Too much glamour killed a fashion company.
The designers Mark Badgley and James Mischka spent 17 years dressing members of the Hollywood elite in lushly decorated gowns, crafting one-of-a-kind inaugural dresses for Jenna and Barbara Bush, mounting glamorous runway shows, and accumulating press that almost unanimously proclaimed them the kings of American evening wear.
They built their reputations on crystal-studded showstoppers that evoke youth and elegance. Their evening dresses have the patina of age, as if the paillettes and crystals have been salvaged from authentic flapper dresses or from a Hollywood wardrobe department.
They launched their business in 1988 and a few years later acquired financial backing from Escada, the German sportswear company known for crested blazers and knitwear festooned with gold braid. Millions of Escada dollars flowed through their small company, allowing the designers to fly to Los Angeles during Oscar week to hand-tailor gowns on actresses accustomed to personal attention and free clothes. The stars received both from Badgley Mischka. The designers, tall and good-looking, consistently showed up at significant social events and in the party pages -- their jackets softly tailored and their Orbit smiles gleaming in the twilight. Badgley Mischka was a brand with a thick, high gloss.
"We became the go-to guys for a certain kind of glamour," Mischka says.
All that razzle-dazzle, however, obscured the reality that the company was a money loser.
In the fashion industry, companies routinely boast a public image that outshines their bottom line -- and not just by a little. What is unique about Badgley Mischka is that it was a high-end evening-wear company. The designers dealt solely in entrance-making frocks with an opening price of $3,000. They made no simple, widely accessible sportswear.
"It's impossible to make any money selling couture evening wear," says Neil Brown, chief operating officer of Amsale, a luxury bridal firm that also produces evening wear. "There's such a remarkable disparity between the presence of a designer in the press and the absolute stability of the business.
"Badgley Mischka survived because they were subsidized by Escada."
For almost two decades, Badgley Mischka was counting down to failure and the industry knew it.
In July 2004, the label finally shut its doors. Escada, with financial woes of its own, put Badgley Mischka up for sale. When there were no takers, the designers were left without money to produce a spring 2005 collection. They dismissed their staff. And people in the industry talked about what a shame it all was.
"Overnight we were gone," Badgley says.
"We were going to the office and there was no one there but us," Mischka says. "Just us in a 25,000-square-foot office."
Enter a Shining Knight
Then along came Neil Cole, the chief executive officer of Candies Inc. The company was in the process of transforming its image, shifting from a manufacturer of cheap, faddish shoes to a marketing and licensing company now called Iconix Brand Group. Purchasing Badgley Mischka was a way to diversify.
The deal was sealed late last year. Now there's a shiny new business plan for Badgley Mischka, one that revives the expensive evening wear but supports it financially with a host of mundane, but lucrative, products such as shoes, eyewear and a fragrance. Most important, the company is introducing a bridge collection for spring -- a less expensive line to appeal to a broader audience.
The rise, fall and rebirth of Badgley Mischka exemplifies the deflating truth behind the frothy luxury of red-carpet gowns. There's no money in dressing Jennifer Lopez, Ashley Judd and Halle Berry. For all the attention the stars receive from magazines and TV shows, their dresses are loss leaders. Design houses such as Giorgio Armani, Oscar de la Renta and Chanel all make their money on sportswear, accessories, fragrances -- anything other than those celebrity ball gowns.
But there is a lot of money to be made dressing the average woman for her law firm's holiday party, her son's bar mitzvah or a family wedding. There's money to be made dressing plus-size women for charity galas and making them feel like the belle of the ball. And there's a lot of money -- millions of dollars, in fact -- in a single perfect cocktail dress that can magically smooth out the lumps and give a woman an hourglass figure.
The designer Carmen Marc Valvo serves as a perfect counterpoint to Badgley Mischka. Since establishing his Seventh Avenue company in 1989, he has found financial success in the evening-wear business. While Badgley and Mischka were becoming the go-to-guys for Hollywood glamourpusses -- and losing money in the process -- Valvo was quietly dressing everyone else . . . and building a privately owned empire that a spokesman says is worth $80 million. Valvo stands as proof that the right mix of glamour, accessibility and practicality can lead to profitability.
It took Mark Badgley and James Mischka almost 20 years to come to grips with what they were doing wrong and recognize what a designer like Valvo was doing right.
To revive Badgley Mischka, Iconix has laid out a three-point plan:
* Build the bridge collection into a high-volume department store business. To accomplish that, the company has hired Don O'Neill, who, as it happens, was Valvo's assistant for 10 years, to design the bridge line.
* Raise the designers' profile beyond the East and West Coasts. "I think more and more people have read about them in People, Us, not necessarily the fashion magazines, but the tabloid press," says Mitchell Hops, the new president of Badgley Mischka and a dapper Canadian in a crisp, pinstriped suit. "Certainly the Bush daughters was big."
* Package Badgley Mischka as a lifestyle company, as adept at selling a cocktail dress as a pair of blue jeans or sneakers.
The goal is to build a company with about $100 million in wholesale income. "A nice, medium-size business," Hops says.
No Investment Clothes
In 1996, actress Winona Ryder wore a pale peach, beaded, chantilly-lace gown to the Academy Awards. Her hair was styled in fingerwaves and the sophisticated dress looked like it had come from the era of the quickstep and sloe-gin fizzes. That same year, Teri Hatcher wore a hand-embossed, silver velvet gown to the Emmys. "That was our biggest media blitz," Badgley recalls. "We couldn't believe it."
"We'd always done glamorous clothes," Mischka says, "but in 1995, 1996 we got calls from a couple of girls who wanted to wear our gowns. Grunge had stopped and minimalism had stopped."
"We thought, 'How weird. They want to borrow a dress?' " Badgley says.
Hollywood's influential stylists favored Badgley Mischka because evening wear was the company's specialty. "We weren't sportswear designers with six evening gowns at the end of the collection," Badgley says. "That's what we do. We had more gowns to show them."
Their clothes have never been as revealing or as overtly sexy as those from Versace. Their gowns are likely to come in pleasantly muted pastels while Armani favors severe shades of navy, gray and taupe. Neither Badgley nor Mischka thinks of fashion as an outlet for expressionistic experimentation. They are disinclined to transform a duvet into a ball gown or to stitch a formal dress from yards of shredded chiffon that looks as though it has been salvaged from the Titanic.
Badgley Mischka frocks are not investment clothes meant to be worn for a lifetime. These are not Armani suits or Chanel jackets. These are entrance-making gowns so memorable that a woman might not want to wear the same one twice lest her subsequent entrances be accompanied by snide commentary epitomized by "not that dress again." While there are some women for whom that would not pose a problem (indeed, they'd simply buy more gowns), those quite often are the same women getting the clothes free.
"That's the fundamental fallacy of anyone who believes there's a business," Amsale's Brown says. "The most obvious customers -- celebrities and socialites -- don't pay for the dresses."
Courting celebrities also is an expensive endeavor. It used to be that getting an actress into a designer's gown was a much cheaper form of advertising than spending thousands of dollars for an ad page in Vogue. But at the level of the Oscars, Emmys or the Golden Globes, celebrity publicity is no longer free. Expenses can include first-class airline tickets for the star and her entourage, the cost of producing multiple one-of-a-kind dresses from which she can choose, or even outright cash payments.
Media attention does not necessarily translate into sales. Most socialites do not have Judd's figure, so while they might admire a dress she has worn, they won't buy it. And while a dress Badgley Mischka once made for Lopez sold out, the designers say, that's only a handful of dresses. The greatest beneficiary of red-carpet appearances are mid-priced labels that knock off designer goods. Manufacturers of prom dresses, for instance, have done brisk sales cranking out Oscar-style gowns for the discerning teenager.
Badgley Mischka had a bad -- no, impossible -- business plan. In a single season, a high-end specialty store such as Saks Fifth Avenue might order 100 pieces from Badgley Mischka. Not 100 of a specific style, but 100 pieces in total to be rationed to all its stores. (Only a tiny number of retailers can sell $3,000 dresses.) A designer simply can't sell enough of these special dresses -- at a reasonably acceptable price -- to cover the fabric, the labor, the marketing, the overhead . . . the headaches inherent in creating a runway-worthy frock.
"It's all high drama. 'I need it tomorrow. I need it special. . . .' So you're overnighting samples and cutting special items," Valvo says, of the demanding dance between a couture customer and the designers like Badgley Mischka who cater to them. "That involves a lot of cost. There's no way you can charge all that to a customer in America and have her pay for it. In Paris, a couture dress is $25,000. We're giving her a made-to-measure piece for $5,000 or $10,000."
A Lucrative Niche
Valvo, 51, is tall with the broad shoulders and chest of someone who knows the difference between a bench press and a lat pulldown and executes both moves on a regular basis. He grew up in New York's Westchester County and both his parents worked in the medical field. He has a closely shaven head, an amiable demeanor and on a July morning is dressed in black trousers, a striped shirt, black leather slides and has a blue tape measure slung around his neck.
He doesn't have a degree in business -- his background is in fine arts and he also attended Parsons School of Design -- but when founding his company he made a particularly smart financial decision. Because he was financing it with his own money -- $15,000 -- he needed to make clothes that not only would sell, but would immediately turn a profit. In the late 1980s, he realized that a woman searching for an evening gown had two choices. She could go to a designer and spend thousands of dollars or she could go to what department stores call "special-occasion dressing" and spend a few hundred bucks on a dress that made her look like a bridesmaid.
Valvo saw a lucrative niche. He made dresses that sell for about $800. They are an indulgence for a budget-conscious woman, but she receives a lot of panache for her money. And for a woman accustomed to spending $3,000 on a single gown, Valvo's dresses are a bargain, allowing her to flesh out her social season wardrobe without spending a fortune.
Valvo was catering to homemakers and professional women when celebrities started buying his clothes off the rack, drawn in by his aesthetics and palatable prices. The actress Julia Ormond was the first big star to buy one of his gowns, a white, embroidered satin dress cut on the bias.
Then a calamity occurred of proportions that could get a celebrity ridiculed in People and get a designer blackballed from the Upper East Side to Beverly Hills. Paula Zahn, Vanessa Williams and Ormond were all photographed wearing the same dress.
Valvo knew he'd lose the celebrities if he didn't create a more exclusive, and ultimately more expensive, segment of the collection. In 1996, he added gowns that sell for thousands of dollars. And in the process, he turned the fashion industry's conventional wisdom -- start with a runway vision and let it trickle down to the masses -- on its head.
"I had a collection, so I could afford to have a couture line," he says. "Couture sells, but it's not profitable. You're spending half a million dollars to put on a runway show. How can you sustain that?"
Valvo struggled to gain respect from the industry as a high-end designer. To some degree, it remains a challenge. No matter that Catherine Zeta-Jones, Kim Cattrall, Beyonce Knowles and Queen Latifah wear his clothes. When it comes to prestige within the insular world of New York fashion, his commercial successes -- all those money-making mother-of-the-bride dresses -- hang around his neck like an albatross.
But Valvo has a lot to brag about. So to tell his story, he gets comfortable in the ivory-colored, private salon within his 23rd-floor showroom in the Garment District. Entering this room is like stepping into a cloud. The cabinets are white. So is the conference table. Translucent white draperies cover expansive windows. A mirror the size of a small garage door leans against a wall. This is where celebrities -- and other pampered customers -- come to try on clothes.
His dresses are known for their fit. "I used to have three fit models because even if the bust measures the same, a woman can be big across the back or be all out front," he says. "Nothing went into production unless it fit decently on all three. I did that for three or four years. In the long run, it paid off for me. Now, I only have one."
He has just launched a line of swimsuits that, like his dresses, have been constructed from the inside out. They have hidden support for the breasts and tricks to make the waist narrower, the result of an almost architectural process that took six months to get right.
Valvo also can show off the latest variation on his "shutter dress," a bias-cut, ribbon-pleated dress -- sometimes long, sometimes short, sometime lined in lace, sometimes not -- that has accounted for more than $4 million in sales. The style has been in his collection for five years and will be in it for years to come.
Valvo also designs a plus-size collection for Saks Fifth Avenue. "Queen Latifah, that's the inspiration. She's totally Rubenesque . . . gorgeous and Rubenesque," he says. "It's a couple-million-dollar business. It's nothing to sneeze at."
When he visits stores -- "Give me any event and I'm there," he says -- his plus-size customers converge. "They yell at you," he says. They want more options and Valvo represents a direct line to Seventh Avenue. He is one of the few luxury designers to respond to their needs. Can't he tell his colleagues to accommodate the large ladies, too?
Badgley and Mischka, both 44, have a tendency to dress alike -- not in matching attire, but in the same neatly pressed, country club style. They have military posture and perfect hair.
They are partners professionally and personally and both were born in the Midwest. Mischka grew up in Southern California and Badgley in Oregon. They met at Parsons, from which they graduated in 1985. Mischka worked in menswear with Willi Smith and Badgley was a womens-wear designer at Donna Karan. Eventually they decided that if they were going to work long hours designing, it might as well be for their own label.
They plodded along as most new designers do, making ends meet however they could and trying to drum up customers and media interest. The designers regularly joke that in the beginning most people assumed "Badgley Mischka" was an elderly Russian seamstress. Once folks knew the label was composed of two men, no one could remember who was who -- a confusion that continues because the two are almost always together. Mischka is the blond who comes across as an introvert, displaying a palpable uneasiness when confronted with a microphone or a reporter's notepad and pen. Badgley has darker features and salt-and-pepper hair. He displays more ease discussing himself and the company, but he is no less cautious about each word.
This spring, Bergdorf Goodman hosted Badgley Mischka's first public appearance since the company was resurrected. The designers stood formally among a small group of shoppers and well-wishers as models strolled around the intimate fourth-floor salon. The clothes for fall 2005 had been inspired by an Irving Penn photograph of a Charles James dress and the gowns were dusky shades of pink and pale blue sprinkled with antiqued beads. The models looked alarmingly thin -- virtually breakable -- away from the grandeur of a runway where they are surrounded by their own emaciated kind instead of women of more modest height and generous girth.
The designers, reserved and stiff and wearing coordinated suit jackets, pointed out their favorite pieces amid a soundtrack of murmuring guests who clutched flutes of champagne and fingered $3,000 caftans, jeweled and stitched from Indian silk. A heavyset gentleman, who'd caught no one's attention, suddenly raised an anti-fur placard and began shouting about the slaughter of animals in the name of fashion.
In an example of emphatic inaction, the room went silent and no one moved. The protester yelled on until he was finally and calmly led away. A woman sniffed, "He was wearing leather shoes. Did you see that? Stupid man." And everyone went back to champagne, expensive frocks and stiffness.
There is a lot of hand-holding and reassuring in evening-wear sales and during these personal appearances. Oh, you look so slim! Oh, you look so elegant! Yes, yes, of course you can show a little skin! Badgley and Mischka are warm but not chummy. They do not play the role of fashion-savvy confidants.
Some women will insist on wearing a specific designer's evening wear. But most women are not loyal to a brand. "With evening wear, you don't buy a brand," Valvo says, "you buy it because you look good in it." A designer is selling a dream, Valvo says, not the prestige of his name.
Valvo knows that peddling dreams can be a daunting and frustrating proposition. Away from the star circuit of thoroughbred figures, these Cinderella gowns must accommodate lumps and bumps, hips and tummies, and small, unyielding budgets.
Badgley and Mischka are prepared to step out of the realm of Bergdorf and Rodeo Drive, where their most popular size, they say, is a 10, and get out there in Middle America, in the South, in the malls and wherever women need formal gowns, cocktail dresses and fancy suits. They are braced to meet the average American woman shopping for weddings, holiday parties and the one charity ball she will ever attend. On average, that customer is a size 14.
"We have a couple already," Mischka offers.
"We can embrace that," Badgley says. "It'll be a challenge."
That woman can be as demanding as a starlet. She wants personal attention; she frets about her rear view. But the only place her photo is likely to appear is in the family album.