amount of flowers and congratulations, I was so overwhelmed. It was amazing to feel the community that way. Ralph Lauren wrote me a card, that was the biggest wow moment."

What did he say to the new American brand builder?

"He said, ‘Congrats on your award, your expertise in your craft is celebrated by the industry and beyond,'" she recalled. "I love Ralph. There is no bigger icon in American fashion. I’m such an admirer of what he built probably more than anyone. There's no better branding person."

She does have one regret from that night.

"I wish I’d thanked my husband. I got to thank Vanessa [Traina]. It's really her and I, at least I got that out."

Holstein calls Traina her muse, and the two have collaborated on Khaite from the start.

"Vanessa brings her eye, it's so unrivaled and refined, she knows back-of-house how something will look on camera, she sees every detail, she's very precise. And she's not unafraid to take risks."

They met 20 years ago in the orientation line at Parsons. "She was still in high school, dropping her sister Victoria off, and we all became friends. The rest is history."

Another New York story.

"I didn't want to come to New York, I wanted to go to a big school and have an American experience, which seemed like such a fantasy growing up in London," the designer remembered. "Then I moved to San Diego senior year very suddenly, and realized it wasn't what I wanted at all. Because I got that in high school. I realized New York was the only place I could be in America.

"I am a big believer that the universe has a plan…if you believe in yourself, take risks and work hard," she said. "However, I’m lucky enough to say that, too. It's a privileged place."