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Getting Started: Handbags
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September 10, 2001: 6:30 a.m. ET
Successful accessories businesses start with unique designs
By Hope Hamashige
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NEW YORK (CNNfn) - Every year -- make that every season -- the fashion elite makes its declarations: Gray is the new black. Plaid is so over. Drop that oversized tote like a nasty habit! This season's all about the clutch!
Fashion really is fickle. And trying to stay one step ahead of the fads, assessing the wildly-shifting winds of fashion taste, may be next to impossible.
So when Melinda Gomez launched her two-year-old handbag company, Corem Rose, she decided not even to try.
"We make things that we think are beautiful," said the Park City, Utah-based designer.
An unexpected success
Gomez, a former model, designed her first bag as a gift for a friend. She received help in crafting the bag from another friend who was looking to change professions. The end product, she said, was so beautiful that it was hard to part with.
"I thought to myself that if I saw this bag in Barneys I would definitely buy it," she said.
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Corem Rose bag of fresh water pearls, Mabé pearls and 14K gold on Versace print silk. Approximate price: $1,425. | |
When Gomez's friend decided not to make the leap into the handbag business, Gomez made a decision to go it alone. With about $30,000 that she had stashed away, she started making hand-made bags in her home.
Fashion Institute of Technology professor Ellen Goldstein said that most accessory designers start at home. Getting started requires creativity above all. Some original designs and about $50,000 for materials and an industrial sewing machine are usually enough to get going, she said.
Like many a budding designer, Gomez made her first sales by taking samples of her work to boutiques that she knew drew discriminating shoppers. She considered it a test – if these people would buy her bags, she just might have a business on her hands.
Looking back now, Gomez said her most lucrative marketing tool in the short life of her business has been shrewd placement. Gomez got her bags into stores known to carry unique items with high-profile clientele.
Her first stop was Marissa's in Naples, Fla., where Gomez lives part of the year. The owner bought 12 bags right away for between $500 and $750 apiece. Of the dozen, eight sailed out of the store in the first three days on the shelf.
The first step in making a successful accessories business, Goldstein said, is to make something truly different that will catch the eye of fashion reps and merchandise buyers in boutiques.
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Corem Rose bag with rose quartz and fresh water pearls on cream leather. Approximate price: $1,000. | |
"There is tremendous competition," said Goldstein. "Unless you find a niche it is really going to be an uphill climb."
Gomez's line of ultra-feminine handmade handbags combine luxurious fabrics with crystals and stones. These exceptionally pretty bags are much more akin to fashion accessories than utilitarian purses and were different enough to catch the eye of both buyers and a fashion rep who now helps Corem Rose bags get shelf space at boutiques and department stores.
Her rep also displays her work in showrooms in New York and Los Angeles where buyers shop for new merchandise. Her bags can now be found at about a dozen stores across the U.S. including Barneys, Takashimaya and Stanley Korshak in Dallas.
Gomez also got a big break when, just a few months after starting out, she met a celebrity stylist who had seen her bags at a boutique on Sunset Blvd. That year, four of her bags found their way into the hands of celebs at the Academy Awards. Since then, dozens of models and actresses including Tyra Banks, Jenna Elfman, Sharon Stone and Cameron Diaz have all been photographed with their Corem Rose handbags.
Growth can be hard to manage
So much attention early on, although it seems ideal, can also be difficult for a young designer just starting out, Goldstein said. Managing the growth of an accessories business is one of the biggest challenges because it entails raising a lot of money and possibly moving the operation overseas.
"When that one buyer finds you and instead of saying I would like two of those bags they say they'd like two gross," explained Goldstein, "at that point, you have to make a decision about whether or not you are ready to make that step."
Goldstein said any designer who wants to ramp up the business should establish ties with a bank and a manufacturer long before the big order comes in. Kate Spade, one of the trend-setting designers of the 1990s, financed the growth of her handbag empire with venture capital.
Gomez said she has already been approached by venture capitalists who want to help her produce the bags on a much larger scale. For now, however, her plans are to keep the company relatively small and to keep making the clutches and evening bags by hand.
Gomez now has eight full-time and two part-time employees who are turning out
several hundred bags a year now. They're no longer working out of Gomez's home, but they've already grown out of the 800-square foot space they are in now.
It may seem counterintuitive, but staying small and producing fewer bags can add to the cache of the label. Coach did it in the 1970s and the strategy worked for them, Goldstein said.
"They refused additional business. They kept it small and created more demand for their product," Goldstein said. "As a result, when the rest of the market was not doing well, Coach was doing well and was very sought after."
With just two years at the helm of her own business, Gomez isn't ready to make the jump. She took in revenue of just under $100,000 her first year. And despite the downturn in the economy, and the high price tag on her handbags, she expects her revenue will triple this year.
Besides, the unique work she does sort of lends itself to the staying-small model of success.
"The reason we started was to create something for customers who go out of their way to find," said Gomez. "For now, I think it's important to keep it small and special and very creative."
-- Staff Writer Kamala Nair contributed to this report. 
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