Under the Canopy: Organix Style with Soul

Under the Canopy’s corporate mission is to offer stylish consumers a way to help eliminate pesticides from their homes, their bodies and the planet. Its corporate history, however, demonstrates that even merchants with timely and unique ideas such as this can get temporarily blindsided by business variables beyond their control.

This Boca Raton, FL-based catalog sells high-quality, fashion-forward apparel, bed and bath ware, gifts, footwear and accessories made of organic fiber grown without the use of toxic chemicals.

But the company almost didn’t make it out of the start-up phase. A fulfillment fiasco threatened to sideline the business early in its development. The title was kept alive by the tenacity and passion of UTC’s Founder, President and CEO Marci Zaroff whose merchandising philosophy can be summed up in one phrase: style with soul.

The Environmental Component

“It takes a third of a pound of toxic, cancer-causing chemicals to make enough conventional cotton for one T-shirt,” says Zaroff. “Last year, 84 million pounds of such chemicals were sprayed in this country alone, and we’re not the only cotton-producing nation in the world. It’s scary to think what will happen to the world in years to come if we don’t do something to stem this tide of toxic-chemical use.”

Zaroff is not alone in her quest for cleaner, more environmentally sound solutions. Catalogers such as Patagonia and Norm Thompson also have made strong commitments to selling such products. And Nike, Armani, Marks & Spencer, and Timberland are moving into the organic-apparel market, according to Zaroff.

Since its inception in 1996, UTC has designed and sold organic apparel to top fashion models, renowned artists and celebrities. But Zaroff’s mission isn’t simply to clothe the rich and beautiful. Rather, she wants to capture the fashion-forward segment of what’s called the LOHAS market, or those concerned with “Lifestyles of Health and Sustainability.” The Natural Marketing Institute claims the LOHAS demographic is comprised of 68 million people, or 32 percent of the population. These individuals, aware of environmental, health and wellness issues, buy organic foods, recycle and may practice yoga. And they prefer to support companies that are socially responsible and don’t pollute the planet.

Such variables have convinced Zaroff that her business plan is a timely one. “With all of the recent corporate scandals and the turmoil in the world, there’s a rising consumer consciousness to support companies that can demonstrate value and integrity in their product offerings,” says Zaroff. “Our concept of offering organic fashions is unique and timely. We merge art, style and nature in a way that’s sophisticated, soulful and chic.”

Others agree about the timeliness of Zaroff’s idea. George Ittner, a catalog consultant recently named to UTC’s board of directors, says the catalog’s positioning and approach are strong. “The concept of selling organic apparel addresses people’s mentality right now: to be environmentally aware, but also fashion forward. Plus, the styling of UTC’s products is top-notch,” he says. “The organic component adds an appealing dimension to the buy.”

Exclusive Products

About 80 percent of UTC’s 250 to 275 offerings are exclusive. Sourcing is about evenly split between domestic and overseas suppliers.

Exclusive products are designed in-house. Zaroff relays to her designers product ideas, and team members take care of the technical specifications for product development. Occasionally, Zaroff and her team even design the fabric, for instance, specifying an organic cotton blended with angora. The UTC team then has the material made and shipped to a separate production facility that cuts and sews the actual garments.

A small sampling of UTC’s women’s apparel offerings include:
- organic linen skirts and jackets;
- organic cotton embroidered jeans, rib-knit tank tops, capri pants and jackets;
- yoga wear in French terry organic cotton and cotton/Lycra; and
- shoes and bags made of woven hemp grown without chemicals or pesticides.

There’s even men’s and children’s wear made of various organic fibers, as well as sheets, blankets and robes fashioned out of organic cotton. The common denominator among UTC’s organic selections is indeed the high style. The cut, design and colors strike just the right chord among today’s fashion-oriented consumers.

To help inform catalog shoppers about the fabrics used, the catalog displays brief explanations, such as:

Organic cotton

Imagine soil so clean, it produces a cotton so pure, it’s as good for the environment as it is for you. It’s organic cotton, and it’s free of chemicals for at least three years and enriched with organic matter. No synthetic agents added. No harsh bleaches, heavy metal dyes or formaldehyde included. Consider it a gift from Mother Earth and a pure luxury to wear.

The fall 2002 catalog included similar explanatory sections on hemp and Tencel. Next year, UTC plans to introduce products made from organic soy, cashmere, bamboo and silk, in addition to organic beauty products, such as cosmetics, creams and hair-care items.

“To develop the beauty products, we’ll use other parts of the same plants from which our garment fabrics are derived,” Zaroff explains. “This way we’ll efficiently use the whole plant. For example, we’re developing fabrics and personal care items made from organic green tea plants.”

Of course, such non-traditional fabrication methods come with a price: UTC’s material costs sometimes are higher than those of catalogers selling non-organic merchandise, Zaroff admits. This is reflected in the merchandise price points, which generally are on the higher side. For example, an organic cotton angora long-sleeved dress goes for $108, and an organic linen, hand-crocheted sweater from Peru sells for $105.

“We’re very much a gourmet fashion experience,” says Zaroff. “But studies of the LOHAS market show consumers are willing to spend up to 20 percent more for products that are high-quality, healthy and sustainable.”

UTC selects manufacturing partners that share its underlying commitment to organic fibers, fair trade standards and corporate responsibility. The catalog’s merchandisers and their international liaisons ensure that product claims are checked for authentic fabrication, fit and quality, says Zaroff.

Such careful attention to details and maintaining a strong, values-driven mission, is making other merchants, such as Bill Miller, president of Eziba, sit up and pay attention. Miller, a cataloger of artisan-made gifts, jewelry and home accessories, now will carry UTC’s organic apparel. He calls UTC’s product line a good fit with Eziba’s mission and customer base.

Zaroff says wholesaling is a great next step for UTC, because it increases the product quantities that can be produced, which ultimately drives up the company’s margins.

UTC’s USP

Zaroff has extensive expertise in business and the organic industry in particular — and that, say many who know her, is UTC’s unique selling proposition, or USP.

In the 1980s, Zaroff earned her degree in finance and marketing. She then worked for a Wall Street investment bank. In 1990, she founded Gulliver’s Living and Learning Center, a Manhattan-based wellness center that offered natural foods cooking classes, yoga, an Aveda spa and a cafe serving organic cuisine. Within only a few years, the center had 30,000 members.

But by the mid-1990s, Zaroff was ready for a change. “I realized that along with the growing popularity of organic food, yoga and eco-travel, consumers were ready to take the next step: apparel and home goods made from organic fibers,” she says.

She drew on her own sense of style to drive a new consumer fashion trend for which she coined the term ECOfashion®. Today, Zaroff is well-known in the organic-products industry. She teaches courses worldwide on organic fibers; is on the Organic Trade Association’s Organic Fiber Council Steering Committee; and is an anchor educator and active participant in the Global Organic Exchange, a group of companies committed to boosting the organic fiber industry.

While Zaroff’s vision for high-style organic fashions seems like a unique and timely idea, that does not necessarily translate into smooth sailing ahead. As alluded to earlier, Zaroff has a horror story to tell — one that can be viewed as instructive for catalog entrepeneurs.

Fulfillment Fiascos

When Zaroff launched her catalog company in 1998, she outsourced fulfillment to Harrison Fulfillment in Chattanooga, TN. “I did extensive due diligence, looking for a partner who had a track record of superior customer service,” Zaroff recounts. “I talked with some top catalog consultants who recommended fulfillment providers. After visiting each of the facilities, interviewing their clients and carefully reviewing their respective proposals, I selected Harrison.”

And their business relationship began. But within a short time, problems cropped up. Some UTC customers where shipped the wrong items three times, Zaroff recalls. Other customers weren’t called back by Harrison to resolve order problems. Some customers were charged different amounts for the same product.

Unbeknownst to Zaroff, Harrison had designated UTC’s account as a beta test for its new in-house computer system being developed to deal with the impending Y2K problems. “Their plan was to eventually transition all of their clients’ accounts onto this new computer system, and they were testing it on my account without telling me first,” Zaroff explains. “They figured any remaining bugs would be minimal, and with my small volumes, they’d be able to work out any kinks.”

But the system crashed, big time. “Apparently their computer system dictated everything to them, even where to place our products in their enormous fulfillment center,” says Zaroff. “The system completely misdirected my shipments and receipts, so Harrison actually lost my goods in their own warehouse.”

The more Harrison tried to fix the system, Zaroff says, the worse the situation got. “It was a cataloger’s ultimate catastrophe.” She sued Harrison, and the week after she settled, the fulfillment provider filed for bankruptcy. “Personally, I think it’s interesting that I’m still here, but they went bankrupt,” she says.

Zaroff scaled way back on UTC’s operations to remain afloat. She brought the company into her home (then in Randolph, NJ), from which she answered customer calls and filled orders herself. The silver lining to the Harrison nightmare was that she got to know her customers even better since she actually began talking directly with them. “This enabled me to grow my business and get stronger,” she recounts. “All negative experiences are positive opportunities, and the incident with Harrison was a tremendous education.”

But she learned some hard lessons, too. “Even with the best due diligence in the world, you can still get blindsided by something totally out of your control,” she says.

Another lesson: Get assistance from some industry stalwarts. And that’s exactly what she did.

The Incubation Stage

From July 2002 to this past July, UTC was incubated by Seta Corp., a jewelry and fragrance fulfillment and marketing company based in Boca Raton. Seta’s catalog and e-commerce titles include Palm Beach Jewelry, Designer Fragrance Outlet, International Fashions and myjewelrymart.com. And its jewelry-fulfillment clients include J.C. Penney, Sears and Lillian Vernon.

Seta gave Zaroff a low-cost physical infrastructure so she could invest capital back into UTC. Fred Neil, president of Seta, said he gave UTC access to his company’s call center, inventory-control systems, shipping, receiving and other operations. In this way, Zaroff could keep her variable costs to a minimum, says Neil.

In July, UTC moved out of Seta’s headquarters and now operates out of its own 5,200-square-foot space.

“UTC’s strengths are Marci’s passion and knowledge of the organic fiber industry,” Neil says. “She is on the cutting edge of the organic industry, an industry into which many and much bigger players are entering. But her level of knowledge about the style and fabrication of organic materials will serve her well in that competitive environment.”

Neil says UTC’s current weakness is initial seed funding. “The company needs to achieve critical mass in products to grow and be profitable. And with today’s constrictions on capital, that may be particularly difficult. UTC will need this to build a solid contact strategy,” he continues. Those caveats aside, however, Neil thinks UTC’s prospects are good. “Marci has some good ideas, which will help get the word out, and build the UTC brand.”

Challenges Ahead

Zaroff agrees that the funding issue is a critical one. She currently is exploring strategic partnerships with other merchants similar to the Eziba deal. And Jim Gilbert, UTC’s VP of operations, is considering marketing partnerships, such as co-mailings, package insert trades and list exchanges.

“Small mailers such as us are the lifeblood of the catalog industry,” says Gilbert, the former vice president and general manager of Beauty Trends catalog. “Companies like UTC generate more lists and introduce more people to mail order. We’re in that category of companies that grows the entire catalog industry.”

Says Zaroff: “It’s costly to start a catalog from scratch, and a lot can go wrong. But if you have a timely and unique concept, as well as passion and tenacity, you can overcome the very formidable obstacles and pave the way to a successful future.”

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Under the Canopy
Headquarters: Boca Raton, FL
Founded: 1996
Products: Organic apparel, bed and bath items, footwear, gifts, accessories
Sales channels: 90 percent print catalog; 5 percent Web; 5 percent wholesale
Number of catalogs mailed in 2002: about 1 million
SKUs: 1,500 to 2,000
Catalog printers: Quebecor World and Arandell; B&W Press prints order forms

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At a Glance:
Under the Canopy
12-month housefile: 5,000
Average order value: $161
Primary customer demographic: Women ages 25 to 55, HH income of $60,000 or more
List rental cost: At press time, this list was available for exchanges only.
List manager: D-J Associates, (203) 431-8777
Zaroff’s primary target demographic is the LOHAS market comprised of those concerned with “Lifestyles of Health and Sustainability.”