Something Navy, the beleaguered apparel company founded by the fashion influencer Arielle Charnas, is struggling to survive. Its CEO is leaving the company, most employees have either quit or been laid off, and production of new clothing is on hold, several people told Insider.
The brand, which Charnas launched in 2020, has been in trouble for months. An Insider investigation published in December found that the company was experiencing financial difficulties due to lackluster sales. Associates said factories were refusing to send new product until they got paid, and nearly half the staff left last year.
The impending departure of the CEO, Matt Scanlan, whom Charnas tapped to lead her company in 2019, follows months of tension between Scanlan and Charnas, a recently departed employee who worked closely with the C-suite said. Several people told Insider last year that Charnas was furious with Scanlan for keeping her in the dark about the company’s struggles.
Since Insider’s investigation was published, Something Navy has closed two of its stores and halted production of this year’s clothing collections. Shipments to customers from the company’s New Jersey warehouse have again been placed on hold for the past month, according to someone familiar with the business relationship. At least 14 more employees have quit or been laid off, leaving a skeleton crew.
Meanwhile, a credit report from the business-analytics company Dun & Bradstreet this week described “significant stability and payment behavior concerns” for Something Navy over the next year and gave the company a maximum credit recommendation of $2,500, down from $9,000 in December.
Even a casual observer could see that something is amiss at Something Navy: The company has published only one Instagram post in the past two months, and a note on the website apologizes for “longer than usual order processing times.”
Charnas herself barely mentioned the brand this year until early June, when the 36-year-old made a brief, vague statement on her personal Instagram about the company’s “mini hiatus.”
“I know a lot of you have been asking about what is happening at the moment with @somethingnavy and rightfully so!” Charnas wrote. “The brand has been in the process of bringing in a whole new management team to run the company. A lot of changes had to be made so that it can be the best brand that it can be. This mini hiatus is part of that.”
Around the same time, Scanlan, who’s also the CEO and cofounder of the cashmere company Naadam, quietly removed Something Navy from his LinkedIn profile.
“Matt has weathered the macroeconomic storm that has hit essentially everyone in the women’s ready-to-wear field over the last 24 months to keep Something Navy and Naadam afloat,” Scanlan’s spokesperson told Insider. “Regardless of these industrywide challenges, he still believes Something Navy will be a success no matter what composition it takes down the road. In the meantime, he’s focused on Naadam and the larger brand opportunities amidst these industry shifts, with a continued focus on profitability.”
Charnas and Something Navy didn’t respond to requests for comment.
Tensions between Charnas and Scanlan have been flaring for months.
Charnas started Something Navy as a fashion blog in 2011 before launching the clothing brand in 2020. She was the creative face of the brand, relying on Scanlan to run the business side, former employees told Insider last year.
But for the past several months, Charnas hasn’t been on speaking terms with the CEO, said the recently departed Something Navy employee who worked closely with the C-suite.
“She’s very upset,” this person said. He added that Charnas’ strength was in the creative and marketing side and that she trusted Scanlan to handle the business side. “I don’t think she was getting the full story,” he said.
Last year, at least 22 staffers left the company; several of these former employees told Insider they’d lost faith in the business. Some said Something Navy was constantly late in paying suppliers, freelancers, and models. One India-based supplier said Something Navy was months late in paying him for $364,000 worth of merchandise and only paid after Insider began contacting people for the December story. Some factories that Something Navy worked with were refusing to ship any more products to the company until they received payment.
“Matt was adamant that no one could talk to Arielle or her husband, Brandon, about the performance of the business,” one former high-ranking team member said last year. “If she ever asked about something, you had to say it was amazing, that everyone loved it. The brand was great. Sales were great.”
Two people close to the company said last year that Charnas was devastated when she found out about the company’s struggles in the spring of 2022. “If she would’ve known what was really going on, I think she would’ve done things differently,” the recently departed employee close to the C-suite said.
But a person close to the company said Charnas and her husband were well aware of the business’ health. The person said that Charnas opted not to renew Scanlan’s contract when it expired in 2021 and that he’d been the acting CEO since then. That Charnas “would now feign ignorance about Something Navy’s financials is, well, rich,” the person said. “Arielle’s obsession with her public image has constantly forced her to play the victim.”
As her company nosedives, Charnas continues to broadcast her lavish lifestyle on social media, sharing links to a $2,000 sweater she wore to a Pilates class and $890 sandals she wore in the Hamptons. In December, employees complained to Insider about Charnas’ lack of involvement, saying she was “checked out.” She appears to remain uninvolved.
An employee who recently left Something Navy said people were miffed that Charnas couldn’t even be bothered to email the laid-off employees. “If it were me being a founder, I would actually have announced it,” the employee said. But she added that people got “nothing, zero.”
“I feel like she doesn’t even care,” she said.
When the Something Navy clothing brand was announced in 2019, it had all the trappings of a hot new company.
Charnas, then 32, was one of the first fashion bloggers, and her business was backed by big-name investors like the Hong Kong billionaire Silas Chou and the Rent the Runway cofounder Jenny Fleiss. Something Navy was folded into Scanlan’s holding company, Naadam Collective, which comprises six direct-to-consumer brands including Package Free and Ivory Ella. Charnas retained a 43% ownership stake in her company, according to a screenshot of internal Something Navy software viewed by Insider. Something Navy’s first collection launched in July 2020 and sold $1 million worth of merchandise in the first 30 minutes, the company said at the time. In its first year of business, the company said, it brought in $32 million in revenue.
But it couldn’t keep up the momentum. From 2021 to 2022, the company’s gross sales dropped by 22%. A former employee of Leap, the retail startup Something Navy partnered with to finance its stores, said Something Navy recently closed its Upper East Side and Los Angeles stores because sales were “dropping month over month.” Sales reports Insider viewed last year showed that Something Navy’s most popular styles were selling only a handful of units in its stores weekly.
“In terms of all the brands we had, they were definitely the one that was falling apart the quickest,” the former Leap employee said. (Leap, which helps e-commerce brands open brick-and-mortar stores by covering most of the up-front costs, also works with brands including the womenswear brand M.M.LaFleur and the jewelry company Ring Concierge.)
A Leap representative declined to comment on plans for Something Navy’s remaining two stores, in New York’s West Village and in Newport Beach, California.
Things at Something Navy have gotten so bad that the company had to cancel production of its spring 2023 and fall 2023 collections, the recently departed employee who worked closely with the C-suite said.
“They’re basically repurposing stuff they have in stock from one to two years ago,” he said. “Take down from the site and then reposting it, restyling it. Trying to make it relevant again.”
With no new styles to offer, Something Navy lost wholesale partnerships with retailers including Shopbop and Nordstrom, the former employee said. A Nordstrom representative confirmed it no longer carries the brand. Shopbop declined to comment, but its website showed only six items available for Something Navy, all of which were marked down by at least 40%.
In the first quarter of this year, Something Navy was so tight on cash that it couldn’t even fulfill all its orders: Its New Jersey warehouse, Outerspace, refused to ship any orders for several weeks after Something Navy fell behind on payments, two people familiar with the business partnership said. Shipments are once again on hold after Something Navy told the warehouse it was figuring out its next steps as a brand, one of the people said.
It’s down to stuff like, here’s a $1,000 expense, and they’re like, ‘Can we pay in four weeks?’
Something Navy continues to have trouble paying its suppliers and vendors.
“It’s down to stuff like, here’s a $1,000 expense, and they’re like, ‘Can we pay in four weeks?'” the former employee who worked with the C-suite said. “They are making payroll, but they’re being incredibly slow to pay anyone else.”
Last fall, Something Navy hired Betty Wang as president to focus on the brand’s “opportunities for growth,” but former employees told Insider in December that Wang’s hiring was viewed as “Matt’s Band-Aid” and came too late.
Scanlan’s business troubles extend beyond Something Navy. After cofounding Naadam in 2013, Scanlan acquired four other brands under the umbrella of the Naadam Collective: the fashion brand Thakoon, the women’s clothing brand Ivory Ella, the sustainable-packaging company Package Free, and the apparel company United by Blue. Since December, at least 30 employees (including those at Something Navy) have been laid off across the portfolio of brands, two recently departed staffers said. In early June, United by Blue announced on Instagram that its team was taking the month off for “Great Outdoors Month” and deleted comments from followers and vendors complaining about delayed payments. Package Free also deleted comments accusing the company of stiffing a small business out of $10,000 worth of natural body-care products. (The company’s founder told Insider that Package Free finally paid them this week after dodging them for a year.) Thakoon’s e-commerce site was deactivated; the brand’s last Instagram post was in January.
The Naadam Collective “just really overextended itself,” the recently departed employee who worked closely with the C-suite said. “Each brand needed money to shore up investments, but none were cash cows.”
I feel like she doesn’t even care.
Meanwhile, Something Navy’s headcount is dwindling.
The recently departed employees include Laura Cook, a director of finance; Michael Yeager, a vice president of sales; Elisa Giorgi, a senior director of growth marketing; and Bailey Miller, Charnas’ executive assistant. The departures have been a mix of layoffs and people quitting, recently departed staffers said.
Scanlan’s spokesperson told Insider that a sale of Something Navy was on the horizon.
“I think anyone who’s financially secure or is able to is leaving,” the recently departed employee who worked closely with the C-suite said. “When I left, people were like, ‘Get out while you can.'”
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