Mar 25, 2010
Clothing startup trades on Angelina Jolie factor
Mar 25, 2010
CHICAGO (Reuters.com) - Kiran Rai has always had a sarcastic sense of humor, but she never thought it would be the foundation for her own apparel business.
Taking time off from a corporate career that included stints with Gap, Disney and bebe to raise her son, the single mother designed a t-shirt with the slogan "Adopt me, Angelina", poking fun at actress Angelina Jolie and her multiple adoptions. She gave one to a friend, who was spotted wearing it at a trendy Los Angeles boutique and before long Rai was scrambling to meet the demands of a budding business.
"I was just making random shirts, funny stuff," said Rai, 44, who also designed politically incorrect tees taking pot shots at the likes of George W. Bush and Scientologists. "Just by chance it started to snowball. It was all trial and error."
Rai, who was born in London to Indian parents, continued to indulge her penchant for pop culture, albeit with softer messages. She produced embroidered scarves bearing mantras such as "Peace" and "Blessed," as well as ethnic-chic dresses to accommodate consumer demand for Indian-themed merchandise. Jolie herself was photographed sporting one of Rai's wrap-style dresses.
"Once she wore that dress my psychotic entrepreneurial ‘Indianness' came out," joked Rai, whose late father was a lifelong entrepreneur, who among other ventures, ran a monkey farm in India.
To fulfill the initial order for some 100 screen-printed shirts from Kitson - the celebrity-driven L. A. boutique - Rai, who knew little about the mass production of apparel, began a crash course in sourcing, manufacturing and distribution.
Each time her clothing - today available in high-end retailers like Bloomingdale's and Henri Bendel, and online at a new website called Satya Rai www.satyarai.com/ - made its way into trendy shops like Planet Blue or Fred Segal, Rai said she had to shake off the disbelief.
"We were … basically learning everything. How do you go to a show? How do you sell to a big department store?" she recalled. "I would call wholesalers, and say, ‘Hey, I've got a shirt, do you want to buy it?"
Rai stepped up production, hiring a former colleague with fashion training to help with her door-to-door sales, as the two made regular trips from Rai's home in Phoenix to Los Angeles with truckloads of samples.
The positive entrepreneurial karma continued when actress and fashionista Drew Barrymore was captured wearing one of Rai's signature scarves, which often sell for well over $100. The celebrity endorsements helped propel her fledgling brand - Sir Alistair Rai - to some $4 million in annual sales in 2008, slightly more than two years after launching. "We didn't even know what happened to us," said Rai, who at that time employed a peak staff of 15 (since reduced to 6) to run her Phoenix-based company and warehouse, and installed sales reps throughout the country.
She also travelled to India to find factories to support the business. Rai said it was a challenge to locate contractors able to meet her standards for quality and fair-trade production.
"I had to buy in big," said Rai, who put about $1 million of her own capital into the business, and remains self-funded. "I just decided to take the risk."
TERRORISTS AND RECESSION
One of those trips marked a dramatic halt to Rai's run of good luck. She and her production manager were on a routine sourcing trip in Mumbai in November 2008 when terrorists attacked the Taj Majal Palace and Tower hotel, where they were staying. Physically unscathed, Rai lost all her product samples. Worse yet, she was waylaid to London and forced to wait a month for a new green card that would admit her back into the U.S.
"It was devastating," said Rai, who upon returning to The States found her business in the throes of the recession, with demand from long-standing boutique customers waning and sales dropping to half their peak. She cut her staff to a skeleton crew and began looking for direct-to-consumer options to maximize sales. "I had to make some really calculated choices," she recalled.
Opening her own traditional brick-and-mortar retail store was too costly, said Rai, who wanted to remain independent of outside investors such as venture capital firms. So she began looking for an experienced partner to create an Internet presence beyond the makeshift website she had previously run with marginal success.
She found it in New York-based Jump Ramp Ventures, an incubator set up to accelerate e-commerce for successful startups. Jump Ramp created a new website for Rai's merchandise, dubbed Satya Rai (formerly named Sir Alistair Rai). They incorporated Rai's wholesale goods with additional categories such as men's styles and active-wear - all focused squarely on luxury-minded buyers. In exchange for creating and running the site, which launched earlier this month, the firm will take 50 percent its profits.
"Kiran is a fantastic entrepreneur, she has a great brand identity - a really good fit for us," said Tony Vartanian, a Jump Ramp partner. "I think she really sees beyond the borders that she lives in in the wholesale world."
He added: "There's really a kind of universal message to her brand. It can reach different demographics."
Long-standing customers such as Deborah Boschen, co-owner of Richmond, Virginia's Pink boutique, which focuses on contemporary designers, agreed. Despite price tags that sometimes give shoppers pause, Boschen said products such as Rai's scarves have staying power because customers recognize their value.
"They fall in love with its usefulness," said Boschen, who sells out whenever she places an order. "Knowing that a conscious effort is made just adds to the value."
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