Stella Valle in Flemington, NJ with the Dellavalle Sisters
Guest: Ashley Young and Paige Walker
Topics: Stella Valle, fashion industry
Chris Ressa 0:08
This is retail retold the story of how that store ended up in your neighborhood. I’m your host, Chris ReSSA. And I invite you to join my conversation with some of the retail industry’s biggest influencers. This podcast is brought to you by DLC, Matt.
First, I’d like to thank one of our sponsors credit Intel, knowing the financial health of retailers is crucial for the success of your retail related business. That’s what credit Intel is for credit. Intel analyzes the financial health of hundreds of publicly and privately held retailers in different sectors with a subscription to credit Intel, you have access to comprehensive analysis of retailers, financial condition, and their Expert Analytics team. Visit credit intel.com for more information. Welcome everyone. Today I have with me Ashley Young and Paige Walker. They’re the co founders and head designers of Stella Val. They are Shark Tank winners, Army vets and West Point grads. I don’t think I’ve had anyone with those accomplishments on here. And after they left the military, they pursued their dreams in the fashion industry and ended up bootstrapping a charm jewelry chain. And how do you guys call it? Brand brand. And so welcome to the show.
Ashley Young 1:31
Thanks for having us, Chris.
So why don’t you guys tell us a little bit about you guys and Stella bow and what’s going on with Stella out
Paige Walker 1:40
there. So we started selling well, actually 10 years ago, which is hard to believe. And it was right after I graduated from West Point. And Ashley had just finished her five years serving active duty in the army. And I was actually suddenly medically retired from the Army and called my older sister looking for inspiration of what to do with my life. Because I thought I had five years in the Army. And she asked me what was my passion and I told her fashion and I wanted to be in the fashion industry. And she was like, well, that’s gonna be hard coming right from West Point, we decided that we were going to start a company together very naive to what that takes at the time, because we, you know, had business degrees from West Point, but really were didn’t know anything about jewelry manufacturing, on marketing, branding, any of those things. So it took us some time to kind of figure it out trial and error. And we started with $2,000 the company. Basically our sister had given us $1,000 And a family friend who is an entrepreneur gave us $1,000. And that’s what we started the company with. On believable. Yeah, so we really did bootstrap
to say the least. And we still feel like we’re bootstrapped.
And so we now 10 years later, you know, we’ve gone through kind of the whole gamut, where we gone on Shark Tank, had investors negotiated and got back the full ownership of our company again, you know, have done wholesale laser focus, then as the, you know, it changed and went more to ecommerce, we’ve had to shift our focus a little bit. And now we’re testing our own retail, with the pop up and kind of seeing what that’s like. So we’ve kind of been through it all in the past 10 years. And I feel like that’s kind of what it takes, you know, it’s trial and error and figuring out what works and what doesn’t work for you.
And so where are you guys office today? Where’s like the office.
We’re headquartered out of New Jersey, although prior to having our pop up, everyone worked remotely, just because we had prior to that we had a warehouse and an office space in Flemington, New Jersey. But we were doing our own fulfillment and shipping and receiving out of the warehouse, and it got overwhelming for us. So we outsourced the shipping and receiving and felt like we could be just as productive working remotely. So everyone worked remotely after that. And then now that we have our pop up store, we are working from here. So we’ll see the next steps we’re we’re anxious to how many employees do you guys have? So we have a really small team
right now we have seven of us internally. Amazing and we outsource everything. You know, we have our manufacturing in Rhode Island who has factories overseas, and then they have a team who does all of our fulfillment out of Rhode Island. We warehouse all of our fixtures and displays in Rhode Island where the products made We have our digital agency in New York City. So we pretty much outsource everything. The only thing we have internally is graphic designing. Yeah. And
then we do like marketing and sales kind of internally. But I have showrooms
in Atlanta, and we’re opening our first one in Las Vegas next year. So
on the strip, it’s in like
a convention center.
The showrooms are for our wholesale customers. So our customers that are buying the product and then reselling it, so they come to our showrooms to see the product and then purchase it wholesale.
And so you guys mentioned that you had bought out your investors. So does that mean Lori and Mark and whomever was involved are not involved anymore?
Yes, yes. So last January, we had the opportunity to do that. And we just felt like we had taken advantage of everything that mark and Laurie had to offer. And I mean, we got so much credibility from having them as investors. But at the end of the day, we really wanted to make all the major decisions for our business. And we had really evolved as a company, he mentioned that we’ve changed in terms of our major sales channels, when we started in our industry, wholesale was really what was the most popular and over the last 10 years, it’s flip flopped to e commerce being more beneficial. So we have, you know, changed that and the relationships and the things that mark and Laurie helped us with, we felt like no longer really could help us as we grew the business in the future. So just like a change the vision for where the company was going, we just decided that it was best that we grew it together.
So I’m sure you tell us a million times. And I’ll be the million and one how’d you end up on Shark Tank.
Oh my gosh. So our sister, we have a sister that’s in between page and I, she’s two years younger than me. She’s a couple years older than Paige and she was an early watcher of Shark Tank, like the first couple of kids. And she came to us and was like, You guys need to go on Shark Tank. It’s an awesome show. I love it. And I think you guys would be great on that. So at the time, Paige had just quit her full time job, and was trying to do sell full time. And we knew we needed some funding to help grow the business. And we were still a very, very small business. I mean, we had 50,000 in revenue when we went on the show. And so Paige just sent in a blurb online to ABC. And they ended up calling us back and saying we’d like to talk to you more. The process to get on the show is insane. It took us about six months to get on the show to actually film from the time that we sent in the blurb to the time that we actually filmed. Wow. And there were 37,000 applicants, we were on season four of Shark Tank, they’re now on season 11, I think. And there were 37,000 applicants and they flew 100 out to LA to take. And actually only 80 of those went in front of the sharks. Wow. And then less about half of those companies get deals on the show. And then after that a portion of those that get deals don’t even actually close after the due diligence process. So it’s really hard to get a deal with them and start to finish it probably it took us over a year and a half to close the deal.
Oh my god. Yeah, people, the viewers must think that when you guys hug Laurie and mark the deal was done. But then the due diligence starts. So you actually have to make the deal. Yeah,
took another six months. Yeah, that’s more than that. Almost a year, from the time that we taped with them till the time the deal closed. It was almost a year.
Amazing. So it’s a long process. And I don’t know if it’s probably the if you don’t want to say no problem. But how big is the business gotten to today? You said you started out with 50,000 in revenue where you guys had today. We
are trending to do about 2 million in sales this year.
Incredible. Congratulations. That’s amazing.
And clever enough. We’re probably similar to you and a lot of the entrepreneur viewers out there, but we’re always trying to grow.
And so you made a pivot, which I think is interesting pivot from doing wholesale right selling to the local specialty retailers or Neiman Marcus is or whomever you were selling to before and now you’re going direct to consumer. Has that been a big change for you guys? How’s that been a big change for you guys?
Yeah, I mean, we just over time we realized Is that selling online operationally. And being able to control your brand, were two things that were so important to a brand like ours and growth. So operationally, it’s easier to just manage through an E commerce site, what’s coming in what’s going out. And then also, we can control all the brand messaging when it comes to selling online. And it’s really hard when you have wholesale accounts to get them to get on board with telling your story and promoting the same things that you want promoted. So we just felt like it was a much easier play as we grew, and you can scale way faster if you can grow the E commerce side of your business. Now, there are always challenges with that as well. I mean, it’s nothing I would say is easy, but we felt like it was the right move. And that’s where retail was really going.
As the whole supply chain and logistics and getting the product to the consumer been a challenge given you’re now doing it direct,
we made it pretty seamless, because we’re using one manufacturer, and they’re fulfilling the product for us. So from start to finish, from design, or through the product, getting to our end customer, they handle it all. And I mean, we definitely pay a premium for it. And we know that. But we feel like we have the right partner in terms of manufacturing. They’re amazing at what they do. They do it for all the big costume jewelry brands in the industry. So we feel like we’ve made the right decision there at this point in our business in streamlining everything. So we are personally as a company dealing with one point of contact and not having to really juggle all the different partners that we could have if we have if we were to outsource to different vendors or suppliers. So we’ve made it I guess, as seamless as possible.
Awesome. Well, that’s great. So I found out about you guys, cuz through Shark Tank, and then I saw that you guys, were opening a pop up in Flemington, New Jersey, I’m in New Jersey native. And so I found it fascinating. So you’re actually in the pop up right now, Paige had to go handle or deal with a customer. That’s amazing. And so tell us how that unfolded? What made you guys think that you wanted to try a pop up? And how’s it going and walk us through that story?
Yeah, so I mean, a lot of digitally native brands, now are really doing retail. And as we talked about before, it really helps the E commerce business if you have a retail presence. And in the short time that we’ve been here, we’ve seen just the brand exposure that you get from having a retail presence. And it’s what we had hoped would happen is that our local community because we grew up here in around Farmington, would come to check out the product and see it in person. And just really get immersed in the brand and understand the brand war and our product just in general in the 3d of the product. The 3d effect of the product is really hard to capture in today on a screen in E commerce, and it’s something we’ve struggled with from an E commerce perspective. So we wanted to give the opportunity for some of our local customers to see what our product was all about. And also just talk to our customers. I mean, when you have mostly digital brand, you don’t get to converse with your customers on a regular basis. And we feel like we could learn so much from talking with our customers on a daily basis and just understanding who they’re buying the product for why they’re buying it what they like best. And we can do it from a data perspective with our ecommerce store, but we weren’t able to do it from like a qualitative perspective. So that’s been really another piece of why we wanted to open a store.
Amazing. And so you ended up and you do it in your hometown with your local consumer. And so you found a location was this your first time like you guys had to negotiate a lease or anything like that, or what did you guys have to do to get the location?
Yeah, so it was interesting we Flemington, New Jersey is an interesting place because the main street of the town has so much potential, but there haven’t been a lot of new retailers and incoming cool places to shop on the main street. And there’s actually some developers that are working on passing redevelopment. Oh, Have the main street of the town. But Paige and I wanted to be on the Main Street to bring some excitement and something cool to our community. Amazing. So we started just walking around basically the town and looking at spaces that were for lease, and we found one that was amazing, and would have been perfect for us. But it already had someone that was interested. And it was leased before we had the opportunity. So we found another space just down the road. And it had been vacant for a couple of years. It was a disaster. It probably was vacant because no one could even imagine that it could be cool. Yeah. But I think that’s one of our strengths is like taking something that’s not that cool and making it into something. So we got the opportunity to come inside and actually the neighbor next door who owns like a bridal shop, his daughter went to school with Paige and grew up with Paige. So he was telling us all about it. He actually was in this space before he moved next door. And so he could give us some insight into what it was like and, and help us out a little bit as we moved in. But I will say the one thing with a pop up that was heard because you asked about negotiating lease is that most commercial landlords do not want short term leases. Totally. Yeah, there were a couple other spots that we were really interested in. And the landlord was just like I don’t want a short term lease, because we were only interested in doing it from November and December as a test. So we had to convince the landlord that she should allow us to do this short term lease and we did it by telling her like you haven’t had the space leased for two years, we’re going to drastically improve this space. So you can get another tenant in here very easily afterwards. And you know, either you make something for two months, or you make nothing is basically what we told her and she agreed to it.
So the landlord is just some local woman who wants to build it.
She’s a wealthy woman who actually lives in LA. So everyone
paid just back from working with the customer. And in year five. So she’s a wealthy woman who
she actually lives in California, LA and owns the building, there’s three retail spots on the bottom of the building. And then there’s upstairs, there’s office space, that she also leases out to like an insurance agency and a couple other people
got it. So she sends you a lease and the How long is the lease? Two months? No, no? How is it? Is it like a large documents like our leases, or like our leases, we have a short form lease that’s 12 pages. But if you get into like a permanent lease, they’re,
like 100 Sure, it was maybe like seven or eight pages.
That’s good. That’s good.
I mean, I hate contracts. And I felt very confident and comfortable. Like reading it myself and signing it. We didn’t have our attorney look at it.
Got it. So what’s the monthly rent for this pop up here?
1350 a month. Now that I’m just like, understanding because we’re looking at I don’t know if Ashley mentioned this, but we’re looking at other retail spaces more permanent after this. In much busier towns and understanding their rent. I feel like that’s a lot for Flemington on Main Street.
Got it? I have no clue what the market rents are.
Like, to me, it sounds like a little It doesn’t sound like that much, right. And that’s why we probably were like 1350 That’s not that much sure. What I think for them, you know, you always have to look at the market and what bases are going for in the market. We did a little bit of that. But because we wanted to to short term lease, we were willing to pay a little Hey, a little more during the holiday season for that.
Got it. And so you guys have done this pop up outside of the are you selling product in the store? Yeah. In the two months will the will it be profitable? Yes, very
first, we were profitable. The entire duration of the Papa,
including what we spent to improve this space. Because we had to spend a decent amount of money to improve this space because we had to put new flooring down we had to paint you get signage and things like that. So shelving
that’s interesting. What did it cost you to improve the space?
About $3,000 We have a side we have a second business with our dead which is a construction company. So our dad built custom homes growing up like for a living and so we do that with him. Now also, and so we knew we could do this for relatively cheap, what we wanted to do give you
guys a tip in the, in the shopping center industry, when you guys are looking for permanent spaces, which is that for hot brands, as long as you’re paying the market rent, and depending on how long of the lease term you spent, that you signed, that that matters, you can get the landlord to contribute a lot to the build out by example, you know, we do it, when if you saw like a freestanding Starbucks, I might build the entire thing. Even the interior finishes have that. And so I’m looking at it like saying, okay, it costs me a million dollars to build the building, with the site, work everything. And then I need to make a return on that investment. And the rents predicated off of how much it costs to build that building. And Starbucks is understands that but they’re also looking at it, our average change store average is this, we think we can do this much business in this location. And based on this, we can pay this rent, and that’s the negotiation and and sometimes it’s, well, if you can only pay me that, then I can’t do this part of the work, you need to do your air conditioning, because that’s 50 grand, or you need to do this. And they’ll go and they’ll say, Well, I’d rather you do it all. And I can pay you 10,000 a year more if you can do it all. And that’s how those works. So as you’re negotiating with landlords, you’ll get some money.
Yeah, we did try to a little bit negotiate her doing some of the things, but
it was listed with a realtor and she had to pay the realtor commission, even the two months. So from her perspective, like she wasn’t making a lot of money off. But the benefit is it’s been close, or no one’s been in here for two years. And the improvements. I mean, no one would have rented it the way it looked. That’s what Ashley was saying. You know, basically read on that, I think now so um, we’ll rent it.
And so you mentioned you’re thinking about a permanent location. So you guys are going through that process? Have you like, figured out like, how big it needs to be and what you’re gonna do in it and all that stuff? And how did you guys come up with that?
Yeah, I mean, this space that we have right now is the actual selling space is about 700 square feet. And jewelry is small. So we don’t need very much space, totally, probably 700 square feet is ideal. But we want to add a little cafe as part of the space for the experience experience did drive customers in. So we could take up some of that space, probably about 200 square feet with the cafe, and then about 500 square feet, or maybe even a little bit more with the jury. So we really don’t need a large a huge space. But we’ve learned from having the pop up. Obviously, location is super important. So how do we get people here into the space and because we’re local, and we’ve had some PR, and you know, we have friends and family that are spreading word, and a lot of local people that are spreading word we’ve done really well. But if we’re in another location where we’re not quite as local, we really need to think about how we drive traffic to the store. So we actually this morning went and visited a couple of spots in the town of New Hope, which I don’t know if you know anything about New Hope.
Awesome place. Awesome tab. Yeah, it’s a really cool
little town. But it would be very different from this location. Because
the demographics are different there.
Yeah, the demographic is very different. More tourists that come it’s, it’s walking traffic versus here in Main Street on Flemington, there’s a lot of drive by traffic. But there’s also places to park that are convenient, in New Hope the parking isn’t very convenient. So it would be a completely different experience than what we have here. So we’re just trying to weigh all of our options. And we want to stay local, somewhat local, because Paige, and I want to be able to be there and just made mercy, see the operations and you will hire a manager. I mean,
obviously, the end goal is that you have success in one location, and then you open multiple locations, right. So I think it’s important for us to understand that first location really well and what works and what doesn’t, and how do we improve and then if we want to open a second one, like take that info and insight and put it into the second location, so it’s important for us to be able to have access to it and it’d be pretty close for us.
So Like I said earlier, if you guys want to connect after this and talk about any ideas, I have a bunch of ideas. I’d love to chat with you guys. And if I can offer anything, definitely
learning we might not even make you come to New
Hope with I’ll totally go to new hope because it’s a great place. So I love New Hope it’s not that far from me. So you guys are a fantastic story. I don’t want to take up much more your time. But I asked everyone three questions at the end. random questions. They are we call it retail wisdom. And so I don’t know if we have any of that curse. Do I consider I consider the E commerce side retail. So first question, the extinct retailer you wish would come back from the dead. I
want to say which this is just like recent actually Barneys New York who’s like, just shut down or is shutting down. I just think it’s so sad, because they’ve been there for decades. And actually, all these designers who have like, started there and really made their name from being there, like they no longer have a home base there. So I think that one just like, from a fashion and that’s like super high end fashion. Like I’m not Bernie’s customer, but I just like feel like it’s sad to see that go.
And in a similar vein, Henry Bendel, we actually did Trump’s shows there when we started and sold our product there. And they shut down a couple of years ago. Yeah, but it was just kind of like a retail icon. That just couldn’t even make it and it’s sad to see that.
Yeah, totally. So you guys are new at it. But the best piece of real estate advice you guys could have given where you are and what you’ve learned so far.
Location, location, location and understanding the customer in that location.
That’s great advice, actually. Yeah, totally. Because it’s like,
I feel like just for new hope even they a ton of traffic, but we have to make sure it’s the right traffic even for our brand.
Last question. It’s like the price is right. I’m gonna give you a product. You’re gonna tell me what the retail price you think it is. So, do you guys have little kids? Yes. So I’m on Target’s website right now.
Okay, she was just there for our it was
the board game hacking pack in alpaca board game? What does that retail
for? 1499. Close.
It’s read. So I’m assuming it’s on sale. It’s 999. What was the actual resale before the sale? I don’t know. 9099. It’s right in the middle. Yeah. Well, listen, you guys are inspiring brand. You guys are inspiring individuals. What you’ve done is amazing. wish you nothing but great success. And if you guys want to bounce some ideas off of don’t hesitate to reach out. I’d love to connect with you and share some insights.
You’ll be ringing in about five minutes. No problem.
Sounds good. Thanks, guys. But thank you for listening to retail retold. If you want to share a story about a retail real estate deal you were a part of on our show. Please reach out to us. This podcast highlights the stories behind deals from all perspectives. So it doesn’t matter if you’re a retailer, broker attorney or an architect. Contact Diane Lee at D L E at DLC mgmt.com Also, don’t forget to subscribe to retail retold so you don’t miss out on next Thursday’s episode