By  on September 21, 1994

NEW YORK -- The denim market might be dominated by big companies, but there is still room for some smaller guys. Made in the Shade and BeBop, two domestic California junior denim companies, do not share the household-name status of Levi Strauss and Guess, but they have found a way to persevere and prosper.

By focusing on specialty items, fashion-forward styles and product development, these companies have managed to turn a healthy profit in a competitive arena.

Despite spending no money on advertising, the Los Angeles-based Made in the Shade is a $40 million company, producing under its name as well as making private label.

"People know about us because we've been around so long," said David Lawlor, executive vice president of the 22-year-old business. "It's through word of mouth. We started as a better denim line for young boys and juniors, and now we are primarily a junior resource."

Made in the Shade made a name "by finding niches and developing them."

"Five years ago we targeted the denim short and realized that it hadn't been promoted as a year-round business," said Lawlor. "It became almost equal to our denim jean. We moved into it early, and it exploded for us.

"Our specialty is the finishing of the garment -- that's what the whole jeans business is about," said Lawlor.

Accounts include J.C. Penney Co., under the Arizona label, Liberty House in Hawaii, Burdines, Dayton's, Wet Seal and Contempo Casuals.

"The jeans business is very cyclical, especially with juniors. We've been in business throughout the whole thing with designer jeans, so we're good at anticipating when trends will return," said Lawlor.

Lawlor reported that the denim five-pocket short category, which Made in the Shade entered five years ago, has grown in the last four years well over 300 percent. Going forward, Lawlor sees growth in military-styled and safari shorts.

"This is an item business and we really exploit an item in every possible way if we find it's the right one," he said.

Another niche the company developed is the denim vest."Over 18 months ago we made a line of denim vests, and they have become a staple like the short. We also do a lot of product development with better specialty stores to develop a style to sell only to that chain, and it has been very effective for us," Lawlor added.

The newest area for the company is corduroy. "It was a forgotten word and a forgotten fabric, and I predict it will be the primary jeans fabric over the next four years," said Lawlor. "We have positioned ourselves to take advantage of that. We did corduroy back in 1978 and we think it will come to fruition in 1995. Young people today have not known corduroy -- it's a new fabric."

The company plans to treat corduroy as it does denim -- garment dyed, silicone-finished and stonewashed.

"Corduroy was the newest thing that happened to our business for this fall," Lawlor said. "Our early corduroy program was basic jeans. Then we tested some of the fashion items at our specialty store accounts, and now they are selling better than jeans."

Specialty corduroy items include jumper dresses, overalls, shortalls, and suspender pants and will be shipped for October and November delivery.

Corduroy is more expensive than denim. A corduroy overall, for example, is $22.75 wholesale compared to a denim version for $17.75.

"I don't think it's a price-driven business. I think it's fashion," said Lawlor.

Made in the Shade's wholesale denim prices are $17.75 to $20.75 for overalls, $10 to $14.50 for shorts and $10.50 to $12.50 for vests.

Wholesale corduroy prices are $20.75 to $23.75 for overalls, $14.50 to $16.75 for jeans and $12.50 to $14.50 for shorts.

Another company making strides is BeBop, a seven-year-old Vernon, Calif., junior denim firm.

Marcus Sphatt, BeBop president, said the company's premise is fashion, quick delivery and quality, "although price has become more of an issue lately with all retailers." Sphatt said the company has not raised or lowered its prices because it's still growing.

BeBop sells to better specialty and department stores, including Wet Seal, Merry-Go-Round, Federated Department Stores, Canadians, Vogue Body Shops, Gadzooks and Margos.The firm has grown an average of 40 to 50 percent a year since it started, Sphatt said. The fastest growing division is girls.

Currently, wholesale volume is about $14 million, and Sphatt expects to do between $25 million and $30 million in 1995. The growth is based on the company's ability to set trends and its rapport with customers, said Sphatt.

This year, BeBop more than doubled its advertising budget to about $400,000, up from last year's $150,000. Its print ads will appear in Elle, Teen and Mademoiselle. In addition, the company purchased a 100,000-square-foot building in Los Angeles, about three miles from its current 30,000-square-foot site. It will relocate to the new building later this month. Sphatt said that the move was necessary to give the company more room to store fabric and to bring the equipment up to date.

"The growth we've experienced has enabled us to get more fabric, have state-of-the-art computers, better quality people and more concentration on teamwork and organization," said Sphatt.

Currently, the firm has had a lot of success with denim fashion shorts, skorts, vests and cropped jackets. Denim corsets are also booking very well, he said.

"We do special things, like a halter with elastic back or a scooped-out vest," Sphatt said. "We're adding a lot of fashion treatments for spring-like tie dye and discharge, a bleaching process that results in a print on denim, and other novelty fabrics like slub denim. Washes are also very important."

Wholesale prices range from $11 to $13 for vests, $13 to $17 for jeans, $12 to $14 for short skirts and $14 to $16 for long skirts.

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