Everlane, a social-thinking clothing company, needed to open brick-and-mortar stores because "basically" no online companies are profitable, CEO Michael Preysman told CNBC's Jim Cramer.
Preysman, who founded Everlane in 2011, commented on the host "Mad Money" from the company's brand new store in Williamsburg, a hip neighborhood in Brooklyn, New York.
"Which online company is really profitable? Basically, none of them. It's this fucking secret," Preysman said in an interview sent on Thursday.
But the situation has evolved for Everlane as the company matures. In addition to its new Brooklyn store, it has a store in Manhattan, Los Angeles and San Francisco.
Preysman said the idea that running an online store for clothing stores is more cost effective because avoiding high rent payments doesn't really check out.
"Everyone loves to say you don't spend money online, but things like that now work with Facebook, Instagram, and how much you can get a customer, then you have to send everything," Preysman explained.
Beyond that, Preysman said the key to succeeding in today's turbulent retail landscape is to meet the customer where they are.
"When retailing, when we first go to the customer, we find out which channel is right and do the right thing for the customer and be profitable," he said.
Everlane has built a name in the fashion industry for its emphasis on transparency. The website not only shows the factory the product was made in, but it also shows the cost of materials, labor and transportation. It gives customers a look at the selection for each item.
"It is quite difficult to run a business that way, but we tell you everything," Preysman said.
"People know that we have to make money at the end of the day, and they feel good about supporting someone who doesn't rip them off because they trust us," Preysman added.
Cramer also pressed Preysman on Everlane's decision to offer a 365-day warranty on his "Uniform" line. If something happens to one of the 12 "Uniform" items, Everlane will replace it fully.
Cramer said when he heard about it, he thought "they're going to get dressed."
"We did all the tests. Fifty washes. We did stretch testing, color fastness, because things were going to last," Preysman said.