Tough as Leather

When Leila awoke, her pelvis and foot were broken, but she hadn't suffered any brain damage. Nursing her back to health took two months. Without insurance, Duren faced the medical bills knowing that she barely had the equipment or materials to do business even if she had had the time. When she finally did, she was practically down to her last dime, but she knew her priorities: "If there was a choice between buying some `luxury' food--at that time, that would have been yogurt--or a glossy folder to present my merchandise in, it was the folder, hands down."

Yogurt? A luxury item? Well, not after Duren convinced the posh department store Nordstrom to carry a few of her handbags in 1985. "[That] was a challenge," she says. "They'd ask me, `When will you be ready to ship?' and I'd say, `I have everything in stock,' which was a lie, of course. So they'd place the order, and I'd have to get that order done."

The orders kept coming, especially for wallet organizers, a then-new item that combined the functionality of a wallet with the look of a purse. By 1986, Duren again needed help and took on an apprentice. By 1989, Nordstrom wanted enough wallet organizers that one apprentice wasn't enough. An acquaintance connected Duren with a factory in China that could make her products for a fraction of what she would have had to pay in the United States.

Remember Tiananmen Square?

The massive uprising, the demonstrations, the tear gas, the bullets--Duren's factory was in the midst of it. But she kept receiving reports from the factory that her deliveries would arrive without a hitch. Finally, four weeks before a large order was due for the Christmas rush, there was still no shipment from China. Duren realized she--and her one employee--had better tackle the project themselves: 800 wallet organizers to create by hand, on top of their other orders, at a $25 loss per item.

When the wallet organizers from the factory in China finally did arrive, they were too shoddily manufactured to meet Duren's standards. Although she owed $80,000 to investors and her leather supplier, she chose to write the shipment off as a loss rather than compromise herself and sell it. She was forced to file Chapter 13.

It took Duren two and a half years of a scheduled four to work her way out of debt, but she didn't spend that time with her mind solely on her creditors. Instead, she applied herself aggressively to growth, hiring and personally training several employees, establishing her factory in a former supermarket in Larkspur, and increasing production. Although she had barely escaped the 1989 debacle with her business, she had escaped with her reputation, and companies recognized that no matter how far set back she was, she'd continue to provide an exceptional standard of quality.

Duren incorporated what had been Julia Duren Co. in 1993 as K.L. Manufacturing Inc. (after her daughters). That year, Nordstrom's vendor of the year was Estee Lauder, but in 1994, it was K.L. Manufacturing. "That was special for me," Duren says, "because in the whole United States, I was a very small fish, but within that one store where we were competing, I was neck and neck with the real big guys."

Along the road to such success, Duren has given more to her business than anybody could ask of her. Entrepreneurs don't start businesses because they envision 20-hour days. Up against her personal life, the business has almost always come first. She put the folder before the yogurt; she put reputation before money; she puts employees before Julia Duren. "Every single penny that I've had," Duren says, "before taking a higher salary or something, I invested in employee benefits. If they feel happy, they're going to turn out a good product."

Today, she's primarily designing handbags, which generally sell for $75 to $300, and predicts sales of $1.8 million in 1999. Duren has seen her purses in such movies as Pretty Woman and The Woman in Red, as well as on the shoulders of women around the world. Her factory is moving into bigger digs later this year, and Duren's engaged to a financially stable, terrific guy. Everything is going great--but this time, thing's aren't too good to be true. They just seem that way.

This article was originally published in the April 1999 print edition of Entrepreneur with the headline: Tough as Leather.