Bagolitas: A $1.5M home-based business

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By Erin Tiesman | Wednesday, May 14, 2008 |

NORTH LIBERTY, Iowa — When Janice Baldes wanted to recycle some scrap fabric leftover from a kitchen project, she didn’t know it would become a successful business venture.

Now in its third year, her North Liberty-based handbag and accessory business, Bagolitas, can’t seem to stop growing.

What began with a few potholders and aprons soon grew into trendy handbags, wallets and eyeglass cases, just to name a few items. Baldes made her early creations in her basement.

As more people began to comment on her handbags, Baldes decided to use money given to her by her grandmother to start a business. As a wife and mother of two, she hosted several parties from home and demand followed.

Soon what was a one-woman operation grew to three women after she hired two seamstresses in fall 2005. By July 2006, Baldes moved into its own building which has now expanded to a 6,000-square-foot facility with a stock room, sewing room and office area.

In all, 23 full- and part-time employees now work at Bagolitas, which is abuzz with phone calls, bright pastels and decorative windows draped with leftover fabric. Employees on the sewing staff work flexible hours and take as many projects per week as they think they can handle.

Mary Jo Harken, who came on board in October 2006, said the easy working environment make it enjoyable.

“I love it here, it’s a wonderful company,” she said. “There’s a great atmosphere of teamwork and I always look forward to coming in.”

Despite Bagolitas’ rapid growth, Baldes said she does not intend to sell her bags in retail, nor does she allow shopping in the business office. All purchases are done through consultants and scheduled open-house parties. Baldes estimates she has around 150 consultants in 36 states— and the number is growing.

“We keep it in the party business because it’s too hard to man retail,” Baldes said. “We don’t want to compete with the consultants.”

Ann Lorentzen is a Quad-City consultant who has been working with Bagolitas since 2007.

“I was in sales for 25 years, and I hated home parties,” she said. “But I bought one of their purses and carried it around. Everywhere I went people wanted to know where I got this purse.”

After seeing the popularity, she decided to sign up as a consultant. As a senior consultant, Lorentzen hosts eight to 10 parties a month — nearly a full-time job, she said.

Lorentzen said one of the other successful facets of the company is the open-house party style that allows guests to come and go as they please, getting the chance to touch, hold and see the purses rather than picking them out from catalogues.

“A lot of it is cash-and-carry,” she said. “I literally sell them out of my trunk.”

Baldes and her company offer an array of designs. Custom-designed purses can be ordered at the customer’s request, and a new style is introduced about every six months. Included in her collections are charity-driven creations such as the Vonnie Bag, an annual purse in honor of her grandmother, a two-time breast cancer survivor, which donates 15 percent of its proceeds to breast cancer awareness. Other bags, like the Black and Gold and Wish Upon a Star, raise funds for children’s medical charities.

“It’s not about money, it’s about culture,” Baldes said. “We’re committed to giving back (to the community).”

Of the $1.5 million made by the company last year, Baldes gave back more than $20,000, including support for a dance marathon at University of Iowa Hospitals and the Iowa Children’s Museum.

Despite what seems to be a large profit, Baldes said building a company and paying the debts quickly diminishes the revenue. Though space is becoming smaller with the increased number employees, she refuses to split up the building between production and offices.

“Everybody stays together,” she said. “Everybody is cross-trained in other areas (of the office) and we want to preserve the culture and family setting.”

In the future, Baldes hopes to expand shows to specialty offerings such as bridal boutiques.

“We’re growing so fast and you can become a weaker company if you grow too fast,” she said. “We want to stay a good company. We want it to be a great company.”

(This story appears in May’s Quad-City Business Journal.)

The business desk can be contacted at newsroom@qctimes.com. Comment on this story at qctimes.com.