The Fashion Industry Called Their Idea Crazy. Now, Their Handbag Design Is Iconic.
How Monica Zwirner and Lucy Wallace Eustice of MZ Wallace built a booming and beloved brand.
In the Women Entrepreneur series My First Moves, we talk to founders about that pivotal moment when they decided to turn their business idea into a reality -- and the first steps they took to make it happen.
In 1999, when Lucy Wallace Eustice and Monica Zwirner bumped into each other at a farmers market in New York, they were reminded of how much they had in common. Both were young mothers with small children, and they both had a career history in the demanding world of fashion -- Wallace Eustice in publishing and Zwirner in styling before she defected to work in the equally demanding world of high-end interiors.
Both also struggled with the same problem: finding a tough handbag that could keep up with their busy lives. They decided to take matters into their own hands, and MZ Wallace was born. The brand today is synonymous with functional luxury, but 20 years ago, it was nothing more than an idea. Here's how they built a thriving international business.
1. Find a unique solution to a common pain point.
After Wallace Eustice and Zwirner realized they had both been circling a similar idea -- a chic, durable, all-purpose bag -- they got to work thinking about how they could stand apart. "There wasn't a great American nylon handbag company," Zwirner said. "There were great Italian ones and great French ones, but there wasn't something that worked for me, someone who traveled and worked and had small children." To attract other women like them, they wanted to create a high-low solution. "Pairing nylon with expensive Italian leather to create something with a lot of style and function appealed to us," Zwirner said.
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2. Hit the pavement.
In 2000, New York's garment district was still packed with functional factories, many of which have since gone out of business. "You could really get everything in a five-block radius," Zwirner said. She and Wallace Eustice started knocking on doors. "People were eager to talk with us -- there were so many brands that had started in New York that these operations were like, 'Oh, maybe this will be the next Coach!'" When some suppliers were baffled by their idea, the founders knew they were on to something. "We told a leather vendor that we wanted to use his expensive Italian leather on Nylon bags, and he looked at us and was like, "Why?'" Wallace Eustice recalled. "He told us that it was a waste of money, but his reaction proved that we were doing something different."
3. Find what you need.
The women were focused on creating a quilted nylon pattern, which proved to be more technically challenging than many suppliers originally realized. "Nylon slips, so it was hard to get a uniform fill," Zwirner said. As multiple fashion factories told the startup that the quilting simply couldn't be done in a cost-effective way, Zwirner refused to take no for an answer. "I started thinking about products that are quilted, and realized: mattress pads!" she said. "I went through the Yellowpages and called a mattress pad manufacturer in Brooklyn, and he agreed to take on the job. We worked with him for years."
4. Find your sales channel.
Zwirner was hesitant to push into standalone retail, but Wallace Eustice insisted. "I told her she was insane," Zwirner said. Wallace Eustice followed: "When you have a store, you're a brand. Otherwise, we're just a bag in other people's stores." The pair found a space on Crosby Street, a stretch of Manhattan that's impossibly trendy today, but in 2000, MZ Wallace was a trailblazer. "There was really nothing," Zwirner said. Surely, customers started coming, which only buoyed the brand's fast-growing success. "We wanted to have a direct line of communication with our customers," Wallace Eustice said. "If you sell wholesale, you get feedback from a buyer. But we were getting feedback, in real time, from the people who were actually buying our product. And we could adapt production very quickly based on feedback."
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5. Hire for your weaknesses.
With a storefront secured (and a backroom that doubled as corporate HQ), Zwirner and Wallace Eustice figured out what they didn't want to do. "We didn't want to do the books, and we never wanted to get in trouble for not doing our taxes right," Wallace Eustice said. So they hired a part-time bookkeeper. From there, they hired sales support in the store, and have continued to invest in operations as they've grown. "It's easy to get burned out and start to crumble as an entrepreneur when you attempt to do every job," Wallace Eustice said. "We've reinvested in stacking up."
6. Recover from tragedy.
After just over a year, MZ Wallace was hitting its stride. On Sept. 10, 2001, the founders celebrated their biggest retail day ever, a result of an influx of editors in town for New York Fashion Week, enthusiastically checking out the the store to support the young brand. "The next day, well, you can imagine," Wallace Eustice said of the Sept. 11 attacks. "Soho shut down, you couldn't be downtown, and as New Yorkers, all you could feel was the grief and devastation. But you have to be resilient, as a New Yorker and as an entrepreneur -- it's probably the biggest attribute, just not giving up, saying, we're still here."
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7. Celebrate the big wins.
Months after 9/11, Zwirner got a call from Target that would be life-changing for the small business. "They wanted us to produce a promotional tote for a film festival they were sponsoring," she said. Wallace Eustice, who was on a maternity leave, got a panicked call from her co-founder. "Monica called and was like … I think I just got a $200,000 order but I might be making a mistake," she said, laughing. It was the first time the women dealt with such large volumes, and as Zwirner was negotiating pricing, she saw what a difference even 25 cents a unit can make. But she realized that the opportunity was significant. "That order gave us security for a year," Zwirner said. "It was a relief, because we knew: rent is covered, everything is covered, running the business will be fluff. And that was great."