Many thought the Manhattan fixture was just another socialite fashion designer. She has proven them wrong
Women of means have long been lured to Madison Avenue by the high-priced boutiques of Prada, Herm?s, and Chanel. Later this year, those synonyms for luxury will be joined by a brand selling decidedly more affordable clothes when Manhattan socialite Tory Burch brings her eponymous line to the neighborhood. A risky move? This is not her first time bucking the odds. "There were a lot of raised eyebrows when I started this company," says Burch. "Many thought it would be a vanity project."
Burch's success has stifled most accusations of dilettantism. People close to the privately held company say it will sell $300 million worth of goods in 2010, about a third more than last year. To speed that growth, Burch has opened stores in Manila and Tokyo, and over the next three to five years she aims to open 100 more worldwide.
Burch, 43, studied art history at the University of Pennsylvania and spent the '90s doing marketing and public relations for Ralph Lauren and Vera Wang by day, and making the scene by night. Along the way she realized many big brands ignored stylish women unless they could pay $1,000 for a handbag.
At the time, Burch was married to Christopher Burch, a financier who now runs J. Christopher Capital. (They are divorced, but he remains an investor.) He'd learned the rag trade by launching a preppy sportswear line called Eagle's Eye in the '70s, which he later sold, and believed his wife's observation could become a moneymaker. Shortly after Tory began experimenting with designs in their apartment, she received a visit from Robert Burke, then Bergdorf Goodman's fashion director. "There are few times when in 10 minutes you know something is going to be a big success," says Burke. "She'd thought it through, soup to nuts."
In February 2004, Burch opened her first store in Manhattan's Nolita district. On opening day her friends and their friends mobbed the place. Word spread through gossip and fashion magazines, and soon her signature tunic top caught the attention of Oprah Winfrey, who, of course, told America all about it. Today Burch has 25 namesake stores, and her clothes are sold in 450 other locations.
Neiman Marcus fashion director Ken Downing describes her look as retro cool with a modern twist, adding that she understands what regular women want; her $450 handbags and $195 sunglasses can be a revelation for those unprepared to pay twice as much for snootier labels. "That's what women are relating to," Burch says. "There's resistance to excess."
One customer adds a note of caution. "It's nice to have one or two pieces," says Jennifer Prentice, who sells medical equipment in Minneapolis. "But if you have a bunch, you scream 'Tory Burch,' because she does use that medallion logo a lot."
Burch's expansion plans are bold, but she says her company is debt-free, profitable, and generating enough cash flow to fuel her growth. People close to the company say the Burches and their investors last year sold a 20% stake to Tresalia Capital, a firm run by an heiress to Mexico's Corona beer fortune. "Every brand has ups and downs, and I am sure she will, too," says Peter E. Nordstrom, the merchandising chief at Nordstrom. "But her instincts are good."