Hubert Burda Media

Clout, With Silver Lining

For David Chu, keeping reins on a luxury company is like riding a chariot with 15 different horses.

Clout, With Silver Lining

In person, David Chu is a sharp, spritely man who looks way too robust for someone who turns 60 this year.
Perhaps this is typical of a relentless man, with a hundred different ideas on how to grow the century-old silver luxury marque Georg Jensen, of which he does triple duty as CEO, co-chairman and chief design director.
In his signature Sun Yat-sen tortoise shell glasses (“I designed it myself”) and a booming voice certain to command any Broadway stage, the charismatic businessman has come a long way since he attended the Fashion Institute of Technology, where, he says, he was “a very good student”.
“I partied every day: Thursday, Friday, Saturday, Sunday...” he recalls. “I thought fashion design was about sketching; I fell off my chair when they told me I needed to make actual clothes for an entire collection to graduate. At the time, I didn't even know how a sewing machine looked like.”
Thankfully, Chu graduated with enough smarts to form the successful apparel company Nautica and in 2003, in what must be one of fashion's grandest fairy-tale endings, sold it for US$585.6 million to VF Corporation.
Just when you thought retirement was in the books, Chu spearheaded several new businesses with commendable success before hitting another stride in 2012, when Investcorp came knocking, asking him to team up on a $140 million deal to acquire Scandinavian luxury retailer Georg Jensen from Danish mid-market buyout firm Axcel Management.
Annual sales turnover for the house in 2013 was $180 million worldwide and “... approaching a couple hundred million [in 2014] — we've grown relatively fast,” he says.
This is certainly one silver house approaching gold status.
You're not just the CEO of Georg Jensen but the chief creative director (CCD) too. what exactly does this double duty require of you?
When I first got involved with the brand, my role as CCD was to oversee product development. The hollowware, the jewellery and all the stuff they've made have such tremendous authenticity and longevity, so for me, my goal and role was to take things up to the next level. But after getting involved with the company, we realised that operational and strategic issues also had to be ironed out. That's why the board asked me to step up as CEO and oversee the entire transformation; because the creative direction that I would have steered as CCD had to be aligned with the overall strategic review anyway. I think they realised that I used to do both roles [at Nautica] so they said: “If you don't mind, at least step in for the first few years to at least put the company on the right track.” That's the reason why I agreed to take on the responsibilities.
You've also invested into the brand. How did that come about?
I never make any decision without putting my money where my mouth is. In fact, I put my money next to it! When they called me, they needed someone who really understood the brand and of course, when they heard that I was ready to commit my own capital, they got even more excited because, as you know, a capital investment reflects your commitment. So you know when I make decisions, it's totally aligned with investor interests as I'm going to be watching out for the entire company; it's my own personal investment too.
But what was it about the brand that intrigued you enough to commit at that level?
You're right. I could still be committed to the idea without putting any money in, but that'll be a different type of commitment.
I put in capital because I believe in the brand and its potential; I believe it's going to be a great investment. So I after I sold off Nautica, I became a part investor, part strategic partner and part creative director — something that I really enjoy.
But it's not as if you had a prior connection with Georg Jensen  a brand as iconic and legacy-laden as the Danish civilisation itself. So was the investment decision linked to, say, your love for home-entertaining and sterling jewellery? Or is it something bigger?
There's not a lot of companies that have this heritage and field of specialisation, and all this can be attributed to the passion of the founder. Although Jensen passed away a long time ago, he left behind a legacy that continues on through the brand's DNA. Which, after all this time, has been able to draw interest from a lot of different people — and I find that very unique. Now when I look at the brand as an investor, or as an operator, I could probably have just co-invested or simply sat on the board and not get involved so much, but I wanted to be involved. The reason is because I have never helmed a European brand before. This is a new journey for me; a completely different experience. I'd invested and been involved in a couple of American brands before but never a European one, so I was intrigued to see if I can do it too. It's like after you climb one mountain, you'll want to see if you can climb another — maybe that one will be more interesting. Every journey is different and that is what keeps life interesting.
In your illustrous career, there was only one documented failure  an export business in Taipei in the late 1970s, right after you graduated from FIT  and that was a very long time ago. After that, it was just one success after another.
Some more so than the others. I think I'm fortunate. I learned my lessons very early on. As an entrepreneur, when you first come out of college, your heart thinks you can do anything. You probably know that you can't do everything but you feel that you can. And when you fail miserably, you re-evaluate and learn from the mistakes. It's like going on a journey and ending up completely lost. You tell yourself next time, I'll be better prepared.
So with all your successes, you've amassed enough wealth to last several lifetimes. So you don't need to do this actually.
It's not about the money.
Then what is it about?
It's about doing something you enjoy. Something that gets me excited in the morning when I wake up. I did think about playing golf every day — it seemed like a good activity to retire to. But once I went hardcore into it for a few weeks, I realised it was not something I wanted to do for the rest of my life. And that made me think about looking for a new challenge.
In Georg Jensen, I have an opportunity to create value. If you're an artist, you'd want to paint the next beautiful painting or if you're a musician, you'd want to write the next best song. Truth is, you're right — I don't need to do this, but I do it because I want to do it. If I were purely an investor, I would have just pumped in a bit of capital. But it's not all about that. Yes, I don't need to work another day but I want to continue to do what I love to do.
You mentioned the previous team stumbled. What do you think you will be able to do that they could not?
When I first came to be involved, I thought to myself: This is a beautiful product but the business? It's doing just OK. Why is it only just OK? The last few managements probably didn't do such a good job. And it's really a shame. It's such a beautiful brand and it didn't have the same presence as before.
I can only learn from the issues that four different managements went through in the last 10 years before us. Making a brand amazing requires capital and good timing. What's amazing is that when I became CEO, all these former CEOs called me and told me stories of why they left. I was shocked.
What did they tell you?
They were fascinated. I'm an Asian guy who grew up in the US. But this brand is so close to the hearts of the Danish people; all these CEOs were Danish and they were so hardcore like this was their family jewel. They were most probably fascinated by how I got here. Like why do I have an interest to come to Denmark to run this brand?
It's not about nationality. When you came on-board, you did two things previous teams did not. First, you personally invested into it; Second, you acquired Danish Silver, gaining control over many of the brand's archival pieces. These are signs that this time, it's going to be different for the brand.
Thank you. When I was first introduced to the brand, it was purely home furnishings with a little bit of hollowware, which is part of the silversmithing tradition and I was very intrigued. Then I spent a little time in Copenhagen and I visited a little Danish silver shop that Greg (Gregory Pepin, now hired as Georg Jensen's managing director of silver) was running at the time. After talking to him, his analogy about silver being the soul of the brand convinced me that the Georg Jensen story needed to be told from a different angle. Upon the brand's acquisition, I hired him because he not only has the product knowledge, he knows the customer and he knows the history too. That's some of the things I will not know enough of, even if I dedicated myself to doing so for the next two years. As CEO, I have the passion for the business, but what I need to do is put together a great team to help me fully understand the product, because I believe in any consumer business — everything comes from the product.
When you grew Nautica in the 1980s and 1990s, it was slow, steady and controlled: But right now, the strategy for Georg Jensen is different, with the rebranding, new product launches (leather goods, watches, pens...), book launches and expansion plans in China. Everything seems to be happening at once.
When I created Nautica, it took about 10 years for it to explode. We gained traction the first two years, growing at double and triple [digits], and then consistently for almost 12 years. When you build a company like Nautica, you have 15 different products rising and it's like riding a chariot with 30 different horses. How do you harness that now? It's very different. Georg Jensen's moving fast because it already had 110 years of heritage. It already has a very solid foundation.
But do you think the strategy is too soon and too many? There are newer versions of the existing product lines, men's leather goods and pens launched last July and a new range of men's jewellery last October. And then there are those China plans. Do you think that you're…
…going too fast? For me, I think the speed is normal (laughs). To me, it's about launching a total style. Because for men, if they buy a ring, they'll buy the cufflinks too — if they like a certain thing, they'll probably like the whole range from the same design philosophy and so we get to reach the same customer multiple times and all at once. My job is to create that consistent design philosophy.
In terms of CSR, you have a charity office with your wife, the Gina and David Foundation. Is it still active? It's been quiet since 2012.
My wife and I are separating, so it's been kind of dormant for the time being.
I'm really sorry to hear about that. Is there a reason…
For the divorce? Sometimes, life's not perfect. I didn't expect it but in life, you can't foresee everything. We've been married 27 years then she says one day this is not the life I want. That's life.
Like it or not, you've always been known as the Nautica founder. This is the handle preceding your name that many journalists have used in the research I've done about you. Does that annoy you?
Founding a company that's very different and very successful (and in the China market as well) is an important milestone. Everyone starts out with some kind of reference point. It doesn't bother me but it's not the only thing I've done.
Does that encourage you to find a new legacy for yourself?
It's like golf. I'm not competing, or trying to be somebody else. Likewise in golf, you're really competing with yourself. If you can beat yourself, that's one of the hardest things to do, I think. As long as I'm content, I'm OK. My goal is to make Georg Jensen vibrant again. And I think it's important to put together the right team who can take it to the next level. If I can do that, then I think I would have achieved what I came here to do. I'm 59 now and with a great team, in five to seven years, I might look for something else to do.