Two years ago, Rory Beca started a fashion company in her mother's Santa Monica house.
Today, the Rory Beca company is on track to sell $5 million worth of her clothing this year.
She doesn't want to grow too fast, though. She's afraid that introducing too many products, such as shoes and handbags, before she has established her brand could lead to wasted money.
Right now, Beca plans on growing her business in international markets, including Asia and Australia, where she recently opened accounts. Also, she just had a show in Paris.
Beca said the company is open to new investors, who have approached her with generous offers, but she wants to make sure they feel like family.
"We don't want anyone to change the company from what it is," she said. "We go on instinct, really."
Financing growth is a challenge that many L.A. fashion companies face at this stage of the game, said Ilse Metchek, president of the California Fashion Association.
"How do you convert a $5 million business into a $3 million check to write for raw materials?" Metchek said. "That's the big next step."
According to Metchek, a company in Rory Beca's position needs to reach out to higher-level fashion industry professionals.
"It's time for them to let the industry experts come in and let them know they exist," she said. "It's like one hand clapping if they don't know you're there. You need to know where the pots of money are."
Though Beca is being cautious about her company's growth, Metchek wondered if that was best, noting, "If she's just going along and seeing what happens, that's wrong. But that's what a lot of people do."
Natasha Silver, director of sales and merchandising for the company, said that she would like to see the company make $7.5 million in sales next year. Beca wants to do $10 million in the next two years.
One way Beca plans to get to that level is through licensing deals, which will allow other companies to manufacture products using her brand, keeping her capital costs down. Though she is wary of entering the accessories market right now, she does plan to put her name on a variety of products when she feels her brand is strong enough.
Beca is in the process of meeting with agents who represent licensing companies and is looking for a new financial adviser.
Branding the company
Beca dropped her last name, Edelman, and goes by her first and middle names, which also form the name of her company. Her mother, Abra Edelman, runs the business.
Since starting the label two years ago, Beca, 26, has turned it from a startup in mom's kitchen to a downtown company with eight employees.
Her first big seller was an interpretation of a caftan, a type of full-length tunic, with a deep V-neck collar, three-quarter-length sleeves and a short hemline.
She sells her clothing via online retailers and in more than 400 specialty stores and boutiques, including Lisa Kline, Intermix, Nordstrom and Saks Fifth Avenue.
"We don't want to sell to too many department stores just yet we want to keep her feeling special," Silver said.
Silver noted that part of the company's success has been its price points; more expensive than brands like Express, but much lower than upscale designer names such as Dior. The garments retail from $150 to $499 a piece, with most selling for around $250.
"We try to keep basic pieces between $150 and $299 so a girl can afford that special piece," she said. "We don't want to alienate people."
Lisa Kline, owner of the eponymous Los Angeles boutique and one of the first to carry Beca's line, says Rory Beca is one of her top 10 vendors, along with Rebecca Taylor and Cynthia Vincent, the latter also an L.A. designer.
"Rory has grown with her business, and you can tell that with her collections," Kline said.
Much of Beca's family is involved her company. Her sister handles marketing, and her brother, who is engaged to Silver, helps design the brand's prints.
Beca has cut back on imported fabrics and is creating her own prints using her brother's designs. Owning the prints also allows the company to offer exclusive products to certain stores, which it did for its fall collection.
To save money, shipping is handled out of Beca's office. Though the company could have chosen cheaper outsourced manufacturing, it has opted to stay local, with 95 percent done in Los Angeles. Only sweaters and pieces with sequins are sent abroad.
Beca got her start knitting scarves five years ago. She was interning with costume designer Debra McGuire, who put her creations on TV shows "Friends" and "Crossing Jordan."
The exposure led to sell-out trunk shows preview sales and custom dresses for celebrities, including actress Jenna Elfman.
Beca decided to start her own line. Family friend and New York financier Joseph Gamberale gave her $100,000 in startup money and he got 5 percent of the company in exchange. That was how the Rory Beca label was born.
Working out of her mother's place the first year was tough.
"Rory and I didn't come into this with the mindset of 'We know,'" Abra Edelman said. "Not only don't we know, we don't even know what we don't know."
There were shipment problems and lost money, but Beca and Edelman said they have learned from their mistakes.
For example, when one store didn't get its shipments on time, Edelman offered to let the store sell Beca's clothes on consignment and return any unsold merchandise. She also guaranteed that the store would get its shipments first from then on.
The store wasn't a big account, but that didn't matter. Edelman prides herself on good customer service because it leads to loyal clients.
"What goes around comes around," she said. "Our bill collections are almost 100 percent."
Headquarters: Downtown L.A.
Core Business: Contemporary women's fashion
Employees in 2008: 8 (up from 3 in 2007)
Goal: To grow to $10 million over the next two years by expanding internationally and through licensing deals
Driving Force: The demand for fashionable women's clothing at mid-range prices
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