The Bae sisters are keen on keeping manufacturing in Los Angeles. The Baes — Elizabeth and Claudia — come from a family already in the business. Their parents own a factory in Los Angeles and the two quietly began working on their denim line, 1denim, in May 2015, more recently unveiling it to the public with a store at Caruso Affiliated's Americana at Brand in Glendale and an online store. Wholesale will eventually be in the cards as well.
The choice for the company's first real estate move at Americana is an interesting one but provides insight into how it's positioning itself in the future.
"We wanted to target an area that was more family-oriented," explained Claudia. "We do have product offering from kids and toddlers to your teens to young professionals and older women and men so we wanted to target a market that serves all of those."
The 1,200-square-foot store, which bowed under the radar last month, has been doing well, the Baes reported. The majority, about 90 percent of people who try product on in store make an actual purchase, according to Elizabeth. The store also benefits from a good amount of walk-in business and boasts its own coffee bar and sells gourmet chocolates from Santa Barbara.
"We added the coffee and chocolate component because it was a way to reach an additional crowd, especially nowadays with retail being so difficult," Claudia said. "We felt that because our strategy was to start with direct retail, we wanted a creative way to attract customers. I also do think it makes for a good shopping experience."
The two plan on opening additional brick-and-mortar locations and are eyeing a potential location in Orange County. It's a market similar to Glendale in that it's a more suburban setting that would garner a diverse customer mix, according to Elizabeth. She added the store could open as early as the first part of 2017.
The goal, Claudia added, would be to open as many as 10 stores next year, with a sprinkling in California and then other parts of the country.
"We definitely want to do more brick-and-mortar and the main reasoning behind that is because we are a factory direct-to-consumer brand," Claudia said. "We have our own factory and we want to keep our prices low."
Pricing on the women's side starts at $89 and can go up to $130 for a jacket, while men's starts at $99 and runs up to about $140.
The company's also now building a sales team to develop a wholesale business, Elizabeth said. With small margins, finding the right retail partners will be key, her sister added.
The factory, located in Los Angeles with a workforce of about 300, is owned by the Baes' parents who have been running a private label business for more than 26 years and helped fund their daughters' business. The two sisters cited the rising labor costs that have made it a challenge to continue manufacturing domestically as a good chunk of production moves to Mexico or Vietnam. It's that shift that motivated the two to create their own brand and continue manufacturing in the city and it's also what gives them a leg up on the competition.