Lap of Luxury

Going Retail

Those already running their own luxury juvenile stores and those who study the market agree this is a good business to get into. However, you'll need to consider whether you want a retail location or a dotcom. Going real rather than virtual has its limitations: Speidel believes the region must be quite affluent-a resort area, an upper-class suburb or a major metropolitan area, for example. But even if the location is right, the rent on your business could hold you back, limiting your product line by square footage.

The greater market, say experts, is on the Web. "There will always be people who buy high-end luxury goods online because they don't otherwise have access," Speidel notes. While there may be plenty of places to find Ralph Lauren crib sets in San Francisco or New York, all the customers in between will rely on online storefronts to deliver the merchandise they seek. The Web's niche appeal and ample product lines delivered to a broader audience make cyberspace a potentially more lucrative alternative.

For many retailers selling better kids' goods online, this retail void was their impetus for getting started. Harina Kapoor, 32-year old founder and CEO of designer children's e-business RainBee.com in Buffalo Grove, Illinois, launched her dotcom in 1998. "After my daughter was born, we went to a boutique that had great catalogs. However, they were only open four days a week, they had poor customer service, and their shipping times were long," recalls Kapoor. "I like quality products. I'm also an engineer and a management consultant, so I have the tech skills. I thought, 'This is the perfect model to put on the Internet!'"

In the evenings, after her two children went to bed, Kapoor worked on her company, often until 2 a.m., designing her storefront and backend system as well as the product line. To get RainBee off the ground, Kapoor put up $150,000 of her own money. Yet even without funding, Kapoor and her one staff member saw respectable sales of $80,000 their first year. "I was working a full-time [consulting] job, and I only had two other customer reps at the time," says Kapoor, who learned about the industry by reading financial and business magazines and studying a local boutique.

A year ago, Kapoor, who has already surpassed her goal of $1 million in sales this year and now has 10 employees, was able to quit her consulting job, and she now runs RainBee full time.

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This article was originally published in the December 2000 print edition of Entrepreneur with the headline: Lap of Luxury.

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