Abe Chehebar: A life story told in a legacy of handbags

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<v Emily Blumenthal>Hi and welcome to the Handbag Designer 101 podcast with your host, Emily Blumenthal, handbag Designer Expert and Handbag Fairy Godmother, where we cover everything about handbags, from making, marketing, designing and talking to handbag designers and industry experts about what it takes to make a successful handbag.

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<v Emily Blumenthal>Welcome, Abe Chehebar from AHQ to Handbag Designer 101, the podcast, so excited to have you legend within the handbag industry.

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<v Emily Blumenthal>How many years have you been at Handbag's Abe?

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<v Emily Blumenthal>Talk to me.

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<v Abe Chehebar>First of all, it's a pleasure to be here.

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<v Abe Chehebar>Thank you for having me.

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<v Abe Chehebar>I've been in the handbag business for about 40 years now.

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<v Emily Blumenthal>So you were basically five years old when you started.

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<v Emily Blumenthal>You just died right out of kindergarten.

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<v Abe Chehebar>Thank, you for the compliment.

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<v Abe Chehebar>Thank you for the compliment.

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<v Abe Chehebar>Yeah, I was about 22 years old when I started and a lot has changed over the years.

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<v Abe Chehebar>We've learned a lot, just a little bit and it's been an exciting journey.

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<v Abe Chehebar>I gotta say I love the business.

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<v Abe Chehebar>How did you get in?

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<v Abe Chehebar>So my dad had a small shop on Broadway 30th Street called Giselle Handbag Shop and it was a mom and pop little you know shop selling handbags.

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<v Abe Chehebar>And I worked for him one summer and did not go to college.

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<v Abe Chehebar>I went straight to work, learned the business and then opened up my own business about two years later and started doing private label handbags for Was that weird.

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<v Emily Blumenthal>Did he still have his?

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<v Emily Blumenthal>Did he still have his shop?

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<v Abe Chehebar>Well, you, were doing that he did.

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<v Abe Chehebar>He was very proud.

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<v Abe Chehebar>No, not at all.

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<v Abe Chehebar>No, not at all.

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<v Abe Chehebar>We always had a family mentality when it came to business, so it wasn't like mine or his, his or mine, it was all one, you know.

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<v Abe Chehebar>So the initial launch of that business was a rocky start.

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<v Abe Chehebar>You know was a lot of learning curves, but eventually we found our way and were able to generate some nice business.

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<v Abe Chehebar>Probably probably able to retail is like in those days Montgomery Ward I don't know if you know who those are or a venture store in St Louis.

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<v Abe Chehebar>We had a lot of regional retailers that are no longer around.

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<v Abe Chehebar>That, you know, added it up to a lot of business and Did you sell to Marshall Fields?

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<v Emily Blumenthal>because that was like forget it getting in there.

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<v Abe Chehebar>We sold to Marshall Fields before they were bought by Target.

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<v Abe Chehebar>And yeah, you know, in those days there weren't too many handbag companies out there offering power.

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<v Abe Chehebar>It was like today.

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<v Abe Chehebar>You know brands were almost non-existent in handbags.

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<v Abe Chehebar>That started really about 30 years ago when brands started to come into the picture and there was a different time.

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<v Abe Chehebar>You know every era in handbags has its own beauty and its own, you know, let's say, culture.

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<v Abe Chehebar>And every time, you know when brands started to get introduced into the market, that was an exciting time in the market and you know we started taking licenses and you know, now you have your own identity.

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<v Abe Chehebar>It was a nice evolution to the business and you know to where we are today, where you know brands is a major part of the handbag business, whether it's, you know, luxury, moderate or budget brands are very important in the business.

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<v Abe Chehebar>The brand is her ID.

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<v Abe Chehebar>You know my dad always say every lady needs a handbag and that's her ID.

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<v Abe Chehebar>You know when she carries that bag she's kind of saying she is more or less you know, because nothing else she's wearing really says what she is, unless it's a logo, you know sweatshirt or something.

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<v Abe Chehebar>But you know the handbag usually is her ID and you know that's why Louis Vuitton does the business they do and that's why you know Gucci does the business they do and Prada and all these major luxury brands are.

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<v Abe Chehebar>It's a whole social economic agenda.

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<v Abe Chehebar>That's very scientific and you know the customer has an emotional attachment to the brand and you know, once you tap into that, then you have a captioned audience which you know creates sales and so on.

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<v Emily Blumenthal>Okay, I have questions that are overrunning if because your company has had iterations and so forth.

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<v Emily Blumenthal>You know it's funny being Garmento offspring.

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<v Emily Blumenthal>As you know, my this T-shirts vintage.

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<v Emily Blumenthal>At this point my dad always said like it should never be about overhead.

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<v Emily Blumenthal>Now, mind you, he sold great goods and he was the middleman, he was a converter, so it was never about having a beautiful office and I grew up going to the Garment Center as a child and you know that's where I heard cursing in a way that I thought was only in the movies and so forth, and I had filed swatches and so forth.

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<v Emily Blumenthal>And my dad's office, which you know, as you understand, it's also a family business and you know my aunt was there, my grandma was there, my sister was there, my mom was there I think I was the only one who didn't work there.

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<v Emily Blumenthal>The office was dingy and you felt like almost like you were in a factory and it wasn't until I started my own handbag line and started going into showrooms that I didn't think existed in New York City.

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<v Emily Blumenthal>I thought if you're doing sales, you're not supposed to be in your own office.

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<v Emily Blumenthal>You carry your own product to the retailers, so forth.

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<v Emily Blumenthal>And I've been to several of your offices and they are lux and beautiful, and what do you think about that?

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<v Emily Blumenthal>I mean, this is like a controversial topic, like overhead.

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<v Emily Blumenthal>What are your thoughts?

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<v Abe Chehebar>Right.

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<v Abe Chehebar>So you know they say you take a diamond ring and put it in a paper bag and you take that same diamond ring and put it in a velvet box and it has a different appearance completely.

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<v Abe Chehebar>Yeah, so I think presentation is very important.

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<v Abe Chehebar>We try to inspire the retailers with the way we display our products so that they can get inspiration as to how to display to their stores.

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<v Abe Chehebar>So we think about that a lot.

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<v Abe Chehebar>We try to make our showrooms look like the retail environment where the customer, as I said, can get inspired and like what they see.

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<v Abe Chehebar>We're sticklers when it comes to, you know, every bag's got to be in the right place, in the right you know location and the right colors, with the right matching colors or whatever the case may be.

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<v Abe Chehebar>You know, I think it's very important to have a showroom that you know.

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<v Abe Chehebar>This is our one retail store, this is our one location, you know.

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<v Abe Chehebar>So the showroom is the fair hub.

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<v Abe Chehebar>That's our main attraction for retailers to come up and like what they see, hopefully.

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<v Abe Chehebar>So yeah, it's.

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<v Abe Chehebar>I think it's very important to have a showroom that is sparkling and well designed and looks the part and, like I said, you know, and it's a casing for beautiful product.

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<v Emily Blumenthal>No, it's just fascinating to me, because the contrast being an independent designer, where you're essentially schlepping around your product in a giant suitcase and taking them out and making sure they're, you know, stuffed and then unstuffed and then setting them up for buyers, versus having a showroom, is so very different right.

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<v Emily Blumenthal>So, I would love to talk to you about licensing Now.

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<v Emily Blumenthal>Licensing and private label.

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<v Emily Blumenthal>So that is essentially your bread and butter, right?

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<v Emily Blumenthal>So does HQ, because I know you've gone in and out of having your own line.

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<v Emily Blumenthal>Do you currently have your own brand right now?

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<v Abe Chehebar>So what's interesting is, about 50% of our business is private label, where we designed for other people's brands.

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<v Abe Chehebar>So, for example, certain retailers have their own in-house brands.

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<v Abe Chehebar>So we learn those brands.

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<v Abe Chehebar>They provide us with DNA of the brand and information about the brand and then we come back and present for that brand.

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<v Abe Chehebar>That's about 50% of our business.

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<v Emily Blumenthal>That's a competitive business, isn't it to try and get that?

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<v Abe Chehebar>It is competitive.

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<v Abe Chehebar>It is competitive for sure.

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<v Abe Chehebar>But you know when they place an order it's directly to the customer.

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<v Abe Chehebar>You're not taking any risk.

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<v Abe Chehebar>It's a low-risk business once you get the order.

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<v Emily Blumenthal>It's kind of the dream client, isn't it?

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<v Abe Chehebar>Right and the orders are pretty large.

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<v Abe Chehebar>You know, depending on the retailer.

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<v Abe Chehebar>A retailer like Zara can place an order for 800,000 units of one bag in one color.

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<v Abe Chehebar>Take it, pay you and you're done.

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<v Abe Chehebar>So, yes, you are working on lower margin, but it's a much lower-risk business as opposed to buying inventory for your brands and then, you know, selling it into the retail community.

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<v Abe Chehebar>It does have a little bit of risk.

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<v Abe Chehebar>You know if you guess wrong on a color then you're going to have to dump it.

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<v Abe Chehebar>If you know you pick several silhouettes that, let's say, are not trending, then you have to.

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<v Abe Chehebar>You know you got to sell the goods at a lower markup.

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<v Abe Chehebar>So the off-price, the private label business, is a secure business.

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<v Abe Chehebar>That is no risk.

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<v Abe Chehebar>The branded business is a business that people love.

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<v Abe Chehebar>It's a great business but on the same token it requires carrying inventory and you know working the game.

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<v Emily Blumenthal>How do you evaluate licenses, the ones that you take on Like?

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<v Abe Chehebar>Right, that's a great question.

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<v Abe Chehebar>That's a good question.

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<v Abe Chehebar>So we have several criteria when it comes to evaluating a brand.

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<v Emily Blumenthal>Have you said no to some.

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<v Abe Chehebar>Oh, we say no every week.

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<v Abe Chehebar>I mean, we get offered brands on a regular basis and again, you know, there's not too many players in the market today that are able to, you know, bring brands to life and distribute them, the finance and so on and so forth.

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<v Abe Chehebar>So there's an abundance of brands out there.

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<v Abe Chehebar>We get offered brands on a regular basis.

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<v Abe Chehebar>Our criteria, first and foremost, is the recognition of the brand.

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<v Abe Chehebar>Does it need explaining?

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<v Abe Chehebar>If it needs explaining, we're not interested.

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<v Abe Chehebar>Number one.

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<v Abe Chehebar>Number two is there an audience for the brand?

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<v Abe Chehebar>Is there a retailer supporting the brand?

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<v Abe Chehebar>Is there a retailer that is committed to the brand Is another very important criteria.

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<v Abe Chehebar>And the third criteria is whether or not that brand is being covered by other brands in our own roster of brands.

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<v Emily Blumenthal>If we have something similar right.

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<v Abe Chehebar>In other words, if we have something similar let's say, french connection is a junior brand so if somebody comes along with another junior brand, we look at it and say, are we taking, you know, one plus one and making it equal one and a half?

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<v Abe Chehebar>you know we want we want one plus one to equal three, you know.

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<v Abe Chehebar>So we definitely have a very specific criteria when evaluating brands.

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<v Abe Chehebar>We are in the process of looking at something on a more serious level at the moment Hopefully we'll make an announcement soon and there's a lot of opportunity out there with brands.

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<v Abe Chehebar>And also, you don't want to take on too much.

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<v Abe Chehebar>You want to be able to focus.

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<v Abe Chehebar>You want to make sure you're able to capture the DNA, the brand, properly.

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<v Abe Chehebar>You want to make sure you create a detail or some kind of icon for the brand that ends up being a detail for the brand, similar to, let's say, the red bottom on the shoe of Lubaton.

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<v Abe Chehebar>So Lubaton shoes, let's say, has the red bottom.

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<v Abe Chehebar>He has that DNA detail that you know it's his shoe.

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<v Abe Chehebar>For us to come up with a detail that's, you know, specific for that brand, that people will look at a year from now and say, oh, that's the French connection bag, that's what we call cracking the code, and we do that very well.

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<v Emily Blumenthal>How do you deal with the idea of resuscitating a brand that may be coming back from the dead?

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<v Emily Blumenthal>It's the brand, or the license per se is available at a lower price.

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<v Emily Blumenthal>It had its heyday, you know.

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<v Emily Blumenthal>Perhaps it had been ruined or tarnished by a couple other licensing manufacturers.

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<v Emily Blumenthal>Did you see that as an opportunity, or you see that as too much heavy lifting and therefore it's not worth it?

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<v Abe Chehebar>Yeah, I mean, I really think it depends on the brand.

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<v Abe Chehebar>I'd also depend.

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<v Abe Chehebar>We also look at what's going on with the brand and other categories like apparel, footwear, what's going on with the brand and footwear, what's going on in the brand and apparel, other categories that relate to accessories, and if there's has revived or came back, let's say it could be interesting.

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<v Abe Chehebar>But in most cases those are, you know, hit runs.

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<v Abe Chehebar>We like longer term businesses, brands that are able to grow over the years and build, you know.

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<v Emily Blumenthal>How do you handle and I know, being an independent designer who's had their brand licensed I had a very unique situation where I was an onsite licensee I know you've dealt with that too historically taking on a brand that was run and owned by an independent designer.

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<v Emily Blumenthal>Do you see that as something you would do again or it was too much heavy lifting?

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<v Abe Chehebar>Well, it depends on the designer and their vision and their outlook and, so far as they could take their business or their aesthetic, there are many talented designers out there that have potential for major growth.

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<v Abe Chehebar>The great thing about the handbag business is that it's a very diverse category.

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<v Abe Chehebar>It's a category that has room for innovation and newness.

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<v Abe Chehebar>People like newness.

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<v Abe Chehebar>They're like what's next, what's new, so there's always opportunities for new designers to come into the market, and there are designers out there, I said, that have a tremendous vision for unique product.

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<v Abe Chehebar>Look at these brands that came out of nowhere, like Mansoor Garbielge.

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<v Abe Chehebar>That team had a great, very good, clear vision as to what they wanted to do.

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<v Abe Chehebar>They were all about understated luxury and they hit a market.

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<v Emily Blumenthal>Right place at the right time, with the right product, exactly exactly.

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<v Abe Chehebar>So you look at that and say there's always opportunity for newness or new ideas in the handbag market.

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<v Abe Chehebar>So that's what I think.

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<v Abe Chehebar>What makes it exciting about being in the business is watching all these new trends, development details that are coming out, and so, yeah, there's definitely opportunity for newness on a regular basis in the marketplace in handbags.

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<v Emily Blumenthal>What do you think about this and I'm putting the quotes that people can't see a vegan leather.

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<v Emily Blumenthal>I mean, personally, I think it's a crock.

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<v Emily Blumenthal>I think and the wild thing is that there are a lot of new designers who speak about it proudly.

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<v Emily Blumenthal>It's vegan leather and I've been in the business not as long as you, but I've been through it enough to know the iteration of what it used to be called PVC and now it's called PU and now it's called vegan leather.

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<v Emily Blumenthal>It's not vegan and it's not leather.

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<v Emily Blumenthal>It is chemically made.

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<v Emily Blumenthal>It's still not good for the environment.

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<v Emily Blumenthal>We had an interesting guy who goes by Tanner Leatherstein, who is the Turkish guy he's amazing who rips apart the bags and then sees whether or not they're real, if they're worth the money, and he actually has his own handbag brand which not everybody knows, and he has his own handbag factory in Turkey, a leather factory which not everybody knows, and actually stating that if Tannery's are done the right way, they're actually better for the environment than chemically made quote unquote vegan leather.

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<v Emily Blumenthal>What are your thoughts on that?

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<v Emily Blumenthal>Because, honestly, selling off price and off price are the lower price brands.

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<v Emily Blumenthal>They're still demanding leather at a fraction of a cost of what leather actually should cost.

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<v Emily Blumenthal>So can you talk a little bit about all that?

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<v Abe Chehebar>It's a great topic.

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<v Abe Chehebar>Sustainability is a big, big word.

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<v Abe Chehebar>The term vegan leather, I think, is a sexy way to say that it's PU or PVC.

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<v Abe Chehebar>It's whitewashing.

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<v Abe Chehebar>I agree with you.

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<v Abe Chehebar>It's a little it's greenwashing?

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<v Abe Chehebar>Yeah, I agree with you.

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<v Abe Chehebar>It's a little ambiguous.

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<v Abe Chehebar>We do not put vegan leather on our handbags.

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<v Abe Chehebar>It is what it is.

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<v Abe Chehebar>But in regards to sustainability, there are today many materials in PU that are made from plastic bottles.

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<v Abe Chehebar>So the provenance of where the material's made is, in some cases, better for the environment, depending on the material.

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<v Abe Chehebar>But a big trend in the marketplace that we're seeing right now is PU PVC being made out of plastic bottles versus plastic.

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<v Emily Blumenthal>Do you speak to the factory about that?

00:15:01.937 --> 00:15:08.596
<v Emily Blumenthal>Are you like, hey guys, because you're dealing with factories and dealing and they're producing things on a large scale.

00:15:09.692 --> 00:15:10.976
<v Abe Chehebar>Of course, of course.

00:15:10.976 --> 00:15:13.557
<v Abe Chehebar>So sustainability is a global agenda.

00:15:13.557 --> 00:15:15.255
<v Abe Chehebar>It's not just a USA agenda.

00:15:15.255 --> 00:15:27.774
<v Abe Chehebar>It's also the factories and material factories in China, in Asia, are very, very attuned to it and they are developing and testing and doing, and they did come up with some really interesting materials over the past year.

00:15:27.774 --> 00:15:33.476
<v Abe Chehebar>I would say that are materials made out of plastic water bottles, so which kind of helps the environment.

00:15:33.671 --> 00:15:38.514
<v Abe Chehebar>But, having said that, there's a big trend that's emerging in the market today, which is called DPP.

00:15:38.514 --> 00:16:02.138
<v Abe Chehebar>Dpp is digital product passport, which is a QR code that's instilled in the bag or the garment that communicates to the customer exactly what components are made within that bag, where it was made, how much of what materials are within that bag, and that can go all the way through to discarding the bag and how it's discarded.

00:16:02.138 --> 00:16:04.437
<v Abe Chehebar>All done through this QR chip.

00:16:04.437 --> 00:16:06.336
<v Abe Chehebar>That's called a digital product passport.

00:16:06.336 --> 00:16:10.956
<v Abe Chehebar>Digital product passport is a process that we're looking into as well.

00:16:10.956 --> 00:16:17.818
<v Abe Chehebar>Several companies are I know coach is doing it their way ahead of the market with this DPP digital product passport.

00:16:17.818 --> 00:16:19.595
<v Abe Chehebar>Thank you for being there.

00:16:20.110 --> 00:16:25.938
<v Abe Chehebar>Yes, but it is a interesting thing because, you know, transparency is a value asset today.

00:16:25.938 --> 00:16:39.034
<v Abe Chehebar>When selling product, you want to be honest with your customer and DPP shows them everything about that product and all the components and where it was made and so on and so forth that they can look up through the QR codes on their computer screen.

00:16:39.034 --> 00:16:47.071
<v Abe Chehebar>So we're seeing that as an important trend and especially when you're using, you know you're paying extra to use materials that are environment friendly.

00:16:47.071 --> 00:16:53.312
<v Abe Chehebar>You want to talk, you're warned about that, you want to let your customer know you are spending extra money for the sake of the environment, right?

00:16:53.312 --> 00:17:07.153
<v Abe Chehebar>So we're seeing a big trend in that right now, which is kind of exciting, and I think it will separate companies apart that go ahead and, you know, communicate transparency to the customer, to you know, the end user, and do more business because of that.

00:17:07.560 --> 00:17:08.545
<v Emily Blumenthal>I totally agree.

00:17:08.545 --> 00:17:14.404
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00:17:14.404 --> 00:17:20.271
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00:17:20.271 --> 00:17:24.931
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00:17:24.931 --> 00:17:33.549
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00:17:33.549 --> 00:17:40.690
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00:17:40.690 --> 00:17:50.107
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00:17:50.621 --> 00:18:01.210
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00:18:01.210 --> 00:18:07.851
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00:18:07.851 --> 00:18:17.949
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00:18:21.809 --> 00:18:26.192
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00:18:38.232 --> 00:18:55.125
<v Emily Blumenthal>It's so interesting because Isaac Mizrahi's movie I used to show to my students on Zipped and I mean he is obviously a brand unto himself now at this point, as he has been for a long time.

00:18:55.681 --> 00:18:59.715
<v Emily Blumenthal>And then Terry Agans wrote this book, the End of Fashion.

00:18:59.715 --> 00:19:16.032
<v Emily Blumenthal>It's her first book I think not her second, who used to be head of fashion at the Wall Street Journal and it's about this whole construct, about back in the day when designers were the ones who dictated what the customer should and would buy, right.

00:19:16.032 --> 00:19:38.666
<v Emily Blumenthal>But once the internet came about and being able to pull the curtain away like the Wizard of Oz and actually seeing what's going behind the scenes, brands then started to develop a responsibility, and especially now that customers can call out brands if they're not doing the right thing, so much so that customers are now the ones who are theoretically dictating trends.

00:19:38.666 --> 00:19:44.164
<v Emily Blumenthal>Right, when you're buying denim, it's stressful, Like jeans.

00:19:44.164 --> 00:19:50.069
<v Emily Blumenthal>It's no longer a skinny jean, a mom jean, a high waist, a low waist, Like basically everything is still on trend.

00:19:50.069 --> 00:20:01.846
<v Emily Blumenthal>Do you think it's still so much that the customer is dictating these trends in terms of sales, or do you think the brand is still very much part of that In terms, especially in handbags?

00:20:03.549 --> 00:20:04.051
<v Abe Chehebar>Great question.

00:20:04.051 --> 00:20:14.732
<v Abe Chehebar>So there's no question that today the customer is a lot more educated and a lot more opinionated than ever before, and the reason for that, of course, is the internet.

00:20:14.732 --> 00:20:17.083
<v Abe Chehebar>They see everything, tiktok.

00:20:17.083 --> 00:20:25.549
<v Abe Chehebar>They're getting so much information that creates for them to have their own opinion and their own direction and their own likes.

00:20:25.549 --> 00:20:33.700
<v Abe Chehebar>So, to answer your question, you're right on the customer definitely today has a very strong opinion and say in what they want and what they don't want.

00:20:33.700 --> 00:20:51.733
<v Abe Chehebar>But having said that, it's our job as a brand, or the brand owner's job, to communicate and lead that customer into what is trending and why it's trending and why it works with various outfits that are also trending, and so it's all kind of connected.

00:20:51.733 --> 00:21:12.720
<v Abe Chehebar>But at the end of the day, there's no question that leading the customer is a very important strategy and having them get inspired by a various product, and you try to communicate what inspiration, that, where it came from and why it's there and where it's going, and so on and so forth.

00:21:12.720 --> 00:21:15.476
<v Abe Chehebar>So I think it's a combination of both.

00:21:15.942 --> 00:21:33.359
<v Emily Blumenthal>Do you think and I know we were talking about this before we started recording about your licenses per se and taking them on and the power of off price you had said that you are taking on these brands knowing full well that they need to be sold at a certain price point.

00:21:33.359 --> 00:21:39.523
<v Emily Blumenthal>I'm assuming and again you can correct me if I'm wrong in the 200, 300 price point range.

00:21:39.523 --> 00:21:52.631
<v Emily Blumenthal>Going above that might be suicide essentially for a company like yours that produces mass or produces in bulk per se and then whatever's left over then goes to off price.

00:21:52.631 --> 00:21:56.111
<v Emily Blumenthal>Can you talk a little bit about that process and pricing and so forth?

00:21:56.111 --> 00:22:01.965
<v Emily Blumenthal>And are you the one who's dictating what the retail price is, or is the retailer, and how does all that work together?

00:22:01.986 --> 00:22:03.029
<v Abe Chehebar>Right.

00:22:03.029 --> 00:22:10.519
<v Abe Chehebar>So basically the lines are created, the five brands that we represent, that we designed for and distributed for.

00:22:10.519 --> 00:22:13.960
<v Abe Chehebar>The lines are created for departments, especially stores, for the most part.

00:22:13.960 --> 00:22:33.880
<v Abe Chehebar>So the initial launch of these brands the specialty stores, department stores, big box retailers and so on and then the sub merchandise meaning at the end of the season, merchandise that's left over, that wasn't sold into that channel, goes to the off price channel.

00:22:34.923 --> 00:22:39.619
<v Abe Chehebar>We have limitations contractually as to what we can sell off price as a company.

00:22:39.619 --> 00:22:41.640
<v Abe Chehebar>So each brand has its percentage.

00:22:41.640 --> 00:22:49.839
<v Abe Chehebar>For example, one brand says you could do only 40% of your volume off price versus 60 to the department store channel.

00:22:49.839 --> 00:22:56.858
<v Abe Chehebar>So for every million dollars that you do in the department store channel you can do 400,000 in off price channel.

00:22:56.858 --> 00:23:09.848
<v Abe Chehebar>So there are limitations as to what we can do with that channel and that's why when we do have available merchandise it goes very quickly and we have very strong partnerships with the off price category of retail retailers.

00:23:09.848 --> 00:23:11.140
<v Abe Chehebar>They are great partners.

00:23:11.140 --> 00:23:15.374
<v Abe Chehebar>They buy, they commit, they stand to their word, they pay the bill.

00:23:15.374 --> 00:23:27.682
<v Abe Chehebar>They're a great retailer group, that channel, and that's one of the reasons why many vendors, wholesale companies, brands, are doing business in that channel, because it's easy money, so to speak.

00:23:28.194 --> 00:23:36.984
<v Emily Blumenthal>How much in terms of price, in terms of your cost, how close is it to your actual cost per bag?

00:23:36.984 --> 00:23:52.423
<v Emily Blumenthal>Like, if you're taking it you know it's great, you can sell it through, but you know, seeing the markup, the difference between what it is and what you can sell it at a higher price, distribution channel versus off price, is that stressful.

00:23:52.423 --> 00:23:56.816
<v Emily Blumenthal>Or you just know it's great because no matter what the inventory is sold, Right.

00:23:57.036 --> 00:24:06.659
<v Abe Chehebar>So we have a whole logistics team that estimates, you know, how much to buy per category, per brand, per retailer and so on, and it's a whole science.

00:24:06.659 --> 00:24:15.242
<v Abe Chehebar>So we spend a lot of money and time in you know forecasting what the needs are gonna be per channel, per retailer, per brand, and so on and so forth.

00:24:15.242 --> 00:24:19.826
<v Abe Chehebar>So the leftover product is not really that stressful really.

00:24:19.826 --> 00:24:28.442
<v Abe Chehebar>And again, this is stuff we learned over the years and through mistakes, and the business is a trial and error business, no matter what you're doing, right, right.

00:24:28.442 --> 00:24:36.900
<v Abe Chehebar>So I think we have it down to a good you know science where we're able to forecast the needs of various brands for various retailers.

00:24:36.900 --> 00:24:48.441
<v Abe Chehebar>And, of course, you know there's dialogue prior to the season with our retail partners about what they're thinking versus what we're thinking, and we try to align those ideas and come to a good conclusion.

00:24:48.441 --> 00:24:54.942
<v Abe Chehebar>But overall, really, there's one thing I learned in handbags is always an exit, you know you never really get stuck with product.

00:24:55.454 --> 00:24:59.894
<v Emily Blumenthal>Right, right, yeah, because there's somebody somewhere that will always want it if it's a well-made bag.

00:24:59.914 --> 00:25:00.580
<v Abe Chehebar>There's always an exit.

00:25:01.489 --> 00:25:02.032
<v Emily Blumenthal>That's a good thought.

00:25:02.276 --> 00:25:16.762
<v Emily Blumenthal>There's always an exit in handbags, so let me just get to the part that you know where you can really shine here In terms of bags that you are designing and trends and color and so forth, because this is something that we always get asked.

00:25:16.762 --> 00:25:25.084
<v Emily Blumenthal>Where do you see it going in terms of silhouette, in terms of e-points on a bag Like, and what colors do you think are coming and going?

00:25:25.084 --> 00:25:32.263
<v Emily Blumenthal>I mean the clutch, to my dismay and happiness, I guess in some regards, has made a wild comeback.

00:25:32.263 --> 00:25:37.518
<v Emily Blumenthal>Talk a little bit about that, because, honestly, this is like handbag crack to our listeners.

00:25:38.615 --> 00:25:38.796
<v Abe Chehebar>Right.

00:25:38.796 --> 00:25:44.821
<v Abe Chehebar>So basically, at the moment we're seeing a big surge in, like you said, clutches are performing really really well.

00:25:44.821 --> 00:25:48.384
<v Abe Chehebar>Horse bodies continue to do really well, very strong.

00:25:48.384 --> 00:25:51.084
<v Abe Chehebar>Anything hence free is doing really well.

00:25:51.084 --> 00:26:00.119
<v Abe Chehebar>You know, everybody's on their phones today, so whether it's a handbag on your back or a bag that's over the chest that they don't have to carry, we're seeing a lot of that today.

00:26:00.119 --> 00:26:04.184
<v Abe Chehebar>The E function people want pockets for everything.

00:26:04.184 --> 00:26:07.979
<v Abe Chehebar>Utilitarian bags are doing really really well right now as well.

00:26:07.979 --> 00:26:11.263
<v Abe Chehebar>People are getting into common sense buying.

00:26:11.263 --> 00:26:15.238
<v Abe Chehebar>When it comes to a bag where they want a phone for their pocket, they want to, I'm sorry.

00:26:15.238 --> 00:26:20.663
<v Abe Chehebar>They want a pocket for their phone, they want a pocket for their wallet, they want to have it organized, a feature of some sort.

00:26:20.663 --> 00:26:24.164
<v Abe Chehebar>So utilitarian design is doing really really well.

00:26:24.164 --> 00:26:26.462
<v Abe Chehebar>Anything hence free is doing really really well.

00:26:26.462 --> 00:26:35.939
<v Abe Chehebar>And a lot of these retro shapes, like you mentioned the clutch, rightfully, so I'm seeing a phenomenal pull on clutches and that kind of thing, but as well.

00:26:36.555 --> 00:26:38.079
<v Emily Blumenthal>With the clutches that you design?

00:26:38.079 --> 00:26:43.665
<v Emily Blumenthal>Are you selling them with a crossbody strap all the time, Like always?

00:26:44.357 --> 00:26:46.559
<v Abe Chehebar>Some yes, some no, so we try to give them the option.

00:26:46.559 --> 00:26:53.621
<v Abe Chehebar>Some of them come for the wristlet, some come with a detachable strap so they can wear it with a shoulder or they can put it under their arm.

00:26:53.621 --> 00:26:57.265
<v Abe Chehebar>So it's done various ways within the various brands.

00:26:57.634 --> 00:26:59.563
<v Emily Blumenthal>And what colors do you think are on its way out?

00:26:59.563 --> 00:27:01.382
<v Emily Blumenthal>Or is it one of those same thing?

00:27:01.382 --> 00:27:05.780
<v Emily Blumenthal>It's black, brown and oxblood regardless, and then it's neutrals, no matter why.

00:27:05.780 --> 00:27:09.705
<v Emily Blumenthal>Do you see a color that's really popping up other than pink?

00:27:09.705 --> 00:27:10.056
<v Emily Blumenthal>Right?

00:27:10.577 --> 00:27:11.300
<v Abe Chehebar>so interesting.

00:27:11.300 --> 00:27:18.085
<v Abe Chehebar>I mean, everybody knows the number one selling color in bags is black, so that's usually 40% 50% of the business, which is huge.

00:27:18.085 --> 00:27:21.604
<v Abe Chehebar>And then there's a pop color that comes in every season or two.

00:27:21.604 --> 00:27:26.362
<v Abe Chehebar>Last season it was that whole green thing that was going on avocado.

00:27:26.362 --> 00:27:29.279
<v Abe Chehebar>All kinds of different green colors were selling really really well.

00:27:29.279 --> 00:27:33.281
<v Abe Chehebar>Pink, of course, because of the Barbie movies, started picking up very, very nicely.

00:27:33.281 --> 00:27:35.661
<v Abe Chehebar>I think it's on the downtrend at the moment, though.

00:27:36.162 --> 00:27:36.423
<v Emily Blumenthal>Me too.

00:27:38.397 --> 00:27:47.523
<v Abe Chehebar>And the nudes are very, very strong year round, so we're seeing the light tans and light topes performing really really well.

00:27:47.523 --> 00:27:49.883
<v Abe Chehebar>Kognac is also on the way down a little bit.

00:27:49.883 --> 00:27:53.265
<v Abe Chehebar>There was a very strong color but now it's slow down a lot For a long time.

00:27:53.265 --> 00:27:59.619
<v Abe Chehebar>You know that medium brown color kind of slowed down a lot and then, of course, white in the summer does really really well.

00:27:59.619 --> 00:28:09.019
<v Abe Chehebar>So white in the spring summer season is about 25, 30% of black business, black ambex, but black is the number one color by far.

00:28:09.722 --> 00:28:09.823
<v Emily Blumenthal>OK.

00:28:10.474 --> 00:28:16.118
<v Abe Chehebar>We do solid black packs on several of our designs with that just sell like crazy.

00:28:17.434 --> 00:28:28.359
<v Emily Blumenthal>Must be nice to know that, no matter what, you've got your guaranteed ones and you're going in saying that we can project that this inventory will sell as a result of it purely being a backpack and black.

00:28:29.222 --> 00:28:37.400
<v Abe Chehebar>Right, and we also try to be on the safe side as well, because when you're buying inventory, you're taking your buying inventory, you're putting dowels on the table.

00:28:37.400 --> 00:28:48.384
<v Abe Chehebar>So whenever we have this rule that whenever we have a new material we use a proven silhouette Whenever we use a new silhouette we use a proven material, so you're always at least 50% more.

00:28:50.476 --> 00:28:58.226
<v Emily Blumenthal>Okay, I want to round this out with one question and I'm really excited to hear why and what you have to say.

00:28:58.226 --> 00:29:05.994
<v Emily Blumenthal>So, 10 years ago even I'd say well, not even five because the pandemic just destroyed everything.

00:29:05.994 --> 00:29:11.421
<v Emily Blumenthal>I mean handbags took such a hit as a result of being trapped inside and I think novelty.

00:29:11.421 --> 00:29:32.346
<v Emily Blumenthal>Historically, post-pandemic studies have shown, even if you go all the way back, because I've spoken about this if you go all the way back to the Spanish flu with the roaring 20s, after novelty made a huge comeback because people were ready for new, fun, pop of color, so forth, and you said back in the day there were very few people making handbags.

00:29:32.346 --> 00:29:35.263
<v Emily Blumenthal>Right now there are very few people making handbags.

00:29:35.816 --> 00:29:36.982
<v Emily Blumenthal>Why do you think that?

00:29:36.982 --> 00:29:38.775
<v Emily Blumenthal>Do you think it's going to change?

00:29:38.775 --> 00:29:41.064
<v Emily Blumenthal>I know off-price has a lot to do with that.

00:29:41.064 --> 00:29:43.323
<v Emily Blumenthal>What are your thoughts on the state of the industry?

00:29:43.323 --> 00:30:03.268
<v Emily Blumenthal>Do you think more manufacturers where people like you were going to come back I mean, you spawn from your dad having a shop and another time I'd love to hear your story of like, hey, I'm just going to go out, I'm going to go travel and see how production works Do you think that people like you will make a comeback within the industry sense.

00:30:03.957 --> 00:30:05.035
<v Abe Chehebar>Right, good question.

00:30:05.035 --> 00:30:10.327
<v Abe Chehebar>So you know, this industry had a one-shoot punch about two years ago, where you know.

00:30:10.327 --> 00:30:13.183
<v Abe Chehebar>First we had the pandemic, which everything shut down.

00:30:13.183 --> 00:30:19.183
<v Abe Chehebar>People were staying home, there was nothing going on which took a bite out of a lot of companies' coffers.

00:30:19.183 --> 00:30:20.343
<v Abe Chehebar>Number one, number two.

00:30:20.343 --> 00:30:24.703
<v Abe Chehebar>Right after the pandemic, it was a major logistics debacle.

00:30:25.115 --> 00:30:27.734
<v Emily Blumenthal>Yeah, goods were trapped in waters for ages.

00:30:27.914 --> 00:30:28.938
<v Abe Chehebar>The shipping companies?

00:30:28.938 --> 00:30:39.625
<v Abe Chehebar>No, but the shipping companies were charging, you know, 20,000 a container, 18,000 a container if you can get them, and keep in mind the container only holds like 4,000 stuffed ambacks.

00:30:39.625 --> 00:30:44.105
<v Abe Chehebar>So you know you're paying $5 a bag to bring them in from China.

00:30:44.105 --> 00:30:54.147
<v Abe Chehebar>And then the triple whammy was the 41% duty which you're talking about having an extra 25% because of the tariff war with China.

00:30:54.147 --> 00:30:56.182
<v Abe Chehebar>Most companies bring goods in from China.

00:30:56.182 --> 00:31:06.006
<v Abe Chehebar>So between the pandemic, between the logistics of shipping logistics and then the extra duty, many companies couldn't sustain that kind of hit.

00:31:06.006 --> 00:31:08.240
<v Abe Chehebar>So it went from.

00:31:08.240 --> 00:31:16.961
<v Abe Chehebar>It's fair to say, we lost about maybe a good eight, nine companies in the past three or four years in our industry that just threw in the towel.

00:31:16.961 --> 00:31:18.696
<v Abe Chehebar>Yeah, we were fortunate.

00:31:18.696 --> 00:31:26.474
<v Abe Chehebar>We were able to, you know, sustain the pain and be able to weather the storm and be able to stay business.

00:31:26.474 --> 00:31:30.151
<v Abe Chehebar>But it definitely also took a big bite out of our company as well.

00:31:30.151 --> 00:31:32.703
<v Abe Chehebar>I gotta tell you it hurt everybody in this industry.

00:31:33.174 --> 00:31:35.644
<v Abe Chehebar>Thank God, container rates are back to normal today.

00:31:35.644 --> 00:31:37.560
<v Abe Chehebar>Supply chain is working.

00:31:37.560 --> 00:31:42.982
<v Abe Chehebar>It's much easier today than it was two years ago and the business is becoming back to normal.

00:31:42.982 --> 00:31:47.246
<v Abe Chehebar>And the fact that there's less players out there creates more opportunity.

00:31:47.246 --> 00:31:56.445
<v Abe Chehebar>So there's no question today that there's room for additional, you know, companies, ideas, designs, designers and to the market.

00:31:56.445 --> 00:32:00.060
<v Abe Chehebar>It's actually a great time to enter the markets Because people are looking for newness.

00:32:00.060 --> 00:32:05.711
<v Abe Chehebar>There's a lot of the more of the same going on out there, yeah, and people love to see newness.

00:32:05.711 --> 00:32:08.864
<v Abe Chehebar>You know they love to see new designers, new ideas, new brands.

00:32:08.864 --> 00:32:15.226
<v Abe Chehebar>So I think there's always, especially in the handbag category, there's always opportunity to jump in and be able to gain recognition.

00:32:16.036 --> 00:32:25.642
<v Emily Blumenthal>Have you moved on from producing in China and looked towards other countries, Because I know other manufacturers like yourself have moved to Africa, other parts of Asia and so forth.

00:32:26.115 --> 00:32:27.401
<v Abe Chehebar>Yeah, that's a big, big topic.

00:32:27.401 --> 00:32:30.344
<v Abe Chehebar>It's actually one of the topics that's keeping us up in the night.

00:32:30.344 --> 00:32:34.144
<v Abe Chehebar>You know, china is a great country to work with.

00:32:34.144 --> 00:32:35.981
<v Abe Chehebar>Our whole team is in China.

00:32:35.981 --> 00:32:37.400
<v Abe Chehebar>We're established in China.

00:32:37.400 --> 00:32:39.174
<v Abe Chehebar>Are we producing in other countries?

00:32:39.174 --> 00:32:41.799
<v Abe Chehebar>Yes, we are doing Cambodia, we're doing some Vietnam.

00:32:41.799 --> 00:32:54.365
<v Abe Chehebar>We are starting to shift slowly out of China, primarily because of the you know threat with the potential whole Taiwan thing and what's going to be and how the US is going to react we don't know.

00:32:54.365 --> 00:32:59.002
<v Abe Chehebar>So there's a lot of unknowns today with China that could be a potential risk down the road.

00:32:59.002 --> 00:33:00.520
<v Abe Chehebar>So we are shifting slowly.

00:33:00.520 --> 00:33:07.743
<v Abe Chehebar>But I must say it's just so easy to work with China because we've been there for 30 years and we say a half a sentence and they get it.

00:33:07.895 --> 00:33:09.059
<v Abe Chehebar>They know what you want, you know.

00:33:09.099 --> 00:33:13.241
<v Emily Blumenthal>Right that learning curve is expensive when you move to new factories.

00:33:14.263 --> 00:33:16.269
<v Abe Chehebar>Absolutely, absolutely, that's for sure.

00:33:16.269 --> 00:33:19.680
<v Abe Chehebar>So, yeah, I mean, cambodia is pretty good, vietnam is good.

00:33:19.680 --> 00:33:22.797
<v Abe Chehebar>We are looking at a factory in Bangladesh Now.

00:33:22.797 --> 00:33:27.222
<v Abe Chehebar>These are all Chinese managers or factory owners that are investing in these other countries as well.

00:33:27.222 --> 00:33:36.039
<v Abe Chehebar>So you are dealing with people that know what they're doing, but it's the labor force that needs training and getting up to speed.

00:33:36.561 --> 00:33:39.423
<v Emily Blumenthal>Right, this has been so enlightening.

00:33:39.423 --> 00:33:43.480
<v Emily Blumenthal>I mean, honestly, I bet you and I could talk about that till the song comes down.

00:33:43.480 --> 00:33:51.005
<v Emily Blumenthal>I'm so grateful for you to have taken your time and sharing your wealth of a lifetime of handbags.

00:33:51.005 --> 00:34:15.114
<v Emily Blumenthal>I know this is going to be a really well-listened two-episode, purely because educational, lady, this was so enriching and I think we may have to have you back again to talk about what the state of the industry is, because I know if anybody like you said so many people threw in the towel just because it was like well, I've been doing this for 30 years, why bother beating my head against it while I'm waiting for another life cycle to pass?

00:34:15.114 --> 00:34:22.960
<v Emily Blumenthal>I might as well just move on retired, cut my losses, but you're still here and I assume you're not going anywhere, because this is just who you are.

00:34:23.695 --> 00:34:24.639
<v Abe Chehebar>Yes, we love the business.

00:34:24.639 --> 00:34:30.119
<v Abe Chehebar>You know, and I tell my folks here that nobody goes to Harvard to end up in the handbag business.

00:34:30.119 --> 00:34:33.360
<v Abe Chehebar>You grow up in the business, you got to love the business.

00:34:33.360 --> 00:34:40.244
<v Abe Chehebar>So, yeah, thank you for your time and keep up the great work and you're doing great things in our industry, so keep it up.

00:34:40.635 --> 00:34:46.483
<v Emily Blumenthal>How can people learn more, find more about AHQ and buy bags that you're making?

00:34:47.335 --> 00:34:49.242
<v Abe Chehebar>So our website is ahqcom.

00:34:49.242 --> 00:34:59.682
<v Abe Chehebar>There's plenty of information there and we're happy to share any information, and they can also look us up on Instagram and all those other social media things.

00:34:59.682 --> 00:35:04.442
<v Abe Chehebar>We have a whole team that does that here and I don't really know it well, but AHQcom is our website.

00:35:04.974 --> 00:35:05.757
<v Emily Blumenthal>Wonderful Abe.

00:35:05.757 --> 00:35:10.621
<v Emily Blumenthal>Thank you so much for taking the time and we look to see more bags coming from you.

00:35:10.621 --> 00:35:11.422
<v Emily Blumenthal>Talk to you soon.

00:35:12.105 --> 00:35:12.907
<v Abe Chehebar>Thank you so much, bye-bye.

00:35:14.735 --> 00:35:15.518
<v Emily Blumenthal>Thanks for listening.

00:35:15.518 --> 00:35:20.885
<v Emily Blumenthal>Don't forget to rate and review, and follow us on every single platform at Handbag Designer.

00:35:20.885 --> 00:35:21.817
<v Emily Blumenthal>Thanks so much.

00:35:21.817 --> 00:35:22.798
<v Emily Blumenthal>See you next time.