By  on May 31, 2011

On a recent balmy May day, the offices of Dualstar Entertainment Group LLC in Manhattan’s Chelsea neighborhood were brimming with activity. Employees buzzed around the various showrooms and offices for design, development and production, and Mary-Kate and Ashley Olsen, who own the company that oversees their multimedia ventures, were presiding over a design meeting in one of the light-filled studios.

The loftlike space is the hub for the Olsens’ fashion businesses, which, in just a few years, have evolved into an impressive operation ranging from The Row designer line; the contemporary Elizabeth and James and a more casual, weekend counterpart called Textile Elizabeth and James; Olsenboye, the junior line exclusive to J.C. Penney, and, launching this July, the online, clublike, highly personalized venture called StyleMint.com.

The success of the lines has caught the attention of even the most cynical fashion types. Today, Elizabeth and James is sold in about 540 doors domestically and 160 international locations; Olsenboye is available at 600 Penney’s stores, and The Row is sold in 70 doors in the U.S. and 80 abroad. Along the way, the designers have garnered the respect of editors and retailers alike — and many consider them as viable fashion forces that couldn’t be further from the celebrity designer genre that has been flooding the apparel industry for a decade.

Fame opened the door, but it’s almost secondary in the Olsen fashion empire.

“They were thrust into celebrity before they had the ability to make their own decisions,” said Ken Downing, senior vice president and fashion director at Neiman Marcus, which carries Elizabeth and James in 41 doors, and Textile in 34 doors. “What I find most interesting about the two of them is that they are truly passionate fashion people at their core. I truly believe that if they hadn’t [landed in] the Hollywood scene early, these two young women would have gone to top design schools on their own accord and found themselves in the fashion industry.”

The journey may have been less conventional than that of most designers, but by the time the pair launched The Row in 2007, they already had plenty of business experience. Jill Collage, president of Dualstar and a longtime collaborator of the two women, probably knows the designers better than any other executive working with them, and has witnessed them hone their business skills through the years.

Collage first met the young actresses when they were six and she was a production assistant on “Full House.” (The Olsens will be 25 next month). She evolved with them through their movie and video ventures, their Mary-Kate and Ashley tween brand at Wal-Mart, buying out Robert Thorne to take complete control of Dualstar in 2004, and moving to New York where their new fashion company was established.

At its peak, with the Wal-Mart business in full swing and a slew of tween videos and licensing deals in place, the Olsens’ brand was estimated to be generating nearly $1 billion at retail. Today, without the tween label or ancillary products, sources estimate it’s almost $500 million at retail. The Wal-Mart label ended in 2008.

Collage said the growth into the various labels was almost organic, beginning with the quest for the perfect T-shirt. During a trip to Canada they noticed that almost every girl in the crowd mimicked their bohemian, layered style replete with oversize sunglasses. This prompted them to launch Elizabeth and James.

More recently, the designers felt that they needed to round out their assortment with a viable online operation, giving birth to the partnership that created StyleMint.com.

Collage said that it is the Olsens’ hands-on approach to each brand that gives the entire operation, which now has a total of 30 employees in New York and Los Angeles, a sense of authenticity, and ultimately, its recipe for success.

“We do not see our licensed businesses — Olsenboye, Elizabeth and James and StyleMint — like licenses,” Collage noted. “Mary-Kate and Ashley are at each of our partners weekly, if not three times a week. We are involved in marketing, p.r., branding and product. If Mary-Kate and Ashley feel that the fit isn’t right or the material isn’t right, we start over. They are involved from the conceptual base of each brand and see it through.”

Collage’s role is emblematic of the kind of company ethos that Mary-Kate and Ashley Olsen have embraced. It is centered around loyal relationships with a few key senior executives who understand the designers and play instrumental roles in executing their fashion vision and developing it into viable businesses.

The team includes Jane Siskin, president and chief executive officer of Jaya Apparel Group LLC, the apparel licensee for both Elizabeth and James collections and Olsenboye, and the manufacturing partner for StyleMint; Elizabeth Sweney, co-chief merchant at J.C. Penney Co. Inc., who works closely with the designers on Olsenboye; Steve Madden, the footwear partner for Elizabeth and James and Olsenboye, and Josh Berman, one of the original founders of MySpace, whose BeachMint Inc. is StyleMint.com’s partner.

Mary-Kate and Ashley work on The Row alone.

Madden remarked about the professionalism of the two: “They are very tactile, they touch everything,” he said. “I didn’t expect them to be so hands-on. I thought for sure that they would be late for our first meeting, but they were there at 8:50 a.m., ready to work, which blew my mind. They are all business.”

Siskin, who first met the duo to hash out Elizabeth and James, echoed this sentiment.

“They are completely immersed in the product,” she said. “The customer senses that. They have tremendous fashion credibility, they have very strong personal aesthetics and it really shines through.

“It’s not about enhancing their celebrity and that, to me, is the biggest difference [between them and other celebrities with fashion lines],” she added. “It’s about being real designers, and they are real designers.”

Elizabeth and James is one of the top lines on contemporary floors and the company’s biggest business, even as the men’s wear, which the designers dabbled in for a few seasons, has been put on the back burner for now to focus on growing women’s. Besides apparel and footwear, the line offers sunglasses with Absolute Black Design and jewelry with Clover Corp. Handbags are currently being made in-house with a launch slated for fall 2012, and fragrance and tabletop deals are expected to be unveiled soon.

“Ashley and Mary-Kate want to evolve every brand into a lifestyle brand,” Collage noted.

Olsenboye, meanwhile, brought a sophistication and bohemian sense to Penney’s junior departments. Sweney said it grew rapidly from the moment in early 2009 when the designers cold-called her from the junior department at the Queens Center Mall to propose the teen brand.

“They had done all their homework on why they should be at J.C. Penney,” Sweney recalled. “They said, ‘we know you have a great teen population that comes to your store. We know you are affordable, and we want to be affordable.’”

The designers were not short on creative ideas, either, and understood that a successful launch would require more than just good clothes.

“We were talking about the vision for this brand and how it could be different than just another junior brand,” Sweney said. “Mary-Kate and Ashley said that teens love to travel and dream of going to New York, London and Tokyo. They suggested brand settings for different cities, using travelers’ trunks in the store presentation.”

Retailers agreed that all the various lines are growing rapidly.

“They have become, in a very subtle and quiet way, a very good and large business for us,” said Daniella Vitale, chief merchant and executive vice president at Barneys New York, which carries The Row. “They have not built something off of their name, which as we know, many celebrity designers or creative directors do. Rather, the collection is built on the actual clothes. They may have been pigeonholed in that [celebrity designer field] initially, but I don’t think of them as such. When you talk to them about the collection, and, for instance, challenge them on the price of something, they can literally explain it to you down to the last piece of hardware, the make, the workmanship, and how many hours it took to produce the garment.”

Linda Fargo, Bergdorf Goodman’s senior vice president of fashion office and store presentation, said the Olsens are “the real deal.”

“There’s something cool about the sexy, effortless, nonchalance of it all,” she said of The Row. “These are nonfashion pieces — meaning they are instant classics without the hook of perishable trends. I don’t think there’s any other collection like it in the designer market. It purposely lacks edge, designer bells and whistles. It’s a stealth success story with a cult following of Row acolytes.”

As for the future, Collage said it’s about focusing on turning the brands within the portfolio into a lifestyle collection — though that may not happen all at once.

“The Row is Ashley and Mary-Kate’s American luxury brand, and obviously it takes a longer time to build a luxury brand than a contemporary brand,” she explained. “For Elizabeth and James, we want to get into fragrance, handbags, tabletop and home, and really grow it into a full-blown lifestyle label and I think we are well on our way. Mary-Kate and Ashley feel there is opportunity for this in different markets like the U.K., Australia and Canada, but it’s a matter of finding the right partners.”

Proving just how business-minded the two young women are, they choose to run each brand as a completely stand-alone business for a reason — they are already mapping out possible future scenarios for the budding fashion conglomerate.

“If there is a time the girls want an investor or want to sell one of the companies, we can do that,” Collage said.

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