Tough as Leather Building a business isn't easy, but how much can one entrepreneur take?

When Julia Duren arrived from Hamburg, Germany, at the SanFrancisco Airport in 1982, she was a 30-year-old mother with twochildren, ages 5 and 2. Her second husband, an American, was doinglife at San Quentin. She had almost no money and no friends, familyor contacts to speak of. But Duren knew something about leather,and she had a dream.

That put her on the road to success. Today, she's thelargest shareholder of K.L. Manufacturing Inc., a Larkspur,California, firm that had revenues of $1.2 million last year. Shehas 24 employees, all of whom have profit sharing, 100 percenthealth benefits, paid vacation time and all the other benefitssuccessful businesses can afford. But the ups and downs Durenendured are perhaps better-suited for the trampoline business.

"I was scared as hell," Duren says of her arrival inthe United States. She had only a tourist visa that didn'tallow her to work or live in the country, despite her recentwedding, and had to immediately apply for her green card. It'seasy to speculate why she would marry a man serving a lifesentence, but it was a real marriage, maintains Duren, who wasmarried for seven years before she sought a divorce.

With two little girls to feed, Duren knew she couldn't haveachieved her career goals in her homeland. "I had specializedin leather and was doing some innovative stuff," says Duren,who was designing clothing for European musicians. "It wasvery difficult back then to be an entrepreneur in Germany becausethere were strict regulations as to what kind of degrees you had tohave to train other people. I knew I couldn't hire and trainworkers if I needed them."

In fact, hiring workers would be a long way off. When Durenarrived in America, she had $2,000, which was quickly eaten up byher first and last month's rent in San Rafael, California, andthe purchase of "a very beat-up car." When she ran out ofmoney, Duren pawned two family heirlooms, a diamond bracelet and agold watch, for $600, and bought a sewing machine and someleather.

The car died its final death after a month, and Duren and herdaughters had to sleep in one bed, but the family was goingsomewhere: Keky and Leila were going to day care, while theirmother searched for clients for her handmade jackets. "I wentfrom store to store and pretended I was a rep, and got some orders.Then I'd hop on the bus, pick up my kids from the public daycare and make the things," says Duren. "There was a longperiod when I slept three and a half hours a night."

Too Good To Be True

One day a shop owner asked if Duren could make a purse to matchthe leather jackets. Sure, Duren responded, having absolutely noidea how to pull it off.

"You use different tools for jackets than forhandbags," explains Duren, "so I designed a handbagalmost like a garment. I kind of stumbled across something nobodywas doing."

This first bag was well-received. Duren developed more stylesand began pulling in $6,000 a month in sales. By 1984, she hadattracted an investor, a friend of a friend of a--well, you get thepicture. The cash infusion allowed her to set up camp in a cushystudio and hire five employees. Soon, $6000 per month became$25,000. "This is too good to be true," Durenthought.

She was right. Soon the investor hit financial troubles and tookthem out on her. He yanked all her new equipment and accountsreceivable. Worse, he liquidated her inventory, telling clientsthey were getting the merchandise at a last-chance,going-out-of-business discount. He was going out of business, butDuren wasn't; nonetheless, she now had no equipmentother than what she'd started with years before, and with nomaterials to work with, no money was coming in. After releasing heremployees, Duren was back to where she started.

Fortunately, Duren found out what her investor was up to andmanaged to convince her clients that she was still in business,though she was again a one-woman show. To make things worse, shewas dealing with a more personal dilemma at the same time. On a dayshortly before her investor pulled out, Duren was in San Franciscodelivering her goods to a fashion show when she received a phonecall from a hospital emergency room. Leila had been run over by acar. Chasing after a ball at her baby-sitter's house, she hadrun into the street.

Leila was in a coma for seven days, and Duren remained by herside the entire time, talking day and night because the doctorssaid the mother's voice might awaken the little girl. "Itwas so scary and surreal," says Duren. Keky had witnessed theaccident, felt responsible and refused to go to the hospital. Asidefrom a friend who brought over some food, Julia Duren was allalone.

Refuse To Lose

When Leila awoke, her pelvis and foot were broken, but shehadn't suffered any brain damage. Nursing her back to healthtook two months. Without insurance, Duren faced the medical billsknowing that she barely had the equipment or materials to dobusiness even if she had had the time. When she finally did, shewas 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 folderto present my merchandise in, it was the folder, handsdown."

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

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

Remember Tiananmen Square?

The massive uprising, the demonstrations, the tear gas, thebullets--Duren's factory was in the midst of it. But she keptreceiving reports from the factory that her deliveries would arrivewithout a hitch. Finally, four weeks before a large order was duefor the Christmas rush, there was still no shipment from China.Duren realized she--and her one employee--had better tackle theproject themselves: 800 wallet organizers to create by hand, on topof their other orders, at a $25 loss per item.

When the wallet organizers from the factory in China finally didarrive, they were too shoddily manufactured to meet Duren'sstandards. Although she owed $80,000 to investors and her leathersupplier, she chose to write the shipment off as a loss rather thancompromise herself and sell it. She was forced to file Chapter13.

It took Duren two and a half years of a scheduled four to workher way out of debt, but she didn't spend that time with hermind solely on her creditors. Instead, she applied herselfaggressively to growth, hiring and personally training severalemployees, establishing her factory in a former supermarket inLarkspur, and increasing production. Although she had barelyescaped the 1989 debacle with her business, she had escapedwith her reputation, and companies recognized that no matter howfar set back she was, she'd continue to provide an exceptionalstandard 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 verysmall fish, but within that one store where we were competing, Iwas neck and neck with the real big guys."

Along the road to such success, Duren has given more to herbusiness than anybody could ask of her. Entrepreneurs don'tstart businesses because they envision 20-hour days. Up against herpersonal life, the business has almost always come first. She putthe folder before the yogurt; she put reputation before money; sheputs employees before Julia Duren. "Every single penny thatI've had," Duren says, "before taking a higher salaryor 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 generallysell for $75 to $300, and predicts sales of $1.8 million in 1999.Duren has seen her purses in such movies as Pretty Woman andThe Woman in Red, as well as on the shoulders of womenaround the world. Her factory is moving into bigger digs later thisyear, and Duren's engaged to a financially stable, terrificguy. Everything is going great--but this time, thing'saren't too good to be true. They just seem that way.