Incentives keep drapery firm from bolting
Sometimes, what happens in Vegas can stay in Los Angeles.
Or, more specifically, in a vacant industrial building in Sylmar. That will be the new home of a 25-year-old Calabasas business named Drapes 4 Show Inc., which has made linens for Air Force One, swanky hotels, exclusive celebrity weddings and Hollywood movie sets.
The company had been leaving for Las Vegas, where many of its products are used, because it couldn’t find a suitable site for growth. Everything the company looked at in Los Angeles and Orange counties was too small, too expensive or too far from its workers.
But the company that was founded in a schoolteacher’s garage had learned that it pays to look for expert help when problems arise. This time, it came from a $900,000 grant and loan package from the Community Redevelopment Agency of Los Angeles, approved by the City Council last week.
“Our problem was never a lack of sales. It was the constraint of our space. We felt like that seal with the plastic six-pack holder closing in around its neck,” said Jason Honigberg, Drapes 4 Show’s chief financial officer and the son of founder Karen Honigberg.
“We’re thrilled. We didn’t want to uproot or lose our employees. We really wanted to stay in Los Angeles,” he said.
Drapes 4 Show’s 30 employees design and sew tablecloths, napkins, table draping fabrics, backdrops and other products for hotels, convention centers and hospitality industry clients. It’s a lucrative niche that brought in $3.6 million in sales in 2007, but it began in an unlikely fashion.
In 1983, Karen Honigberg was a teacher with an art background who was looking for work that would allow her more time to raise her two sons.Helpcame from her best friend’s husband, who sold custom-made motorcycle parts at trade shows. The fabrics he used to cover his trade show tables were always wrinkled and frayed and hurt his product presentation, she said.
Honigberg, 61, had loved weaving on the looms at Cal State Northridge while she worked on her art degree. She jumped at the opportunity and rented an industrial-grade sewing machine to do the work.
“He said, ‘Can you make a lightweight display for me that I can carry on and off planes and will be very professional-looking?’ ” Honigberg said.
“We made him four panels for the backdrop, each 8 feet by 54 inches, and we silk-screened his logo on. It looked very nice. People saw them and started coming to us asking for back drapes for their shows,” she said.
Little touches made her products stand out from competitors’, Jason Honigberg said. She used a heavier weight of polyester that wouldn’t wrinkle. The bottoms of her drapes and table skirts ended in a turned or folded hem that hung better and did not leave stitches showing that could fray or unravel from heavy use or hard laundering. She used Velcro, instead of plastic clips, to invisibly hang her table skirts.
To break into the hotel business, she went after the Hilton that spent the most money replacing its drapes, table skirts, napkins and place mats. The company’s products held up better and cost the hotel less, Jason Honigberg said.
Good fortune struck again in 2002 when the company bought a balky and complicated custom-made machine that was supposed to make box pleats. No one could figure out how to operate it. A sewing-machine distributor suggested they contact Steven Szabo, a retired textile and tool-and-die expert. Szabo couldn’t run the machine either, but the former business owner was able to show Drapes 4 Show employees how to operate the company’s other machines more effectively.
More important, Szabo became a mentor to Jason Honigberg, a 2001 graduate of the Cal Poly San Luis Obispo business school, where he studied industrial technology.
“I could go to him with problems and he would help solve them. I came to him with ideas, and he could tell me how to make them work,” Jason Honigberg said.
For his part, Szabo said that after he met the Honigbergs and saw how hard they were trying to make a go of it, “I couldn’t help but continue to offer my help. Jason’s always thinking. He’s like a son to me.”
One example of Szabo’s help was when the Four Seasons hotel chain requested a simple, one-piece table covering that would look good and stand up to lots of abuse, Jason Honigberg said. Szabo helped reconfigure one of the sewing machines to make a one-piece drop-over that covered the table and eliminated the need for separate skirts.
But by 2003, there was hardly any wiggle room left at the company’s 6,500-square-foot facility. Big jobs, such as folding 25-foot drapes, had to be handled outside in the parking lot after employees laid down large swaths of cardboard. Clients began to worry whether Drapes 4 Show had the capacity to quickly fill a big order. The space was too small to allow the hiring of more workers, which meant current workers had to put in more overtime.
Real estate brokers had no luck finding anything affordable for the company to buy.
The Honigbergs were edging closer to a move to Las Vegas, where they thought there would be better space available and where they were expecting a friendly business climate. They already owned two homes there.
The Community Redevelopment Agency, which receives about 50 requests a year for various kinds of help from businesses, was Drapes 4 Show’s last resort. But the more the CRA learned about the company, the more the agency wanted to help, said Steven Brady, its senior real estate development agent for the east San Fernando Valley.”They are a committed family business. They all live locally. They provide full benefits for their employees. They have paid leave, a pension fund and a profit-sharing plan. They take their role in taking care of their employees very seriously.”
The solution turned out to be a 16,800-square-foot building in Sylmar within the aid boundaries of a project area established after the 1994 Northridge earthquake to encourage businesses to expand or relocate there. It was bigger than the Honigbergs needed, but they were able to afford it through the package provided by the CRA.
The package is structured like a loan at a 3% interest rate over 10 years, with partial forgiveness of some of the debt each year as long as the company meets the deal’s requirements. Brady said that Drapes 4 Show had to agree “to create and maintain 30 jobs complying with the city’s and the CRA’s living-wage policy.”
For Drapes 4 Show, it means that the 17 of the 30 employees who currently make $8 to $9.50 an hour have to get a raise to the city’s living-wage standard of $9.71. The company already provides more in health insurance for its employees than the city requires.
It has to ensure that the wage policy is also met for construction and renovation workers, Brady said. The company also agreed to find new employees among the area’s low-income residents.
In addition to the CRA funds, the company is investing $700,000 of its own money in the project and is receiving a $2-million industrial bond loan from the Community Development Department.
“We would not have been able to afford this building without the CRA’s help,” Jason Honigberg said, adding that the space to store more raw materials should help the company land bigger clients.
“In their minds, they are dealing with a small company that might not be able to handle bigger orders,” he said. “This will help eliminate that concern.”
