Beggars’ Purses? The New $80 Accessory

Nina Watkins, one half of the fledgling accessories company Miel, keeps a stash of inventory under the desk in her office at the International Debate Education Association, a nonprofit organization meant to foster democracy among high-school students from developing countries. After 5 o’clock, though, she’s busy faxing designs for a new clutch to Miel’s factory in Buenos Aires and cold-calling boutiques she thinks might carry the new bags.

Ms. Watkins’ partner and childhood friend, Amy Taylor, a second-year law student at CUNY, never let on to anyone at her last job (counseling non-English-speaking immigrants) that she was, in fact, a business woman on the side. “I’d walk in with these huge suitcases stuffed with our bags and people would be like, ‘Oh, are you going away for the weekend?’, and I’d just pretend not to hear them,” Ms. Taylor laughed.

“We’re totally living these weird, secret lives,” Ms. Watkins said of the perils of conducting for-profit business in a nonprofit world.

The two, both 30, first broke into the accessories business five years ago, after Ms. Taylor, who was living in Buenos Aires, noticed a craze among young women there for a certain shoulder tote made from the vinyl seats of city buses. At first the bags were only available at a trendy boutique called Calma Chi Cha in Palermo; seemingly overnight, though, everyone was carrying them, and knockoffs were soon selling on street corners for as little as five dollars. Ms. Taylor also noticed that every time one of her girlfriends visited her there, they left with a bag.

When she moved back to New York in 2000, Ms. Taylor had so many friends ask about her bag that she had an Argentine friend stuff a backpack with as many of the cheap knockoffs as she could and fly with them to New York. The airfare was reimbursed after an informal sale at Merc Bar that week. Later, Ms. Watkins and Ms. Taylor hosted another sale at Galapagos in Williamsburg. “By the end of the night we were walking around with wads of cash in our pockets,” the latter said.

Though neither of them had anything close to a business background-they both come from hippie-ish Manhattan families of teachers, university professors and social workers, attended small liberal-arts colleges and worked at nonprofit organizations-they decided to expand their import operation into a full-fledged company. “We just figured there are all these people who start businesses, and they can’t be any smarter than us,” Ms. Watkins said. “I mean, it’s not rocket science.”

She added that the Small Business Association in Lower Manhattan “gave us a whole load of shit” for not writing a business plan. Nonetheless, the duo barged boldly ahead, naming their small company Chacabuco after a street in Buenos Aires. “We’d just drive around with all the inventory in the trunk,” Ms. Watkins said. “Some of the stores would be like, ‘We need line sheets,’ and we were like, ‘What the hell are line sheets?’ We basically allowed the stores to educate us.”

“We were so unprofessional,” Ms. Taylor said. “We never kept inventory. Stores would call us and we wouldn’t call them back for a week. Eventually we figured it out. We just felt like we knew what women our age wanted to buy, and that was enough.”

Improbably enough, Chacabuco was a success. Stores like Shoe in Nolita and Verve in the West Village sold the totes for around $80 apiece, usually making them the least expensive bag in the store. “We never went through that period where we weren’t making any money,” Ms. Taylor said. “For that year that we were in business, we were very profitable.” Chacabuco bags sold so well, the partners believe, because they appealed to women like them. Indeed, many of their original and most loyal customers were their friends from college: highly educated urban women, gainfully employed and interested in fashion, but without the discretionary income to afford Marc Jacobs or Prada.

“We’re not fancy girls that wear high heels and carry $200 bags,” Ms. Taylor said. “We were trying to create something that we ourselves would buy. Something that’s fashionable, but in a utilitarian way.”

“We wanted it to be affordable,” said the proudly frugal Ms. Watkins. “We wanted people to say, ‘What a good deal.'”

Unfortunately, in late 2001, the people of Argentina effectively overthrew their government, kicking off a period of political and economic instability that made doing business there all but impossible. “All of a sudden, you couldn’t transfer money to Argentina anymore,” Ms. Watkins said. “The factory couldn’t get the material. Even production value really took a dive.”

Argentina’s decision to unpeg the value of its currency from the American dollar changed all that, and the dollar’s new strength there (almost $3 to the peso) has made doing business spectacularly attractive. Ms. Watkins defended the newly renamed Miel-they retired the name Chacabuco after a disagreement with former partners-against charges of outsourcing, America’s latest bugaboo.

“First of all, you can’t do production in the U.S. You just can’t,” she said. “And outsourcing is a tricky thing. Of course we’d like more jobs here. But it’s a globalized economy, and I like that we’re bringing some prosperity to Argentina.”

“We do care about the place,” Ms. Taylor chimed in. “We pay our employees well. We’re not greedy.”

In addition to bags, they also sell some silver jewelry Nina designed and has made in Nepal, and they are the New York reps for the Arizona shoe company Crocs. They maintain that turning their little operation in into anything mass-market would be technically impossible, given that their “factory” is actually a workshop with 10 employees.

There have been some upgrades. Augustin Navarro, an Argentine men’s-wear designer, has helped design some new bags, which they’re selling alongside the original Chacabuco bag. The bags will all be lined now, and they’re hoping to do a men’s version.

To come up with their new name, they went to Barnes and Noble and flipped through books until they found a moniker they liked. It wasn’t until a few months later, and after they had already gone into production, that they found out that there’s another company called Miel. “And guess what they make? Bags!” Ms. Watkins said, bursting into laughter. “This is what happens when socialists start a business.”