How To Turn $1000 Into A Hot Brand
Quinn Thompson launched his women's fashion label, Saint Grace (saintgrace.com), with $1,000, one type of fabric, and a vision to change the fit and feel of the T-shirt. Over the past six years his luxurious vintage-inspired knitwear company has grown each season with new styles, new customers - and new debt.
Thompson, 37, who has started businesses since he was 10 years old, self-financed Saint Grace with small lines of credit and big sums on his charge card. "I'm old school," he says. "I didn't know how to get investors." Although he was steadily growing the Los Angeles-based brand and consistently shipping product, the 90 to 120 days in turnaround time from raw fabric purchase to end - customer payment created constant cash flow problems.
Thompson applied for small-business loans but was repeatedly turned down. "Banks don't like people who don't own a home," he says. "The reality is that you come into different cash flow crunches, and your credit card may be your best friend." By 2005, Thompson carried $175,000 in debt on his cards and owed another $50,000 on a family loan. "There were some pretty dark times," he says.
Everything changed, seemingly overnight, when Jessica Simpson ("a hot property at the time," he notes) was spotted sporting a pair of Saint Grace pants. Suddenly "we were making that product as fast as we could," says Thompson.
By the end of 2005, Saint Grace was doing 50 percent of its business in those pants, and Thompson paid off all his debt. He was able to boost his salary from about $25,000 annually to more than $100,000. He also was able to buy his own home - a duplex condominium, part of which he rents out, earning additional revenue to help pay his mortgage and taxes, which run about $4,200 a month.
Last year Saint Grace, which has attracted additional celebrity fans including Angelina Jolie, Jessica Alba and Drew Barrymore, was carried in more than 500 boutiques nationwide and did $2.6 million in sales.
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