Catherine Curan
03/01/2007
High above Fifth Avenue during last September’s Olympus Fashion Week, New York’s hottest young DJ trio skulked in the corner of an airy showroom as models paraded about in Tory Burch’s spring 2007 collection. Burch’s young sons dashed around the room, snapping pictures of the models with their cell phone cameras, while her friends, denizens of New York’s social circuit, smiled for the professional paparazzi.
TOP VIEW |
An observer walked up to Tory Burch and told her how good her
clothes looked. "Do you think so?" she asked.
Burch’s reply reflects more than just a fashion designer’s
typical new- collection nerves—because she is hardly a typical fashion designer.
Burch has no formal design or business training, and launched her career only
three years ago when she opened a Manhattan boutique after working for several
fashion firms, including in public relations for Vera Wang. Burch’s
hippie-inspired tunic tops resonated with consumers, including Oprah Winfrey. In
2005, the talk show queen dubbed her line fashion’s next big thing, giving Burch
a boost most new entrepreneurs can only dream of.
Burch is one of a vanguard of socially prominent women trying
to create viable businesses in America’s notoriously catty, competitive fashion
capital. Susan Dell, wife of the mail-order computer kingpin, launched a women’s
line called Phi in 2004 with a New York runway show; her collection currently
sells in 35 locations around the world. Cece Cord, who worked at her ex-husband
Barry Kieselstein-Cord’s jewelry company during their 23-year marriage, markets
pet accessories inspired by her miniature Yorkshire terrier, Tiger, and luxury
handbags for women. She says that she hates the word "socialite" with a "purple
passion," but admits that being photographed at parties with friends like Muffie
Potter Aston generates helpful publicity for her eponymous line of women’s
bags.
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SUSAN DELL (left) teamed up with Julia Hansen to promote her line, Phi. Fashion design was not a dalliance of Dell; |
Other prominent women, including sisters Paris and Nicky Hilton (see "Celebrities in Fashion,") and New York society favorite Tinsley Mortimer, are also dipping their toes in this business. Last year, Mortimer lent her name to a line of handbags to Japanese firm Samantha Thavasa. In case potential customers were unaware of Mortimer’s social status, she named individual styles after her prominent friends Dabney Mercer, Fabiola Beracasa and Lauren Davis, according to a report in the fashion newspaper WWD.
Eager to be perceived as serious entrepreneurs, Burch, Dell and Cord are taking steps to create enduring companies. Burch and Dell hired fashion industry veterans to run their operations and assembled design staffs to craft collections. Cord turned to a larger partner for capital and infrastructure, signing a long-term licensing agreement with leather maker G-III Apparel Group. All three ventures have small budgets; their backers say they want their designs, not splashy marketing campaigns, to attract customers.
"Many probably expected that we would buy our way into the market with sizeable ad campaigns," says Dell, who serves as chairman of her firm. But she insists that she keeps a tight rein on business expenses. "It’s really important to me that this business is managed just like any other entrepreneurial start-up," she says. "We make hard decisions on where to spend our budget every day, which forces us to grow the opportunity organically."
Unlike most neophyte fashion designers, however, these women can save money on marketing because they reap plenty of free publicity thanks to their social prominence. Dell’s personal wealth also provides her with the luxury of creating a business plan that gives Phi six years to reach profitability. “Obviously they don’t need Phi to pay their light bills at home,” says Julia Hansen, the company’s CEO and president.Dernier CRI Dilettantes
Yet even with significant funds and boldface monikers, these
women are finding that building a profitable fashion house presents infinite
challenges. Creating a signature design—Burch was inspired by a 1960s tunic she
found in a French flea market—is only the first step. After making samples, a
designer must convince buyers to write orders, and then find a way to actually
deliver the merchandise to the stores. The final product must match the quality
of the samples and reach the selling floor on time, and at the expected price.
Even well-funded small firms find it difficult to attract attention from factory
owners who can make money more easily on massive orders from larger design
companies. "Production is the hardest part," says Jeffrey Kapelman, principal of
Hilldun, which provides factoring (a form of financing) services to small
fashion designers. "Getting attention is important, but it’s not going to amount
to anything if the product isn’t really good."
Dell, an outsider from Austin, Tex., has found the New York scene less welcoming. Her CEO, Hansen, previously worked at Zoot Sports, an athletic apparel firm, and Levi Strauss before teaming with Dell in 2003. In her former jobs, she enjoyed what she calls a healthy level of competition between her employers and rivals such as Adidas. Hansen expected to find the same atmosphere in Manhattan among the companies she considered her new peers. Instead, she has been surprised by a chilly reception to her outreach efforts. "In some cases they’ve been cordial, and in a lot of cases they haven’t," she explains. "Seventh Avenue really doesn’t have to be so catty; I would never close my door to somebody reaching out to me."
Phi represents the culmination of Dell’s lifelong passion for clothes. She studied fashion at Arizona State University, and launched an eponymous collection in 1999. Yet she struggled to find a winning formula, tinkering with her namesake brand under designers Ellen Enders and Steven Slowik before scrapping it altogether. Dell, a competitive amateur athlete, met Hansen on the elite triathlon circuit and recruited her as president and CEO to help rebuild the company. Realizing they needed a new label, Hansen drew on her branding experience at Levi Strauss.
Hansen has assembled a team and built a corporate structure. She recruited Andreas Melbostad, a former design director at Donna Karan and Calvin Klein, as creative director. She also moved the company’s headquarters from a Seventh Avenue office spread over several floors to a Meatpacking District studio where 24 employees, from the CEO to the sewing team, share an open space. With Hansen and Melbostad now in place, Dell rarely visits the office. Instead, she keeps in touch via email and phone.
Fashion Houses Divided
Both Burch and Cord began their businesses in their Manhattan
apartments, but soon realized they needed to create a real corporate
infrastructure. Burch received help from her ex-husband in setting up
manufacturing processes and an office in Asia—he had once run an apparel company
that produced goods in China. But she lacked a warehouse, or even a sense of how
much fabric to order; at one point she found herself surrounded by bolts of
fabric.
Burch sought to recruit a president during her first year in business, initially approaching DKNY’s Mary Wang. But in March 2005, after Wang had opted to stay with Donna Karan, Burch hired Brigitte Kleine, former president of the women’s collection at Michael Kors. Kleine helped Burch assemble a five-person design team and manage growth. Kleine says she took the leap from an established firm to a start-up because she saw real potential in Burch and her brand. "She had been known for the tunic, but I was also impressed when I saw the breadth of the collection," Kleine says.
By hiring Kleine and building an infrastructure, Burch created a platform for future growth. Her clothes are now sold in some 250 locations across the U.S., as well as at Harvey Nichols in London and Dubai. Burch’s designs debuted at four Bloomingdale’s locations last fall and were among the best sellers in their department, according to Frank Doroff, senior executive vice president of ready-to-wear. Kleine says the brand has sell-throughs (the amount of merchandise sold at full price) of 60 percent and higher in an industry where anything better than 50 percent is considered good. Burch owns six freestanding stores and expects to open three each year over the next five years. She now produces everything from swimwear and candles to shoes. Last year, she sold 90,000 pairs of $195 ballet flats, adorned with her logo, within three months of their launch.
Not all of her plans are unfolding smoothly, however. After the breakup of her marriage, she and her ex-husband are still trying to determine his role in the firm.
Cord also enjoyed rapid growth after spending less than $100,000 to develop a few samples of Travels with Tiger accessories. She wooed business by serving home-baked banana bread to leading retailers, including Neiman Marcus president Burt Tanksy, who viewed the collection at her home. Filling orders, however, required her to ship boxes of merchandise from her doorman building. To avoid inconveniencing her neighbors, Cord hired a driver and made deliveries in the middle of the night in an oversize van.
When this approach became unbearable, she decided to partner with leather house G-III, whose executives contacted her. In 2004, Cord signed a long-term deal with the company, which is better known for low-budget football jackets. "I was able to expand and grow," Cord says. "I never could have filled those orders out of my house; I would have been thrown out."
But, like Burch, today Cord is sorting out how best to untangle her business partnership. Now she calls her pairing with G-III a mismatch, and plans to part ways and strike an agreement with a company that has luxury market experience.
Dell, too, faces challenges. Three years after its launch, her brand has won some fans, but Phi remains hamstrung by extremely limited distribution, and is largely unknown outside the fashion cognoscenti. Hansen says that ditching the founder’s famous last name shifted the focus to Phi’s designs rather than simply exploiting Dell’s name. But she says she must work harder to make consumers more aware of the brand.
Cord likes to attend the Carolina Herrera and Bill Blass fashion shows in New York; Burch caught Valentino in Paris last fall. Such invitations place them firmly in fashion’s inner circle, leaving many to wonder why they bother managing their own brands. They respond that, beyond the potential for financial rewards, doing so gives them a creative outlet. It also provides them with the simple gratification of participating in the workforce. "Most of these women don’t like to be regarded as socialites," says David Patrick Columbia of Newyorksocialdiary.com, a blog that tracks the city’s social scene. "Once they get into business, they’re businesswomen. They like the idea of having something to do; it justifies their existence in another way."
Catherine Curan is a senior correspondent for Worth.
Additional Information
Celebrities in Fashion