By Matt Wiebe
CHICAGO, IL—Maria Boustead and Emily Taylor, the Chicago designers that started Po Campo bags two years ago, are taking manufacturing overseas to lower its price points.
The bags, which feature straps or bungees for handlebar or rack mounting, were all made in Chicago as the founders thought enough women would be willing to pay extra for a fashionable bag with cycling friendly features.
And they have seen steady sales, though not enough to allow them to quit their day jobs. Still, time and again the company heard a similar refrain from consumers—we love the bags, but they are too expensive. “It’s an expected response to our premium fashion bags, but we still wondered, ‘Is our price a barrier keeping customers away?” Boustead said.
As a retail experiment, Po Campo cut its margins this year, allowing it to drop retail prices by 20 to 30 percent. Its 2010 line ranged from $90 to $160. This year, prices dropped to $55 to $135. The response was immediate as sales took off and retailers increased their orders.
Many women bought the bags for non-cycling uses. Rack and handlebar straps proved a boon to those looking for purses they could secure to luggage and strollers. And the straps made carrying yoga mats easy. With about 90 percent of its sales through bike shops, Boustead said it’s probably the first time women turned to a bike shop for an everyday purse.
“It was clear: price was the problem,” she said. “Our sales climbed 500 percent. But we couldn’t keep the price down and make the bags in Chicago.”
The company is moving to Asian sourcing for next year. The quick growth in volume means one or both of the founders will work for the business full-time. Previously, Po Campo paid for small production runs. Now it will have sizeable upfront costs to pay for production runs, and it will need to carry inventory.
“We always had retailers willing to place large orders if they could get better pricing. Now we are going to have to use those orders to secure financing for the production runs,” Boustead said.
Po Campo will be able to add pockets and other details kept out of the domestically produced bags because of cost. The increase in volume also will allow the founders to design their own fabric.