By Laura Tiffany
John Paul Beltran and Richard Hirsh have shown both entrepreneurial and fashion flair with John Paul Richard Inc., their Chatsworth, California, women's apparel company-so much flair, in fact, that they landed the No. 1 spot in Entrepreneur's Hot 100 ranking with revenues of $46.5 million in 1997, their first full year in business.
The founders joined forces after working together at Melrose, a women's apparel manufacturing company Hirsh had founded in 1974. Hirsh sold the company in 1986 and, after spending 10 years working for the new owner, he and Beltran found the corporate life less than fulfilling. "We decided we'd had enough of the corporate environment," recalls Hirsh. "We wanted to get out and start our own business."
Their experience in the apparel industry proved to be their key to success. With $1 million in start-up capital culled from personal savings, they secured $1.6 million in loans and created a relationship with Heller Financial Inc., a Chicago-based international commercial finance company. This helped them garner $25 million in factor loans (loans backed by outstanding invoices and current orders) last year to purchase raw materials and keep the company above water while it grew. "[Heller] was the financial engine behind our colossal growth," says Hirsh. "It was critical in making [funding] available."
"Heller took a big chance on us because of our extensive industry experience," says Beltran. With these resources, the partners had no problem gathering an experienced staff from industry contacts. They were also able to land accounts with such national retailers as Macy's, Mervyn's and Sears almost immediately.
"Giving a start-up company like John Paul Richard [space] in the stores was not so far-fetched because these were people we'd had tremendous experience with over the years," Hirsh explains.
But most important, the partners' familiarity with the market and cus-tomers helped them discover an unfilled niche: fashionable misses' clothes. "We fill a gap in the department store business," explains Bel-tran, 44. "The misses' department is filled with traditional merchandise. We bring in merchandise that is more fashionable and still very reasonably priced."
"We understand our market and each individual player we deal with," adds Hirsh, 45. "And we have a keen understanding of what will sell at what price point."
Not content to stop with just one clothing line, Beltran and Hirsh are ready to conquer other departments with their fashions. "I think the next [thing to do] is to seek more accounts," says Beltran. "In the future, we'll go after the petite-sized and large-sized customers, [markets] we have barely touched on so far."
With plans to double its astounding first-year revenues this year, John Paul Richard's success shouldn't wear out any time soon.