Garden Grove-based Three Dots LLC could be the envy of many in the hard-hit apparel business.
The company’s $50 T-shirts and a loyal following that includes Cameron Diaz and Jessica Alba are affording Three Dots some insulation from the downturn that’s hit other clothing makers.
Of course, Three Dots isn’t immune from the fallout of high business costs and consumers shell shocked by rising costs for everyday expenses.
But Three Dots’ yearly sales, at $75 million, are growing. And department store buyers say wearers of the company’s clothes aren’t pulling back or bolting for cheaper competitors.
Most of the women who can afford to buy Three Dots’ casual but pricey clothes still are doing so, according to Ann Stordahl, executive vice president of women’s apparel for Neiman Marcus Group Inc.
“Our customer enjoys the quality and consistency of fit with Three Dots T-shirts and understands that the prices will be higher because of the quality,” Stordahl said. “They become accustomed to the finer properties and understand the premium prices.”
Three Dots makes high-end women’s shirts and tank tops and trendy blouses, dresses, pants and skirts. A plain cotton tank top sells for more than $40. Dresses sell for more than $100.
The company sells to boutiques and department stores including Fred Segal Couture in Los Angeles and Nord-strom, Bloomingdale’s and Neiman Marcus.
Three Dots competes with a handful of upscale casual clothing makers including Ella Moss, Michael Stars, James Perse and C & C; California, all of Los Angeles.
The risk for Three Dots is that shoppers could cut back on
pricier clothes and opt for cheap chic retailers such as H & M; Hennes & Mauritz AB’s H & M; and Target Corp.
That doesn’t appear to be happening, according to department store executives.
“The shirts sell like crazy,” said Erin Bianchi, spokeswoman for Blooming-dale’s at South Coast Plaza in Costa Mesa. “Women like them because they have a flattering fit, they hold their shape and they last a long time.”
The parking lot at Three Dots’ headquarters is packed.
Inside the company’s 76,000-square-foot building, some 200 employees work like busy bees cutting, sewing and packaging shirts, dresses, pants and skirts.
The company’s come a long way since its start in Chief Executive Sharon Lebon’s Costa Mesa apartment 13 years ago.
Back then, Three Dots was a fledgling startup with a goal to make its mark with high-end cotton T-shirts.
Three Dots has been growing for the past three years, Lebon said.
She said she’s grown sales by revamping the company’s clothing line and opening showrooms in New York, Los Angeles, Japan, Australia and other places, which has boosted the number of stores Three Dots sells in.
“We’ve come a long way,” Lebon said.
Lebon grew up in Glendale and worked as a model and showroom girl for Vanity Fair.
She moved to Orange County in the 1980s and started Newport Beach-based Create the Image, an apparel company that made custom-embroidered clothes for hotels and resorts.
Lebon made contacts while running Create the Image. Her connections eventually led her to former partner John Ward, who worked in accessories and designer purses.
Lebon and Ward started Three Dots in 1995 by making shirts and tank tops from fabric that wouldn’t shrink or fade in the wash.
“The idea was to make shirts comfortable to wear when running errands but well tailored enough to wear to the office,” Lebon said.
The partners used their contacts in the industry to get meetings with buyers at boutiques and department stores.
“The shirts sold themselves,” Lebon said.
Growing Pains
Running a T-shirt manufacturing business was another matter.
Lebon and Ward had to learn about working with fabric suppliers and dye houses. Sometimes they sewed shirts all night to meet deadlines.
“There were many times when we thought we’d never get an order finished,” Lebon said.
The partners traveled to trade shows to help get the word out, she said.
Once Three Dots outgrew Lebon’s apartment, the partners moved the company to a showroom in Los Angeles to be closer to suppliers there.
Three Dots eventually started leasing manufacturing space in Los Alamitos and then Garden Grove earlier this decade, Lebon said.
That’s when Lebon said her partnership with Ward began to fizzle.
The two disagreed on most things, from the direction of the clothing line to the location of Three Dots’ designers, according to Lebon.
Lebon led an investor-backed buyout in 2004. She then bought out the investors, she said. Lebon has been at the helm
since.
One of Lebon’s first moves was to consolidate in Garden Grove.
She moved the company’s design team and manufacturing to its current headquarters off of Lampson Avenue.
The move was nerve-racking, Lebon said.
“It was a really big move for us,” she said. “I never thought we would fill up this space.”
Moving all aspects of the business to OC turned out to be one of Lebon’s best decisions, she said.
Communication between the company’s design team and its production crew became clearer and more efficient. That helped the company make clothes and fix problems faster, Lebon said.
Three Dots is one of a few apparel companies that actually makes clothes here, along with Irvine-based St. John Knits Internation-al Inc., Tustin’s Raj Manufacturing LLC and Lake Forest-based Oakley Inc.
Others design clothes here and have them made in Asia or elsewhere.
Upscale Price
Three Dots can afford to produce here since its clothes sell at more upscale stores. But efficiency is a big reason for being local, Lebon said.
“If we have an emergency and need to fix something right away we can do it ourselves,” she said.
Making clothes in OC isn’t cheap, Lebon said.
Three Dots has to deal with the high cost of materials, labor and insurance, Lebon said.
The company could outsource production to lower costs. But Lebon said she likes having control over how the company’s clothes are made.
Making clothes locally allows the company to produce less or more if buyers scale back or ramp up orders, she said.
Three Dots’ “made in America” theme has helped the company win customers, according to Lebon.
“People like the idea of having clothes made in America,” she said.
This year, Three Dots hopes to drum up sales by offering more styles for women, including moms, Lebon said.
Three Dots’ fall collection includes a mix of leggings, wide-leg slacks, fitted dresses, T-shirts and blouses in striped prints and shades of gray, brown, pink and green.
A resurrection of Three Dots’ men’s line is in the works, Lebon said.
The company uses market researchers to help it pinpoint fashion trends before it begins making and shipping clothes.
“It’s like predicting the future,” Lebon said. “It’s probably the most difficult part of being a clothing maker.”
One fashion flop can translate into a dip in sales. So the company sets aside time to work and rework designs before manufacturing, Lebon said.
Three Dots has a following in Japan. The company hopes to grow overall sales by about 45% in three years by selling more clothes internationally.
The company gets its share of buyout offers but isn’t open to an acquisition or a public offering any time soon, Lebon
said.
