She Owns It
Portraits of women entrepreneurs.
As she works to get a handle on pricing, Susan Parker, a member of our business group, weighs the competing interests of art and commerce. On the one hand, Ms. Parker, who owns the dressmaker Bari Jay, is thrilled with her creative designer and credits her with much of the company’s turnaround. The designer, Kristine Eikenbary, takes her inspiration from higher-end fashion. “Her designs are gorgeous,” said Ms. Parker.
But they are also expensive, thanks to more complicated elements that add fabric and labor costs. For example, a plain dress might require three yards of fabric, while a shirred or pleated one could take five or six — plus the added work required to create these features. On top of that, as a result of increased costs for raw materials, labor, and shipping, it’s getting more expensive to manufacture the dresses in China.
Hiring Ms. Eikenbary three years ago was a coup for Ms. Parker’s father, who spent a year wooing the designer before he became ill (he subsequently died, leaving the company to his daughters, Ms. Parker and her sister). In those three years, Bari Jay’s average retail dress price has risen to more than $200. “Two hundred seems to be the magical number,” said Ms. Parker. Many customers won’t pay more.
Despite Bari Jay’s growth — in 2010, annual sales increased 20 percent — many stores, especially in the Midwest, have dropped the company because of its prices. The slack has been taken up by increased sales to some of Bari Jay’s other retailers.
Ms. Parker said she wanted Ms. Eikenbary to keep doing what she does “because that’s what’s made us what we are.” But she also wants her to incorporate some simpler styles — even though designing simple can be complicated. “You almost feel that simple has been done in every way possible,” said Ms. Parker, presenting a challenge for Bari Jay’s creative designer.
“Does she understand the financial implications?” asked Jessica Johnson, a business group member who owns Johnson Security Bureau.
Ms. Parker said she did and was eager to make it work.
“But she’s creative, and that’s what drives her,” said Alexandra Mayzler, a business group member who owns Thinking Caps Tutoring.
“Right,” said Ms. Parker, who is starting to receive next season’s designs. When she opens the pictures, she said, she feels like she is “having a heart attack” and worries that Bari Jay won’t be able to produce the styles at prices the retailers will pay.
The company’s salespeople, who are on the front lines with retailers, tell Ms. Parker that it’s fine to have dresses that sell for $230 or $250 as long as other designs are available for $180 or $190. Bari Jay’s retailers stock only sample sizes of each dress, so customers must order their size and wait for delivery regardless of which style they want. A store needs to carry only 12 Bari Jay styles to sell the entire line. “But if we have no dresses in the store, we just lost a Bari Jay sale,” said Ms. Parker.
“Could you do two lines, like Bari Jay and Bari Jay Plus?” asked Ms. Johnson.
Ms. Parker replied that they had considered that, but determined they would be unable to make a cheaper line. Any additional line would have to cost more.
And the rising cost of manufacturing in China will continue to be an issue, said Ms. Johnson.
“That’s my fear,” said Ms. Parker. She is unconvinced that a simple dress that costs less than $200 today will cost less than $200 next season. “I’m wondering at what point people say, ‘I don’t need a Bari Jay dress. I’m just going to go to David’s Bridal because their dresses are under $200,’” she said.
Ms. Mayzler pointed out that labor costs are rising worldwide as workers demand and receive fair pay. She speculated that rising costs must be an industrywide issue — one that Ms. Parker’s competitors are also facing.
That’s true, Ms. Parker said. However, some larger companies mass produce dresses and use cheaper fabric (a compromise Ms. Parker is unwilling to make). So while their prices are also rising, their dresses still cost much less than Bari Jay’s.
But you’re trying to attract a certain customer, said Ms. Mayzler. She added that, just as Thinking Caps provides more than “a body to warm the seat while your kid does homework,” Bari Jay is also special and should market its strengths as a maker of better-quality dresses.
Ms. Parker agreed — but only to a point. Yes, some stores do appreciate the value of a Bari Jay dress, and that’s why the company has been successful. But she worries that continued price increases could sharply limit Bari Jay’s growth potential.
“I think you have to decide what your goals are,” Ms. Mayzler said. She made an analogous decision, she said, when she chose not to offer lucrative test preparation classes, as opposed to the individual tutoring that distinguishes Thinking Caps. While the classes bring in more money per hour, Ms. Mayzler decided they didn’t fit her mission.
“The difference — or at least the way I perceive the difference — is you’re going after the end user,” Ms. Parker said. She explained that she might lose a sale to a girl who wants a Bari Jay prom dress but can’t get one because all the stores in her area have dropped the company.
“So it’s more opportunity costs,” said Ms. Johnson.
“If I don’t sell to one store, God knows how many sales I could potentially be losing,” Ms. Parker said. She added that she was not willing to consider selling directly to consumers through the company’s Web site because it would put her into competition with Bari Jay’s retailers.
We’ll check back with Ms. Parker and the other owners in future posts. In the meantime, what do you think of Bari Jay’s dilemma?
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Article source: http://feeds.nytimes.com/click.phdo?i=3fc1717d2d86f3ef8006c3904866c6cc