Eddie Borgo, Building the Business

The accessories designer is about to get a new investor to help expand the hot brand.

View Slideshow

The young man in the now-signature fedora recalls the day he realized there are two Eddie Borgos. He was in Paris, showing his fall 2011 collection in a beautiful apartment, its grand exteriors and views of the Palais Royal in lovely contrast to the youthful modernity of the interior renovation. The space made for quite an upgrade from that of his first trip, a scant three years prior. Then, he and his best friend, Jamie Rosenthal, shared a room in the Hotel Louvre Bons Enfants, “the equivalent of an American Holiday Inn, only smaller,” he says. They rose early each day to straighten up and make the bed, spread the jewelry out and then take appointments. Borgo characterizes that trip as “successful, but stressful.”

This story first appeared in the April 9, 2012 issue of WWD.  Subscribe Today.

The later trip felt far more professional, buoyed by a sense of arrival. “To be there in that apartment, to see editors and buyers from all over the world and to know that there is global recognition on that scale — that’s when it started to feel like a brand,” Borgo pinpoints. “We were selling, expanding the sales, there were stores we thought would never come to see the collection.”

In the brief, whirlwind years between those two Parisian sojourns, Eddie Borgo Collection, while still tiny by industry standards, grew considerably in size, and its profile, along with the designer’s, exponentially. The highly identifiable aesthetic — edgy elegance, a little tough, with a strong rock ’n’ roll current sprung from childhood immersion in the music of the Seventies (major fans, Mom and Dad Borgo always had something playing) — struck an immediate chord with editors, a handful of forward-thinking retailers and a savvy clientele eager for statement costume jewelry that ran counter to the prevalent hyper-girly direction. For his fall collection, Borgo took a bold industrial turn. Inspired by the work of photographer Steve Duncan, he drew from the ironworks of subterranean New York in all its moody intrigue. He thus riffed on big, audacious designs on the metal tubing, joint systems and nuts and bolts that quite literally hold the city together. The collection is now in 100 doors worldwide. Along with the original four accounts — Barneys New York, Liberty of London, Joyce and Colette — these include Bergdorf Goodman and multiple Neiman Marcus doors as well as Restir in Tokyo, Harvey Nichols in London and Hong Kong, Cocktail Me in Poznan, Poland and Hide&Seek in Singapore. The brand’s largest retail client: Net-a-Porter.

RELATED STORY: Eddie Borgo Accessories Fall 2012 >>

The realization that Eddie Borgo the person now shared his name with Eddie Borgo the brand brought on the inevitable initial thrill followed by the weight of responsibility. Conversation with the designer reveals a determined mind-set behind the gentle countenance. From the start, he has taken a measured approach to building his business — one that displays some elements of learn-as-you-go. At some point it became obvious that serious growth would require outside investment. According to Jessica Kates, incoming chief operating officer and chief financial officer, the company is close to finalizing a deal with a small venture capital firm and some angel investors that will, if all goes as expected, transfer between 20 and 25 percent of the company’s ownership. Kates has functioned as a consultant for Borgo since September and expects to be full-time by the end of this month, which should coincide more or less with the finalization of the investment deal. A search for a chief executive officer is under way.

Borgo maintains that turning profitable as a very young business made the company attractive. “I think where [we] started to look, for lack of a better word, ‘sexy’ to an investor,” he says, “is the fact that we have multiple revenue streams, and all of those revenue streams are already lucrative.” Some come from a private label division, conceived and launched in concert with Randy Britton. Borgo and Britton have been equal partners in the private label part of the business, with Borgo retaining full ownership of his trademark. Upon completion of the investment deal, Britton will exit the company via an amicable buyout and the investors will assume minority of the entire company, including the trademark.

The Eddie Borgo brand launched, to use an irritating but sometimes accurate word, organically. After studying art foundation and costume theory in Virginia and Atlanta, Borgo moved to New York in 1998. Here he took classes at Hunter and found his way into the kind of jobs typical of the fashion-obsessed, at Barneys, in the visuals department of Donna Karan and at the accessories firm Noir. Along the way, he dabbled in styling, making his first jewelry when a friend asked him to come up with some runway pieces for a Diesel Style Lab show. Soon after, the editorial requests started coming, and a new future opened up. Then Phillip Lim asked him to do the jewelry for his spring 2009 collection, and soon, Pamela Love, in a collaboration for Marchesa. Borgo has subsequently worked with Joseph Altuzarra, Jason Wu and Jen Kao. He has only raves for all.

The jobs for Lim and Marchesa provided funds that became the foundation for the Eddie Borgo Collection. At about the same time, Borgo reconnected with Britton, with whom he’d worked at Noir, and a third partner no longer in the picture. The three came up with the idea for an operation that would design and produce costume jewelry for private label clients. Borgo became the face of the company, with the intention that private label would ultimately help fund his collection business. The partners settled on the name Outhouse to emphasize, Borgo says, the idea of “out-of-house design development and through to production, shipping, carding, ticketing, testing — all of that. ” The division, soon to be renamed, simply, Private Label, has broadened to offer licensing and consulting.

Private label clients, present and past, include numerous major fashion brands and big-name vertical retailers, many of whom Borgo is contractually prohibited from revealing. Current clients he can confirm are White House|Black Market and Ann Taylor, the latter a consultancy that turned into a private label situation. Past clients include J. Crew, a relationship forged during the 2010 CFDA/Vogue Fashion Fund process, and Banana Republic. Borgo maintains he has no difficulty diversifying the projects of multiple clients. “[Our role] is to design special programs that speak to their customer from a designer [perspective]. I think that’s a strength of mine,” he says. “I can move from space to space and get inspired through the language of these different companies.…A lot of private label businesses aren’t design-driven companies; they aren’t design-focused.”

Borgo approaches the private label process much as he does his own collection. He begins with “platform” pieces that “speak the language of the collection, show the inspiration, show the influence. Then we delineate down from that. We start by category. We go necklace, bracelet, earring, ring. And then we figure out all the different price points within each category. There are lots of things that inform that design process.”

One such item is the inevitable “love-hate relationship between the design divisions of these large companies and the merchants.” Rather than stomp petulantly into a purist’s ivory tower, Borgo understands the necessity of balance, a realization that took time to develop. “It can’t always be design-driven,” he acknowledges. “That’s not the way of the world.” Even with his signature collection, small, upscale and fashion-driven as it is, certain business realities have taken hold. “It took me a long time to understand and want to understand, to be honest. But I do now. Our buyers love and enjoy the editorial things that we do. But there’s also a bottom line.”

Borgo credits Maureen Chiquet, Chanel’s global ceo and his mentor through the CFDA/Vogue Fashion Fund, with facilitating that epiphany. As last year’s runner-up, he received $100,000; soon thereafter, he secured an additional $100,000 as a recipient of the Vogue Tiffany Grant. (He also garnered the 2011 CFDA Swarovski Award for Accessory Design.) Chiquet oversaw an in-depth analysis of every level of the Borgo business. Along the way, the designer says, “we identified pieces that we feel make up the fabric of the Eddie Borgo brand.” These became a formal entity, called Core, which will comprise a constant backdrop to the seasonal fashion-forward collections. Stock will be readily available and never marked down. Core accounts for 70 percent of annual sales with sell-throughs of a whopping 85 percent. Now at about 50 pieces, the range will expand as potential classics emerge from the seasonal collections. “The idea is to grow that Core business, invest in it, create more silhouettes, take those ideas that are part of a larger collection, capitalize on them and figure out ways to make one piece an entire grouping of jewelry,” he says. “If we know [a concept] sells as a bracelet, why haven’t we made studs and chandelier earrings and a necklace and a smaller bracelet and a ring with that silhouette and with that group? That was Maureen’s idea.”

Chiquet found Borgo “smart and ambitious with a real vision for his business. He has an incredible curiosity and hunger to learn about everything — from manufacturing to supply chain to sales to finance to management,” she offers via e-mail. She was impressed with his designs as well as his interest in the managerial side his business model, “the idea of having a high-end brand under his name, Eddie Borgo, funded by his design service, Outhouse.” (Since adopting that model, the Eddie Borgo Collection has become profitable on its own). His greatest challenges, Chiquet says, will lie in “generating enough cash flow to manufacture his products in time to meet growing demand.…It is also a huge challenge to find the right suppliers who understand his quality and design specifications. And of course, he has organizational challenges in hiring and grooming the right talent to keep up with his business growth.”

Regarding Chiquet’s last point, the hunt is on. The company currently employs only eight people, including Borgo. Studio Director Beitressa Mandelbaum has become his right hand in the business, involved in all aspects from design to sales and press strategy. Designer Nathaniel Deverich works with Borgo on the signature line; assistant designer Helen Kim, on Private Label. In addition to a new ceo, the company will make several senior hires within the next year, specifically in the areas of sales and production. “There is such strong demand for his designs and his business has grown fast, so the future will largely depend on finding the right partners, building the right team, securing his sourcing base,” Chiquet writes.

With profits from Core, Borgo expects to launch a fine jewelry collection, probably in 2014. He envisions an audacity not often found in that market, “taking elements from the street, from New York, things that we consider not luxurious and making them luxurious. I would love for everything to be very mechanical, very Industrial Age.”

E-commerce is another area primed for growth. The Eddie Borgo Web site now accounts for about 10 percent of total revenue while being all but ignored in-house, according to Kates. “It’s just sort of there. People who are looking to buy Eddie Borgo products online go there on their own,” she says. “Once we make an investment in that, polish it up a little bit and sort of relaunch it in a more professional way, I think it could easily get up to four times the current size in the next two years.”

Yet the brand is not forsaking the ways of old. Also on the agenda: the opening of the brand’s first brick-and-mortar store — or two — in New York, probably by the end of next year. Borgo loves the West Side between 14th and 20th Streets; Kates cites SoHo as also “in sync with our customer base,” but notes as well the possibility of an uptown counterpoint, likely Madison Avenue. “The nice thing about jewelry,” Borgo offers, “is you don’t need much real estate.”

He knows whereof he speaks. Until recently, the Borgo staff worked in a tiny, 250-square-foot space on West 35th Street, relocating in December to what now seems a palatial 2,600 square feet on Elizabeth Street. Borgo describes the building, anchored by the restaurant Public on the first floor, as “very grand and sturdy.” The decor: stripped down and raw, in homage to its past as an early 1900s electrical plant.

As for marketing, the Eddie Borgo Collection was sprung quite literally from editorial interest and remains a favorite resource of the genre. Which makes sense; the line and its designer radiate cool. It’s thus a little surprising that unlike so many other designers, Borgo is not obsessed with social media; his brand has a Twitter account but no Facebook or Tumblr. Its primary marketing efforts center on a viral campaign, the brainchild of house stylist Keegan Singh, who’s also Borgo’s boyfriend, that each season features a woman involved in fashion. Cecilia Dean did the honors for spring, following, among others, Lauren Santo Domingo, Tabitha Simmons and Vanessa Traina. “We print [it] as a poster and send it to our retail and editorial supporters — this is our form of social media,” says Borgo.

Though the Eddie Borgo business plan that was pitched to investors has changed considerably since it was drawn up last year, its five-year projections have not. In 2011, the company hit its target of 33 percent revenue increases over 2010; this year’s projection is a 59 percent increase, followed by projected increases no lower than 44 percent as Core continues to grow.

Despite his penchant for concrete projections, Borgo volunteers that he may never achieve his final goal. “It’s so difficult to get your head around [the concept of success], almost an impossibility,” he says. “Success comes in waves, and it’s never-ending. You have to create short-term and long-term goals, and when you achieve those goals you can’t stop and say, ‘This is it; we’ve achieved this goal.’ You do a little cheer, you keep on moving, and a new goal surfaces.”


View Slideshow