Talk about turning adversity into opportunity.
This story first appeared in the January 14, 2010 issue of WWD. Subscribe Today.
As retail sales and commissions shrank in the past year, four sales associates working at the Madison boutique chain in metro Los Angeles decided to bolster their incomes by creating their own fashion lines. With savvy born of firsthand knowledge about what their customers want and minimal overhead, Lindsay Sternberg, Shamani Hall, Andrea Cheatham and Danielle Rohani struck out on their own. Their labels have resonated at Madison and at boutiques nationwide.
For Sternberg, it started with a camisole. “I was selling women low-cut Alexander Wang tank tops, and they always asked, ‘What do I wear under this?’ You get a feel for what people are looking for,” she says.
Sternberg created a stretch lace tank top, then a slip and a bandeau. Next came jersey tops to layer over them, followed by party dresses. The line, Kenny—named for her father— wholesales from $25 to $125.
“With the economy the way it is, I know people don’t want to pay too much,” she says. “You don’t have to have expensive clothes to have a great wardrobe. Working in retail, it was always, ‘Do I buy this piece or pay my cell phone bill?’”
Sternberg, 32, graduated from the University of California at San Diego and learned design from the staff at Foley & Corinna, where she was the company’s third employee. She moved back to Los Angeles to manage Madison’s Robertson Boulevard store and left in December to focus on Kenny.
Now in its third season, the line sells in Madison, Diavolina, Planet Blue, Arcade and other Los Angeles boutiques, as well as Poppy in New York and Nani in Tel Aviv. Jessica Biel has bought dresses, and Fergie owns all the lace pieces. Sternberg estimated 2009 retail sales at $400,000.
Kenny is made in Los Angeles, and she has no plans to mass produce it.“The only way to cater to customers is to stay small,” Sternberg observes.“I like being able to react quickly if a buyer has a vision or I dream up an idea in the shower. If a silhouette is doing well, I will hold onto it as long as I can.”
Shamani Hall, 23, attended the Fashion Institute of Technology and transferred to the Fashion Institute of Design & Merchandising, where she got her bachelor’s degree, and paid her way through school working at Poppy in New York and Planet Blue in Los Angeles. Three years ago, she was hired by Sternberg at Madison, where she met Andrea Cheatham, 28, and Hall and Cheatham started Otis & Maclain.
“We noticed that there was a gap between the $800 Vivienne Westwood dresses and the $50 Splendid T-shirts,” Hall explains. “We made silk and rayon T-shirts retailing for less than $150 that flew off the shelves. It was a no-brainer.”
Like Kenny, the line is based on simple, flattering silhouettes in a range of patterns and colors. Otis & Maclain now sells in 60 boutiques including all the Madison and Intermix locations. Cheatham estimated 2009 retail sales at $400,000.
Cheatham has since left Madison, gotten engaged and moved to Missouri. Hall still works five days a week as a manager at Madison’s Robertson store. They meet in Los Angeles once a month to work on the line, which now consists of variations on the T-shirt and tank top in silk and cotton ranging from $40 to $100 at wholesale.
“It sells incredibly well because these girls know what customers want,” says Madison head buyer Belen Hormaeche. “These lines add a touch of individuality to our mix.”
Madison owner Mark Goldstein buys the items on consignment, which requires no money up front, and allows the vendors to replenish the items constantly. “I can’t raise their salaries, so if they can make money selling their own lines, good for them,” he says.
After a two-year stint, Rohani, 28, left Madison last year to work full time on her line, Mabel. She sold her first dresses last spring to Switch boutique in Beverly Hills after its owner saw her wearing one of her designs at a party. “I never would have done this without seeing the other girls at Madison making money. Now, it’s my passion.”
Her printed dresses, tunics and jumpsuits, which come in chiffon, silk and linen, wholesale for $110 to $130. She anticipated 2009 sales of $200,000. For her next collection, she’s interpreting vintage Vogue patterns that she bought on eBay.
“I feel lucky to have worked somewhere where I got to deal with designers, see how a business grows and test new designs,” Sternberg says.
So far, she has received 27 personal orders from Madison employees.“Being a former shop girl, I realized that was the biggest compliment.”