Trendy women’s clothing maker BB Dakota says it has outgrown an operations deal with Irvine’s nZania LLC and has now enlisted help from a Samsung Group unit.
NZania handled the company’s design, merchandising and marketing for the past three years.
BB Dakota, which once shared an office with nZania in Irvine, has moved into a historic shipyard in Costa Mesa that has been renovated into a 12,000-square-foot office.
BB Dakota now is working with Samsung America Inc., a unit of the South Korean conglomerate that is handling warehousing, shipping, technology and order management systems and other services.
“We have put together an amazingly strong and experienced team and have invested the necessary capital to assure a smooth transition and continued success,” BB Dakota founder and designer Gloria Brandes said.
Terms of the Samsung deal weren’t disclosed.
BB Dakota started out as a small, hip clothing maker when Brandes created the company out of her Laguna Beach home in the mid-1980s.
The fledgling company didn’t market its clothes and had a two- to three-person sales force for nearly 20 years.
That changed in 2005 when it started licensing its brand to nZania, owned by apparel veteran Ivan Spiers.
NZania helped BB Dakota fine-tune its operations and took over sales, production and administration.
Through the years, Brandes said BB Dakota’s brand outgrew nZania’s operations.
NZania’s warehousing, customer service and computer systems weren’t large enough for the expanding BB Dakota, which also could no longer be funded by nZania, Brandes said.
“As the BB Dakota brand grew, we mutually agreed it was not a good fit,” Brandes said. “The success took us all by surprise.”
Brandes, wife of financier Richard John “R.J.” Brandes, owns a majority of BB Dakota.
Other Options
A year ago, Brandes tapped Newport Beach investment bank Roth Capital Partners LLC to look at a possible public offering or buyout for BB Dakota.
But a weak economy, tight credit market and uncertainty on Wall Street didn’t foster the right conditions for a public offering or sale to a private equity firm or another clothing company, she said.
Roth Capital instead helped BB Dakota strike the deal with Samsung America.
“I am confident we made the right decision,” Brandes said. “Given the market situation, it was not an ideal time to do an IPO or a sale and this alliance gives us the ability to grow the brand now and decide what to do in the next couple of years.”
The company recently hired an undisclosed veteran in apparel brand licensing and international business who will come on board in January.
“I am not at liberty to mention names yet, but we expect big things,” Brandes said.
BB Dakota is privately held and doesn’t disclose yearly sales.
The company employs 30 workers here and about 20 in China.
It primarily focuses on chic clothes for women ages 18 to 25 through its namesake brand.
Earlier this year, the company launched a junior girls brand called Jack BBDakota and an active wear collection called X BBDakota.
International Markets
The company’s clothes sell at some 5,000 stores in the U.S., Canada, Japan, Europe and Australia including upscale department stores and boutiques such as Seattle’s Nordstrom Inc., Philadelphia-based Urban Outfitters Inc. and Local Color in Newport Beach.
BB Dakota has plans to license its brand and boost international sales.
It makes a good chunk of its clothes overseas and makes some in the U.S.
The company plans to increase domestic production but doesn’t have any plans to bring it in house, Brandes said.
The economic downturn poses plenty of hurdles for BB Dakota as retailers and apparel makers struggle to generate revenue when consumers squeeze back on their spending.
The company has lost some orders because of market conditions but is still opening new accounts, Brandes said.
“I recognize that there are severe economic challenges that we may not be able to beat back even with the success of our specific product and brand,” Brandes said. “Other than that, we shut our eyes and keep propelling forward.”
