ECHO’S PLAN FOR MONSAC
Byline: Jill Newman
NEW YORK — Monsac International, the three-year-old handbag and small leather goods firm, is ready to make the move to the big time, now that it has gotten a financial boost from the Echo Design Group.
In October, Echo purchased a majority stake in New York-based Monsac, providing it with a capital infusion needed to take the brand to the next level. Echo has quickly developed several initiatives to help build the Monsac business.
Monsac sells its handbags and small leather goods to some 250 to 300 better specialty and department stores nationwide. The firm, started by husband-and-wife team Eugene and Rachel Gershburg, had a wholesale volume last year of about $10 million.
Monsac opened its first retail store in New York’s SoHo neighborhood in November and has expanded its line to include leather travel pieces and desk and pet accessories. Footwear will bow in 2001.
But that’s just the beginning.
One primary objective, explained Steven Roberts, co-president of Echo, is to introduce Monsac to new retail markets, both domestic and international. As a result, he expects Monsac’s revenue to grow 50 percent annually for at least the next three years.
“We bring strong industry relationships and knowledge of how to manage and grow a brand,” Roberts said.
Echo will merge Monsac’s back office, including warehousing and distribution, with its own operations here. However, design and marketing will remain independent, Roberts said.
The Roberts family decided Monsac was an ideal match for Echo after months of exploring potential accessories acquisitions.
“They are a small entrepreneurial company that has seen dramatic growth,” said Dorothy Roberts, Echo’s chairman and chief operating officer. “The Gershburgs have a true expertise in leather goods, a focused vision, and they meticulously manage and control the brand.”
Capitalizing on that expertise, Roberts said the firm also plans to develop private label and Echo brand leather goods within the next two years.
The Gershburgs have worked in the leather goods industry since they emigrated to the U.S. from Russia 20 years ago. Many of those years were spent at the handbag firm Sharif Designs, where the duo created that company’s well-known Americana Collection.
But establishing their own brand was long the Gershburgs’ version of the American dream. Self-described “control freaks,” Rachel Gershburg oversees design while Eugene focuses on production and distribution. Rachel Gershburg said she avoids shopping status brands like Gucci and Prada because she does not want to be influenced by their designs.
“I never look at the competition,” she said. “I want to stay focused on my vision.”
Monsac’s design philosophy is centered on its signature vachetta leather, which is updated seasonally with new colors and silhouettes.
“We wanted to create an image through an identifiable and consistent leather,” said Rachel Gershburg. “The bags had to be functional, comfortable, affordable and modern, yet classic. We avoid bold logos and our bags have a signature medallion, but it’s removable. It’s not about changing every season.”
The leather comes from a small Italian tannery that for generations specialized exclusively in natural vachetta, which is vegetable-dyed, without the use of chemicals. The use of natural vachetta, all-cotton linings and leather trims is in keeping with the Gershburgs’ avoidance of the artificial — a philosophy that’s even echoed in the design of their Fifth Avenue showroom, which is built primarily from blond oak wood and has a clean, minimalist feel.
The Gershburgs intend to expand Monsac’s retail presence with ambitious plans to open 10 more stores within five years. While its wholesale distribution is also expanding, it will remain focused exclusively on better department and specialty stores. Among them is Nordstrom, which has been a major account since the company’s inception and recently has begun opening in-store Monsac boutiques.
The bulk of the handbag collection wholesales for $115 to $125. Small leather goods range from $30 to $55 and travel pieces wholesale from $300 to $650.