1Mby1M Incubation Radar 2010: La Grande Dame

[Note: We’re launching The 1M/1M Incubation Radar with La Grande Dame today and will be featuring many more sub-$1 million revenue companies that we believe can reach the prized $1 million mark. We will be bringing the series to the attention of seed stage investors for those entrepreneurs looking for financing. And we hope it will help you connect with potential customers, partners, team members, etc. as you continue to build your business. Cheers, Sramana]

By guest author Praveen Kumar

La Grande Dame is an online boutique dedicated to high-end fashions for plus-sized women. Founded by Michelle Wood and Catherine Wood Hill in October 2008, the company was launched in April 2009. The founders say that what makes La Grande Dame unique is the dedicated customer service and fit advice it offers by providing recommendations about how clothing on the Web site fits individual body types. The company searches around the world to find the best and most beautiful, up-to-date plus-sized clothing available. It carries lines that are unavailable anywhere else in the United States and sells a wide array of clothing from lounge wear to suits and formal wear as well as jewelry and handbags.

Catherine Wood Hill graduated from the University of South Carolina’s Marshall School of Business with an emphasis in marketing in 2005. After graduation, she honed her business skills selling employee benefits to large companies through brokers. After a couple of years in sales, she moved into public relations and worked for a couple of agencies sharpening her communications skills. Catherine and her mother Michelle share a passion for fashion and a genuine desire to make women feel beautiful, regardless of their size.

The idea for the venture came when Catherine and Michelle realized that they had spent a decade scouring stores across the country (and sometimes abroad) searching for stunning clothing and accessories. These shopping trips were often marred by tears in the dressing room and unkind words from salespeople who “didn’t have anything big enough” for Michelle. Size 18 Michelle had the desire and the means to purchase fabulous designer styles, but more often than not they didn’t come in her size. Catherine and Michelle started Los Altos, California-based La Grande Dame to ensure that larger women across the country have the opportunity to purchase designer clothing that is trendy and fits their unique body types. Designers available include Ammai Umei, Anna Beck, Anna Scholtz, Betsey Johnson Intimates, David Meister, Marina Renaldi, Melissa Masse, and Not Your Daughter’s Jeans, among others.

Total U.S. apparel sales were $188 billion in 2009 and are again growing as the economy recovers. Modest estimates for women’s apparel sales are over $104 billion. Sixty-two percent of women in the United States are plus sized (size 14 or higher), resulting in a $64 billion market, which makes for a $6.4 billion market for La Grande Dame assuming that at least 10% of women shop online. La Grande Dame’s niche is the higher end consumer; the company has focused on the segment of women aged 30–55 with household income of more than $100,000. This further subsegments the market, but nonetheless, the TAM for the business is quite large.

Women sized 0–12 have a nearly infinite selection of high-end clothing that they can purchase from small, trendy boutiques in their hometowns, in department stores online or in person, and from various other online retailers. Plus-sized women do not always have this selection. La Grande Dame’s customers are looking for high-quality, fashionable products, and they want the selection that their size 6 friends can find. La Grande Dame is committed to offering women who wear a size 14 or larger a wide variety of sumptuous fabrics, fashionable designs, and accessories proportioned to fit a larger woman. The company aims to become the leading player in this category by having the best selection, best customer service, and most knowledge of the category. Women can shop by designer, body type (e.g. apple, pear, hourglass), or occasion (e.g. Big Interview, Hot Date, Corporate Casual).

La Grande Dame’s early successes have been due to aggressive PR and social media campaigns along with a sharp focus on SEO. The company has been reaching out to bloggers and trend setters to get its name out. These efforts, along with early mentions in mainstream publications including the New York Times, have brought in business. Facebook, Twitter, and the company’s own blog have also been good sources of sales.

The bootstrapped company started to earn monthly sales of $6,000–$9,000. May was the best sales month ever at $12,000. It has a burn rate of plus or minus $8,000 depending on inventory arriving, and it is approaching break even. La Grande Dame’s database includes nearly 2,000 customers, and its monthly website traffic is about 15,000 unique visitors.

Michelle and her husband David had enough confidence in the business to invest their nest egg in the inventory and technology necessary to make La Grande Dame a success. They are not actively seeking investors but are always open to discussion.

Regarding team effort, Michelle and Catherine say that mother and daughter have made the best team. Catherine is the CEO and is in charge of marketing and customer service. Michelle is the chief creative officer (La Grande Dame herself) and the creative force, responsible for photography, artwork, and the more creative aspects of marketing. The company says that at present it is fully staffed but will need to bring on more employees as it grows.

The current growth strategy company is to continue bootstrapping the business and grow organically through increased marketing, that is, continued use of public relations and social media along with more paid advertising. Referrals from current customers have also been an important part of La Grande Dame’s growth strategy thus far and will remain so.

There is no exit strategy, as Michelle and Catherine are enjoying growing the business and building their cash flow. They may consider selling in the future, but not for a long time.

La Grande Dame presented at Sramana’s 1M/1M roundtable on April 8, 2010. The recording of the session is here [27:00–42:00]. You can also find Sramana’s recap and comments from readers and roundtable attendees here. Sramana gave Catherine some advice on how to increase the conversion rates of her search engine marketing campaigns.

We look forward to Catherine and Michelle’s achieving the one million mark!

This segment is a part in the series : 1Mby1M Incubation Radar 2010