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In an unassuming, controlled fashion, L’Agence is becoming the quiet West Coast counterpart to touted New York contemporary brands that include Rag & Bone, 3.1 Phillip Lim, Helmut Lang, Alexander Wang and Theyskens’ Theory. The brand is heightening its profile a smidgen with a tiny store opening today on Melrose Place in Los Angeles.

This story first appeared in the July 22, 2013 issue of WWD. Subscribe Today.

The store itself, on a reenergized street that L’Agence creative director Margaret Maldonado has made her professional home for eight years — first at the Margaret Maldonado Agency, the styling, hair and makeup agency she founded in 2000 and continues to own, and then, beginning in 2008, with L’Agence — reflects the brand’s measured approach to growth. It is 500 square feet at the outset and intimate enough to feel like the fantasy closet of an admirer of L’Agence, but can be expanded 700 more square feet when L’Agence is confident the sales will justify a size increase.

“We’ve been on the street for a while. When the street started coming alive again about a year ago, we saw the rents pop up. We have great real estate. We have a brand strong enough now that it can support a space. The online [business] is good, the brand recognition is good, so we started to open the front of the floor,” said Mikko Koskinen, L’Agence’s chief executive officer and Maldonado’s husband. “We do everything small to start. We started the original clothing line in our house. We have this space, we will set this up, and once we set it up and see how the business is doing, we can expand in back here right away.”

Adhering to the simple, straightforward aesthetic of the brand, the L’Agence store design doesn’t rely on gimmicks. “This is a John Woolf building, and I love John Woolf. We’re not the type of brand that has the resources and money to come in and redo every single thing. This is the type of place that I don’t want to redo. I just want to put a fresh coat of paint on it and restore the floors, and there it is, beautiful,” said Maldonado.

The merchandise in the store is evidence of how the brand has evolved since its birth five years ago. Take the pre-fall collection. It reflects the sophisticated, dress- and blouse- heavy L’Agence approach. Dresses constitute almost half of the pieces in the collection, many made from satin, matte viscose, suede and lambskin. That’s not what Maldonado pictured when she initially cold-called Ron Herman, who early on became a minority partner in L’Agence along with J Brand founder Jeff Rudes, with only a label to go inside of the clothes and an idea for a brand centered around easy-to-wear pieces.

“I didn’t understand the business. I thought that I could have this cute little line, and it could be some T-shirts and some jersey dresses and a few silk pieces and a leather jacket. There you have it. I could do that every season, but the market wants more,” said Maldonado. Koskinen added, “Dresses are big for us, and it’s strange because we started in T-shirts. It’s purely customer-driven. We are getting feedback from the stores and our sales rep that people love L’Agence dresses. In this weird way, the customer is morphing the company for us into what it is going to be, and they want nice luxurious dresses, blouses, skirts, trousers and jackets.”

Ironically, L’Agence’s success in dresses and blouses has enabled it to return to its roots. For spring, it introduced LA’t, a diffusion line priced at $84 to $400, compared with roughly $225 to $1,895 for L’Agence items, at Ron Herman and in Japan. LA’t speaks to Maldonado’s casual, T-shirt-and-jeans sensibilities, and it also allows L’Agence to enter stores that don’t carry the brand, which is currently carried in 250 doors, notably Barneys New York, Bergdorf Goodman, Intermix, Saks Fifth Avenue, Nordstrom and Neiman Marcus. Bloomingdale’s is launching LA’t in eight stores for fall.

Discussing LA’t, Maldonado said, “I like making T-shirts and jeans, comfortable clothes. I still want those clothes you can wear every day. When I make the [L’Agence] line and look at it, I’m like, ‘What am I going to wear every day out of this? This isn’t what I can wear every day.’ I don’t want to lose that.”

When it comes to expansion, stores are top of mind for L’Agence. Ideally, beyond L.A., Maldonado and Koskinen see L’Agence opening stores in New York, London and Tokyo, cities with strong customer bases for the brand. L’Agence generates $15 million in annual wholesale sales, 15 percent of that coming from abroad, where L’Agence established a presence out of the gate. Koskinen can envision the brand in the not-too-distant future generating $25 to $35 million in wholesale sales with a few of its own stores and an enlarged accessories statement.

“We are going to continue to grow profitably, but it took three years to get it to this place. There was a learning curve. Even though we were profitable last year, too, on paper, we always have a million dollars tied up in inventory, so you don’t really feel it, but this year we are going to get over that hump. Right now, we have enough to do what we are doing, and then as the company goes through this year and next year, we will actually start building surpluses to invest back into the business, which will be nice, unless we decide to bring on a partner to make things grow faster and do a store in New York,” said Koskinen.

“These are all things that we are looking at, but in the meantime, we have our heads down. We are making clothes, shipping them on time, making them fit, making them great quality. The things that have gotten us here drive us every day,” he said.

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