Lisa Nunziata and Andrew Leung, partners in L & Leung Design Group, having been around the proverbial handbag and leathergoods block a few times. Nunziata, who had her own showroom, Lee & Gi Fine Handbags for 13 years and then was vice president of sales at The Sak, ventured out on her own three years ago in search of something new. Leung, one of the leading China-based contractors in private label, was looking for a new branded business, too. Together they formed their own handbag and design company—just about the time the recession hit and retail business seemed to stand still.
After an initial success with Fortuna Valentino, a leather handbag brand carried on QVC, they looked for another brand name that would be recognizable to a style- and price-conscious consumer. But rather than looking for inspiration from the latest up-and-comer from the runways, they settled on one of the most legendary names from the Billboard charts. Their collaboration scored a gold record as a bestselling handbag line in stores like Macy’s, Dillards and Victoria’s Secret.
What’s the connection between Carlos Santana—the Mexican guitarist and music legend who has sold more than 90 million records—and handbags? How did this collaboration come about?
Lisa Nunziata, president: When we started L & Leung, one of the categories we investigated for opportunities were trendy non-leathers under $100 retail. One thing was certain, stores didn’t need another ‘jeans’ brand on their shelves.
I also saw an opportunity to address one of the fastest-growing consumer segments in the country: Latina women.
When doing research, one name topped my list. Who better than Carlos Santana? I just called his publicist, pitched the idea and Carlos liked it. We signed the licensing deal and by October 2008, the Carlos by Carlos Santana collection was in Macy’s selling through at retail prices $59 to $98.
Who would have thought a 62-year-old Grammy award-winning musician would add to his list of credits a hit in handbags? He also has a license in women’s shoes, is that one of the selling points for his handbag line?
Yes, there’s inspiration from his footwear line, which also has an artistic flair. The thing about Carlos is that his music, his style, his inspirations are a fusion of concepts from around the world. He really put world music into the American scene. And at 62, Carlos is still very stylish and a trendsetter. Carlos is one of those artists who has maintained his stature and following for more than four decades. That says a lot about his ability to change and address new audiences. He’s still very relevant. The Legacy edition of his top-selling album “Supernatural” was released earlier this year. Meanwhile, his shows at The Joint at the Hard Rock Casino in Las Vegas continue to sell out.
What kind of fashion input or guidance does Santana provide?
He gives his opinion about direction, color and a feeling. For instance, he encouraged us to do brights—they sold. One of the concepts of this business is to be a design laboratory. We don’t just wait for markets to introduce new products, we continue to introduce all the time. Since our initial business was mostly private label, we have the ability to have our designers sit down and work with retailers on what they need, then we can have it produced and shipped from China—a vertical operation. It’s a much faster turnaround than most retailers could do on their own.
What has surprised you most about the success of the Carlos Santana bags? The name recognition? The fact that you apparently tapped into a consumer segment that wasn’t being addressed?
No matter what name is on the bag it’s still all about the product first. Second, is it priced right for this economy? The fact that it has a recognizable brand name helps close the deal, I think. Carlos’ name isn’t emblazoned on the bags. Each one has a story card that identifies his connection and notes that he donates a portion of each sale to his Milagro Foundation, which provides grants to help underprivileged children. That also might contribute to pushing the consumer to buy the product.
The thing that surprises me the most was how sales transcended what we thought was the initial target, Latina women. Yes, they buy the bags, but Carlos, his music and his legacy is multilingual, multicultural and multigenerational. They appeal to the 14-year-old looking for a trendy bag and they appeal to women over 40 who still want a fashion look. She already has the Louis Vuitton, Coach or designer “it” bag. Now she’s looking for an inexpensive pick-me-up that makes her feel good, is fashionable and isn’t a lot of money. I call these women “cougars”—not in the sense they search out younger men, but that they have maturity and self confidence about themselves to want to look sharp.
What lessons can be learned by launching a collection during a recession?
Despite the recession, we’ve been growing about 30 to 35 percent a year. We have to work hard to build in the details consumers expect even at lower pricepoints, but yet still offer the retailer a 55 to 60 percent markup. We’re shipping more for the “buy now” consumer who wants something she can wear that very weekend. Instead of building broad families in a collection, the focus is more on key items that a store can bring in and get out of for the next season. There are faster rotations going on now. These days we suggest testing new items in a number of doors and if it’s a credible test and have relevancy then expand it to the other doors.
What types of items or additions are coming in the Carlos brand?
Collage styles have done well, but we also have quilted versions, ruffle trims and more emphasis on cross body “midi” sizes rather than minibags. In keeping with offering a wow factor, we include some fun items, like a great Mongolian lamb bag at $98 retail.
Besides Carlos, what other niches are you developing?
In addition to Carlos, we have Emma Fox, a leather collection under $300 retail, and Pure, our new snakeskin collection at $128 to $258 retail. Thanks to these our mix has shifted to be about 40 percent in branded collections, 25 percent in private label, contract work, about 15 percent and another 20 percent in premium bag produced mostly for the fragrance business.