Article - Earnshaw's October 1997 - Q&A Sweet Success Interview

Sweet

Success

The principals of
Sweet Potatoes
reflect on nearly
two decades of
prosperity in
children's wear,
while looking forward to
their continual expansion.

By Rose Palazzolo

What began as a simple kitchen-table operation nearly 20 years ago has turned into a thriving business for three Berkeley, Calif.-based women, who now stand out as major players in the children's wear industry. Having already garnered a Dallas Fashion Award in 1996 for children's wear and two consecutive Earnie Awards in the girls' infant/toddler casual category, Sweet Potatoes has been nominated for another Earnie this year for boys' infant/toddler casual wear. The unassuming trio of friends--Josie Jurczenia, president, Ginny Holmes, executive vice-president and Anna Tokunaga, CEO--- are gearing up to expand their privately owned, multi-million dollar operation; they're further developing licensed products, and branching into the European market by licensing the Sweet Potatoes brand abroad. To accommodate their rapid growth, the partners have purchased a building down the street from their current space. Jurczenia and Holmes took time out to talk with Earnshaw's about their success, and how their friendship has helped propel the company to its top-ranking status. (Tokunaga was unavailable at the time of interview, since she was just one week away from delivering her son, William.)

ER: How did you get started in the children's wear industry?
JJ: Anna and I were both pregnant at the same time, and we saw great potential in the children's wear market. So I started designing clothes and Sweet Potatoes was born. I had experience working for a designer in San Francisco, Jeanne-Marc, and became really interested making garments. When Anna was 17, she spent a year in France working as au pair and was awed by the children's fashions there. So when we thought of forming a company, her memories of the fabulous French designs for children were considered.
We both saw this need for interesting children's clothing in America. We were so green around the gills, though. I was dirt-poor, but I bought an industrial sewing machine. I bought fabric at local stores, and we were really just trying to make enough money to pay for the sewing machine.
As for how I became interested in design, I'd always been in the 4-H club and have always sewn my own clothes. I have a degree in design and textiles from the California College of Arts & Crafts.

GH: I came along a couple years later. Basically, I needed a job. After receiving my degree at The Fashion Institute of Design and Merchandising at Los Angeles, I applied at Sweet Potatoes. They hired me fresh out of school.

JJ: Anna and I built the company out of nothing, and at that time we didn't even draw a salary. We paid Ginny $5 an hour; she worked at a bowling alley at night to bring in more money. It was really a labor of love. Now, we're on the heels of our 20th anniversary, and Ginny has been here for 17 years.
When we started, Anna's father co-signed a $7,000 loan for us. [From there], we were able to significantly double our volume each year. Once we developed our overseas market, we reached a whole other segment. People came in to see our European lines and really liked our domestic lines. At first, we thought it could hurt our domestics, but it ended up adding to our volume tremendously.

ER: You've certainly grown quite a bit since you first started out. Today, how are all of your lines categorized?
GH: We started licensing Marimekko three years ago. We also do Ruth Hornbein [girls' and boys' knit sweaters sized from infant to 6x], Yazoo [girls' coordinated sportswear in sizes 4-14], S.P.UDZ [boys' sportswear from infant to 7], Big Fish {swimwear for boys' and girls' infant to 14] and Claude Vell {boys' and girls' French-influenced sportswear in sizes infant to 14], and of course, New Potatoes {knit playwear for newborns through toddlers, boys and girls] and Sweet Potatoes [girls' and boys' coordinated sportswear sized from infant to 14]. The licenses have really added dimensions to our collections.
When we first started out, we were totally concerned with using 100-percent cotton--we'd never use polyester. But there are some new fabrications we'll consider and use now for new products. No one comes to us for the trendiest, grooviest stuff, but we're able to expand by using the new fabrications.

JJ: People have come to know us and what we do, which is playful graphics and very kid-oriented suff; we use a lot of novelty buttons, for example. It's simple--not all 'grooved out' and trendy.

ER: Where are all of your lines carried?
GH: We're carried in better department stores like Neiman Marcus, Saks, Nordstrom, Macy's and Jacobson's, and in catalogs like The Wooden Soldier. But the real backbone of our company is in the better specialty store business.

ER: Since specialty stores comprise such a significant part of your business, do you ever fear that they'll be phased out by larger stores?
JJ: I think people thought that the 'big box' types of stores would be the future, but I think we're going to swing away from that. The location of our factory outlet and headquarters is on the coolest street, Fourth Street in Berkeley. This area has really been built around us.
This trend of people discovering downtown areas is happening everywhere. In Berkeley, it's definitely continuing and expanding. It seems like people are tired of the bad service and negative attitudes that are so prevalent in the 'big box' stores. Here on Fourth Street, there are busloads of people coming to see what this is all about.

ER: What are some of the most significant changes you've witnessed--in terms of retailing, fashion and business--since beginning in the industry?
JJ: It was very different when we first started, which was really in our living room with a bunch of other people doing the same thing. It was just some women getting together and having babies and making clothing. It was a West Coast phenomenom.
To me, it seemed like a network of old guys with cigars on the East Coast had been wanting us to fail. But ultimately, we kind of started a new tradition, and specialty stores became a big part of that.
Economically, the 1980s were really a boom time, of course--particularly the mid-'80s. At that time, the most noticeable fashion trend was that you could do no wrong by putting lots of junk on a garment. The more sequins and bows, the better.

GH: Since the late 1980s and early '90s, we've seen a lot of changes. The huge Targets [and other discounters] have popped up everywhere, and better specialty stores are really struggling. But we really believe in supporting the specialty stores. We work hard on our prices to help them as much as we can, and above all, we deliver a look that's special and cute

ER: In general, what has helped set Sweet Potatoes apart in the industry?
GH: We listen to what our customers want and incorporate it into our lines. We're totally customer-service oriented, and we try to ship every order that's written. First and foremost, we try to give our customers what they ask for.
Our swimwear line, Big Fish, is now in its second year. The first year, it did phenomenally well. Then our customers asked us to put liners in the swimwear, so we did. We really appreciate customers' input; it helps us to know what people really want. We did a baby line and customers said, 'Don't give us hoods.' So we said, 'O.K., we won't give you hoods.' Whatever it is that the customers say they want, if there's any way we can make it happen-- whether changing a product that isn't working well for them or simply making one that really works--we will. Even if it's a price issue, we'll try to offer prices they want. We're always listening to what they say.

JJ: Design is another thing that sets us apart. Part of our strength is that we do things that others shake their heads over. Anna' s strength is that she has a vision for the company and also has the ability to follow it through. When we started in licensing, at first our sales reps were asking us. 'What are you doing? Why would you want to do Marimekko?' The first season, we did it domestically and it didn't work. But Anna figured a way to take it overseas and it did remarkably well. I think if you're afraid to open the door, you miss out on a lot. You have to continue to grow; it's important to change, or your customers get bored

ER: How has your friendship with one another affected Sweet Potatoes? Is it difficult to work together?
JJ: I think that's one of the things that's special about us. We're all really good friends, and it's like a family [Anna and Ginny] feel the same way about the company as I do. We're all concerned about each other, and we listen to each other. I never had any idea that it would be such a success; Anna really had that vision. I still get so excited when I see kids walking down the street wearing the clothes I designed.

ad3.jpg (21335 bytes)
ER: Looking ahead, what do you see for the future of Sweet Potatoes?

GH: We've just experienced a tremendous amount of growth. The sweaters and the French line are taking off, and last we did Big Fish. We're also moving into a brand new building.

JJ: We bought a building down the street from where we're now located. The building we're currently in just isn't cut up to accommodate our lines properly. We've always leased, so this is exciting because the new space will be our own. Basically, it gives us more open room, and we'll be in control of our own destiny. We're located in this hot retail area, and we'll keep our factory outlet at the old space. The building is about the same size as the one we have now (24,000 square feet), but we're working with the architect Denny Abrams, who designed Fourth Street in Berkeley and is now working on the WNYC building. Our showrooms will be open and tailored to better showcase our lines; the new space just has a nicer, open feel to it. The building was devastated by a fire a while back, so it's a big rehab job.
As for the future overall, we're really concentrating on overseas licensing, but at the same time, we're always looking for new projects. We never really stay still.

This article is from page 104 - Earnshaw's October 1997