Leather Makers Saddle Up
November 05, 2007
Mulholland Brothers gets a warm welcome, as Dooney & Bourke finds its business swelling
By Leo Jakobson
The withdrawal of Coach from the special markets business left a vacancy that a number of fine leather goods makers have been happy to step into. And according to a couple of those companies that exhibited at The Motivation Show in Chicago in September, business is booming.
"Our sales tripled in the first few months" following Coach's abrupt withdrawal earlier this year, says Mary Kate Chase of Premium Works, the exclusive distributor in several Middle Atlantic states of Dooney & Bourke, a Norwalk, Conn.–based maker of leather handbags and travel bags. "A lot of people that can't get Coach come to Dooney & Bourke. They are doing a great job of filling Coach's shoes." Dooney & Bourke's handbags retail from about $150 to $600, roughly the same range as Coach's.
At the same time, Dooney is taking care to "make sure when it addresses the Coach vacancy, it does not cannibalize existing customers," says Noah Christensen, a spokesman for Culver City, Calif.–based Marketing Management Services Corporation, Dooney & Bourke's national representative in special markets. "We have seen a very significant increase in the amount of volume, and we were busy before Coach left. We were becoming higher profile before Coach left."
Another luxury leather goods maker that is benefiting from Coach's absence is San Francisco–based Mulholland Brothers, which exhibited at The Motivation Show for the first time this year. David Dow, the firm's president, was very happy with the 240 qualified leads his firm garnered, although the void Coach left was just a fortuitous coincidence, he adds. "We are excited by the response to our entry," Dow says.
In fact, "there are slices of the incentive market where we have lots of experience," Dow says. This "was usually focused on [high-end] gifts-with-purchase," he adds, noting that Jaguar has given Mulholland Brothers bags to buyers, as has Ford with its Eddie Bauer Edition SUVs. "We also have a robust corporate gift business, for top customers and top-performing employees," he says, noting the company has worked with Ritz-Carlton, Four Seasons, Aston Martin, Bentley and most major golf courses, along with Fortune 500 companies like General Motors. In fact, much of Mulholland Brothers' previous incentive business came from senior corporate executives who were impressed enough by a personal bag to have them used in a corporate gift program, Dow says.
"We decided last year we should learn more about the incentive business," he says, noting that the firm is still learning about points-based, online performance incentive programs, as well as the ins and outs of the special markets distribution system. At the same time, Dow notes, they are pursuing this aggressively. The company is overhauling its Web site to better serve the incentive market, adding capabilities like corporate portals and the acceptance of gift cards, which should be in place before Thanksgiving, he says. Mulholland Brothers will also introduce its own gift cards.
Dow believes Mulholland Brothers is well suited to incentives because "we are a very nimble, flexible company." The firm can custom-match corporate colors, turn orders around quickly, and "we can ship five hundred bags to Scotland for a corporate retreat or drop ship them individually to all the recipients' homes." It will also work to hit price points, Dow says, noting that several potential buyers he met at The Motivation Show said they liked the company's popular leather-trimmed canvas tote, but needed to get the price point down to $50 from $100. So, he brought up the possibility of lowerint the price by making it with a different material, like linen.
Mulholland Brothers' canvas and cowhide bags and briefcases start at roughly the same price point as Dooney & Bourke's, going up a couple of hundred dollars higher on some large items. But the 20-year-old, privately owned firm has two lines that go well beyond those price points. Its butter-soft but very tough deerskin bags run roughly $500 to $2,000, while its American alligator-skin bags—available in a number of very bright colors as well as basic black and brown—start at around $10,000 and go up to about $16,000. The latter are custom-made and would thus require some lead time. Like the deerskin bags, they are handmade in the United States. Other parts of the line are made in Paraguay and China, so Mulholland Brothers can meet most price points.
Both companies have sizable accessory collections that are popular as corporate gifts. "There is a strong cry in this industry for leather gift items that can be branded," says Dooney's Christensen. "Some we were selling already, but some we designed specifically for this market," he adds, noting that those items are new. Mulholland Brothers' one- to six-bottle wine carriers ($150-$525) are a popular corporate gift, and, of course, its alligator wallets can be had for around $600. But it also has plenty of items in the $10 to $40 range, starting with $10 luggage tags, Dow says.
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