Interview with Chan Luu
Chan Luu is CEO of Chan Luu, Inc. Born and raised in Vietnam, Luu came to the USA for college in Boston before launching herself as a designer of jewelry and clothing in Los Angeles. Her designs are now carried by stores such as Saks Fifth Avenue, Bergdorf Goodman, and Banana Republic, as well as in high-end stores in London and Japan. We met with Chan Luu in L.A. to discuss entrepreneurship in the design business, how she combines creativity with bottom-line thinking, and the challenges of maintaining a successful enterprise in the fashion world.
Luu: It has been happening for a long time and, of course, it’s always exciting.
Kaizen: But your story starts in Vietnam, where you were born. Where in Vietnam did you grow up?
Luu: I was born and raised in South Vietnam, in Nha Trang. I don’t know if you know that town. It’s more toward the center. It’s a seaside town, very beautiful. I was born and raised there. But mom and dad had business in Saigon, so I did go back and forth.
Kaizen: What was it like growing up in Vietnam at that time, surrounded by war?
Luu: You know, I come from a country that has gone through many different wars. So Vietnamese people are quite adapted to that kind of life, and in Vietnam the war, the fighting happened only in the countryside and along the borders; so if you lived in a city, you saw some fighting—but not every day.
Kaizen: Did you have a strong interest in fashion when you were growing up?
Luu: When I was a little kid, I already showed a strong artistic side, like form, shape, and colors always affecting me emotionally. Smells too—I was very much into food. I have very skilled hands—I like to do things with my hands. That was developed very early on. I didn’t know which direction I’d go, but at that point that was very strong.
Kaizen: Were you interested in business when younger, or did that develop later?
Luu: At that time, no. My parents were very successful merchants. Was I interested in business? No, I wanted to be an artist. I wanted to be in fashion, and I wanted to be a painter, and I wanted to be a full-time, fine art artist. Even though I had that kind of normal life, I lived in a war country, so we had very limited exposure to the western world. But I went to a French high school, so I read a lot which gave me exposure to art and history in Europe, especially in France. But interested in business, no.
Kaizen: You left in 1972 and came to the United States. How old were you at that point?
Luu: May of 1972. Almost 18.
Kaizen: This was before the Vietnam War ended?
Luu: Yes, before. The war ended in May 1975, three years later.
Kaizen: Why the USA and Boston in particular?
Luu: My three siblings—I have two sisters and one brother. My siblings were already here in Boston. I was the last one at home. Then one day I came home from school and my mom said we had to go and say goodbye to a few relatives. I asked why and she said, “Because you are leaving for the U.S., tomorrow would be the last day you could go.” I still don’t understand how she did it, I knew my parents were very well connected, but nobody was allowed to leave the country at that time. She said, “Just make sure you don’t tell anybody you are leaving the country tomorrow.”
She sent me to Hong Kong, actually. I didn’t have any luggage. I went to Hong Kong and a friend of hers picked me up. We bought some necessary things, and I was sent off to Honolulu. It was the longest flight ever. When I was about to land in Boston, I looked down and said, “Wow, this is not Boston, this is England.” So that’s how I got out.
Kaizen: You then went to college in Boston. What led you to choose business administration as your undergraduate major?
Luu: At home I was pre-med, kind of. I come from a culture where parents really dictate what you should do, and my mother is big and strong about that, so mother would say “You either go to business school so you can help me later on or you go to medical school and be a doctor; those are your choices.” When I told her I wanted to be a fashion designer, she said, “I am not going to pay for you to go to school to be a seamstress.” That was how she put it.
So business school it was. Those are not my happy years, and I felt kind of resentful. So I went to the dean of students at the business school and said, “I really want to finish my school sooner than four normal years.” He said, “What do you mean? How? You can’t even speak any English.” It was a semester system, and I suggested I could take six courses per semester so I could graduate in two and a half years. He said he did not think that was possible, but since I was persistent he said, “Okay, show me if you can get a B+ the first semester, and I will let you do it.” So I did—I got a B+ and I graduated in two and a half years.
Kaizen: You then moved from Boston to Los Angeles to get another degree, this time in fashion design?
Luu: My mom wanted me to further my education. In my last semester in Boston University, I was accepted to University of Southern California for my MBA degree. That was the plan. School would start in September of 1975, but the Vietnam War ended in May. I was a foreign student supported by my parents, and overnight I had $300 dollars to my name. I needed to find ways to support myself. Another business degree was out of the question. I was devastated, knowing I couldn’t go home, scared of the uncertain future in the USA, but yet also excited—for once I was on my own.
Kaizen: What did you do next?
Luu: In the summer of 1975, my parents came over and some life-changing decisions needed to be made. When the war ended, we all got legalized right away. We decided California weather would be better for my parents, so we all moved out to Los Angeles.
Kaizen: When did you first have the idea of starting your own boutique?
Luu: I came out here and my first job was working for a bathing suit company. It’s a division of Warnaco called High Tide. They manufacture everything about beachwear, so I got a job there as their vice-president’s assistant. Their head designer, Maggie, really liked my sense of style and often suggested I should go and talk to her sister, who was the head of the Fashion Institute of Design and Merchandising (FIDM) school. So I went and talked to her sister, but since I had no money to pay for my school, she helped me to get a basic grant. That’s how I started.
Kaizen: How long did that degree take?
Luu: It was really hard for me, because I had to work and go to school at the same time, so it took me a year and a half to finish.
Kaizen: Then in 1982 you opened your own boutique in Rolling Hills Estates?
Luu: While I was at High Tide, my friend Sharon, the president’s assistant, was going through her divorce. She and her husband owned a little coffee shop in Manhattan Beach, and since I needed ways to support myself while I was in fashion school, they sold it to me for very little money. The income from the restaurant helped to support me, paid back the coffee shop’s loan and the school loan. Those were hard years, because all I did was work and go to school; but looking back those were the happiest times of my life: school was really fun.
While I was living in Manhattan Beach, I shopped a local boutique. The owner of the store always found my personal sense of style was unique. It’s a high-end boutique, which offered personal service. The owner offered me a job to work there as a salesperson, and I thought, “How in the hell could I do that? I am going to school. I am working day and night at my restaurant.” I said to him, “I really can’t.” But he was very persistent and said, “Well, if you just give me some time working in my store, you can get half off anything you buy.” I was laughing.
I went home and gave the idea some thought. Well, I wanted to get into fashion; I already worked for a manufacturer, and wouldn’t this be a good chance for me to see the retail side of this business? But my schedule was so tight with school, running the restaurant, school projects at night …. But I took a chance. I called him back and said, “You know, I have another job and I have school and I really can’t work a lot, but I could work four hours every Saturday.” And I thought, “Oh my god. That is terrible. He must think this is a joke.” I told my sister, “Who would hire me working four hours a week?” But surprisingly, without any hesitation, he said, “Good, I’ll take it.”
So every Saturday I went there for four hours, and I turned out to be the best sales person there. Then my boss decided I should work with special clients by appointment only. He was a very smart man, thinking that since I only could be there four hours a week, that would be the best way to maximize my time.
In no time, I began dressing a lot of celebrities. After I was there for a while, school, running the restaurant, and working part-time wore me out. Something needed to give. So I decided to quit my part-time job, but my boss said, “Listen, my business is really growing and I need a good buyer with a defined vision, a strong sense of style and your name is on top of my list. I want you to be my fashion buyer.” I think the offer came at a good time, because I had just graduated from FIDM and the restaurant was supporting me, but fashion was my calling. This buying job would give me exposure to the fashion world, so I went for it. I sold my restaurant and became a fashion buyer. This job was a real door-opening for my career. I worked there for two years, travelling all over the country. Then my boss’s divorce put a lot of financial stress on the business, so I decided maybe it was time for me to get out and be on my own.
It was a very interesting time in my life because there were so many changes. At that time my little sister was killed in a car accident. I was trying to adjust to my life in the U.S. and trying to adjust to the idea that this is home now. Financially it was tight because now, besides myself, I had my parents to support. Emotionally it was difficult, because I was torn between staying on my job and getting out and being on my own. But my entrepreneurial gut took over. I decided, “What did I have to lose? I should go for it.”
Kaizen: How did you fund the new store?
Luu: With very little saved money. But as a buyer for two years, I had a really good working relationship with my vendors. And being known as a good stylist, I built up a wealthy clientele. My vendors thought that was a brilliant idea having my own store, and they wanted to help me, because they believed I was a natural with fashion. Many of my vendors shipped me merchandise on credit terms, and I already had a loyal clientele who would not shop anywhere else, so it was an instant success. It was a tiny, little store, 400 square feet, but business was there from the first day.
Kaizen: There are many boutiques in Los Angeles, so what did you do to make yours distinctive?
Luu: From 400 square feet I grew and moved into a store about 800 square feet. I was making a living, but it wasn’t something that would secure my future. Then my sister died. The next year I got married. An attorney, my husband taught me a lot about life in America and American history. I adjusted to my new life in the U.S. with his help. I was doubling my store size and having fun dressing my customers. Once I got married, the financial pressure was off, because we both made a decent living, especially my husband who was a senior vice-president of a major bank.
Kaizen: 1996 was an important year for you—the year that you began designing accessories?
Luu: It was actually a freak accident.
It was a time that my dad died of lung cancer. I was really close to my dad; it was a big loss to me. By then, I also knew I needed a change; I needed more creative challenges. A retail store was fun but not enough to fulfill my dream as a designer, a creator per se. My husband was climbing the corporate ladder, which put a lot of stress in our marriage. When my dad passed away and we couldn’t resolve our differences at home, I knew I needed a big change in my life. I decided to split and went on my own.
I was quite athletic and adored all outdoor sports. It was a freak skiing accident, while I was confined in bed recovering from a torn ligament, that I was toying with the idea of putting some beads together, making some fun jewelry because I was bored! Although I am a trained fashion designer, I sure was not a trained jeweler! But whatever I created and put in my store, we sold. The experience triggered a strong desire to venture out, testing my talent in the fashion design world, so I did just that. I quit retail, jumping with two feet into the design world.
Kaizen: What was unique about your designs?
Luu: I loved shopping at flea markets, and I still do, looking for good vintage fabric, beads … anything that’s intriguing. So, making jewelry out of unusual collectible components created a collection of one-of-a-kind jewelry. A jewelry sales rep took an interest, showed the collection to two reputable high-end shops in Los Angeles, and right away sent me two large orders.
Kaizen: Then you started your design company?
Luu: Yes, in my studio—actually a converted garage!
Kaizen: Was there a key event early on that made you know your business was going to be successful, or was it more a matter of slow and steady growth?
Luu: Actually, it’s a long process. I needed to find ways to gain my market shares, since I knew nothing about marketing. So, I began by finding a good showroom in New York to represent me. Once I had representation, I needed translate all my ideas into good products. I must say the experience of working as an assistant to a manufacturer, a salesperson, and a fashion buyer helped give me a sense of how I should approach this competitive, difficult, and complicated market.
Kaizen: Demand for your designs was going up—which is great, but scaling up can be a challenge. What did you do?
Luu: As a rookie designer in a huge market, I knew I was a little fish in a big pond. What helped me was that from experience I could see things from a buyer’s point of view, a vendor’s, a designer’s, and a retail customer’s point of view. I knew also that I had to find a niche in the market that was not yet fulfilled. I knew I needed to stay focused, have a point of view, and send a clear message about what my collection was all about.
Instead of using this and that, like most jewelry designers would do creating a collection, I decided fresh water pearl should be my main source of raw material, knowing there was no such collection of just fresh water pearl in the market at the time. It was a good decision. The collection was performing from day one and I made a name in the fashion world.
Kaizen: Was this your business education coming through here?
Luu: Actually, I learned everything through experience. I am a self-taught person with a lot of common sense—maybe because I come from a war country—I was taught survival skills since I was a kid, like if a bomb dropped on my parents, we would be on our own. So, I was taught to always think ten steps ahead. If plan one doesn’t work, plan two should be handy. I am structured into that kind of thinking.
Kaizen: Are the best showrooms spread around the United States?
Luu: They are only a few in New York, and I got into the best one. I went and met Jimmy Moore, one of the two owners of Fragments showroom, and told him that I was looking for a showroom to represent my collection. He said, “What material did you use?” I said that my whole collection was freshwater pearl. He said, “I’ll take it—we just mentioned this morning that we need a freshwater pearl collection in our showroom.” So it was perfect timing.
This is the best jewelry showroom in the world, with good infrastructure, their PR department work with stylists, celebrities, magazines … my jewelry began to be seen on celebrities, movies, newscasters, fashion magazines, pop stars.
Kaizen: At that point, is it under your control who buys your product? For example, do you know when a celebrity wears your product?
Luu: When I was represented by Fragments, if celebrities’ stylists pull something, then you kind of know. But once they have credit in Elle magazine and book magazines, then the showroom will let you know. They credit you in the magazine. And that is how it works.
Kaizen: Do you find out about it afterwards or do you get advance notice?
Luu: You kind of know it’s coming. Getting your name out there is very important in my business. The fashion and entertainment businesses somehow are connected, because celebrities need to look fashionable.
Kaizen: Is this about when you opened manufacturing facilities overseas?
Luu: No, it started out that I had this idea about hand-painted seashell necklaces. Using my common sense, I figured with all the hand-painted paper mache boxes I collected from India, there must be some good painters in India. Since the Taj Mahal was decorated with inlaid mother of pearl, India should be a good place for me to start using mother of pearl as component, and find some painters to paint it. Pretty crazy ideas, thinking about it now! Well, the idea took off like wildfire. Actress Jennifer Aniston was photographed between George Clooney and her then-husband Brad Pitt wearing my hand-painted seashell necklace. The business really took off. In my business, certain celebrities could really put your name on the map. That was the first trend I created that created a huge momentum for the rest of my career, and because of that trend I started to explore manufacturing overseas.
Kaizen: Now the business operations in India are contracted out?
Luu: They just paint the seashells. They ship them and we put them together—the assembly is here in L.A. At that time, I had to move downtown, because I needed more craft people working for me, and most of my craft people don’t drive. So downtown L.A. was the most sensible location for a factory.
Kaizen: The seashell designs went big?
Luu: The seashell collection put my name on the fashion map.
Kaizen: Do you have a sense of how many units of the seashell collection you sold? What is the approximate retail price?
Luu: I must have sold half a million of them. At the beginning, I sold it for $18 dollars and I went all the way to $42. It depends how intricate the work is.
Kaizen: At some point you know the seashell trend is going to end. Are you moving in another direction?
Luu: In our business when a street vendor starts knocking you off, as a good business person, you kind of know that it is time to move on.
I am known to be prolific—creating beautiful things comes very naturally to me. Also momentum is everything. When you create a buzz and everybody wants your product, you have to keep the momentum going, keep creating newness, reinvent yourself, being sensitive about your customers’ needs.
Kaizen: Did you end up manufacturing in the Philippines?
Luu: I decided not to, because already I was knocked off from everywhere in that country.
Kaizen: You now have manufacturing facilities in Vietnam and India?
Luu: India became bigger and bigger. I have a factory in India that employs almost 800 people. I don’t own it. I collaborated with somebody I met there and we became really good friends—almost like my second family. I am very interested in craft. I like to use old craft, modernizing it into something new. I like to work with villages. I don’t understand why, but the villages get along with me really well. We connect really well. Everybody says, “How do you do that? I have not seen anybody connect with craft people in the village like you do.” These people are very poor, living in houses with no running water or electricity. But every province in every village has a certain craft and they only know that craft. And they have never had any exposure with the world, so their craft just stayed like that. Everywhere in India, Vietnam, Indonesia, everywhere I have traveled, I have seen this same pattern. But I came in and I gave them my ideas and my vision using their craft. I said, “Okay, using your ancient technique, but do it my way. Do it this way.” And these people are like kids in the candy store. They are like, “Wow, this is really beautiful.” It’s almost like a dance between two people—a collaboration in designing. What I do is very unusual, handcrafted. Every piece is created through many skilled hands. I created a good niche in the market for my products. Since we work with villagers, this line of products feeds and changes many lives.
Kaizen: In 2004 you moved into clothing design, launching your Ready-To-Wear (RTW) Collection. In 2005 you opened your New York corporate showroom, and you followed that quickly in 2006 with showrooms opening in Dallas and Atlanta. Is the RTW Collection a whole clothing line?
Luu: Yes, keeping the same integrity and culture of my company, since we are known for making handmade products. All the garments we make are also hand-beaded and embroidered.
Kaizen: All this growth brings new management challenges for you. With so many locations across the globe and many more people working in your business—were management issues challenging for you?
Luu: Well when my business grew to certain size, I found myself busy running my business instead of doing what I do best: designing. That was the hardest part—learning how to delegate responsibilities. In 2005, I hired a Chief Operating Officer/Chief Financial Officer and Vice-President of Sales. That’s the best decision I have ever made for my company.
Kaizen: Since you are still CEO, what percentage of your work week is actually spent on design?
Luu: I design every day. I have many designer assistants working under me; they realize my vision under my supervision.
Kaizen: Your designs have appeared in many magazines—Elle, Cosmopolitan, Sports Illustrated, Vogue—in movies and television shows such as Twilight: Eclipse, Good Morning America. When high-profile exposure happens, what does your marketing team do to capitalize on it?
Luu: The fashion business is very interesting. I think today everything is about social media .We hire a lot of young people in our company, because you do need young influence to keep up with the fast internet business. Facebook, Twitter, blogging are all very important in today’s fashion business. If anything catches on, within minutes it could go viral—very powerful and scary!
Kaizen: When celebrities like Hilary Duff, Britney Spears, Jared Leto, Megan Fox, Nicole Richie, Drew Barrymore wear your designs, are there ethics guidelines for using the names and photos of celebrities to promote your products, or is that simply an accepted practice?
Luu: We go both ways. We work with a lot of stylists. When stylists pull our products for their celebrities, sure we could use their name. Also, this is Los Angeles, the closest market to celebrities, great exposure market for your products.
Kaizen: Your lines are also carried in stores such as Saks Fifth Avenue, Bergdorf Goodman, Banana Republic, and in high-end stores in London and Japan. But in 2006 you also went online with your Online Store.
Luu: Online business today is the fastest growing retail business, so as a good business person that should not be ignored. We had a retail store before, but we found our online store works so much better for us.
Kaizen: Have you found online marketing to be different?
Luu: It’s the fastest growing business I’ve ever known. It’s exciting but it’s an endless chase, it’s always something newer, faster every day. It’s pretty crazy!
Kaizen: Can you project whether online sales or in-store sales will be more significant to you, or is it too soon to tell?
Luu: I supply many stores globally. My online store is growing by the minute but is still small, but I really believe if I do things right, it will become a significant part of the future of my company.
Kaizen: Your headquarters are still in Los Angeles. Do you also have a showroom here in L.A.?
Luu: Yes, my L.A. showroom is my first corporate showroom. It works really well for me.
Kaizen: Do you have a men’s line? Or is that market too small or not interesting to you?
Luu: I was asked to design a men’s jewelry line for years but was not interested. But just the last two years, all the Japanese pop and rock stars begin to wear a lot of Chan Luu bracelets, which creates a huge demand for a men’s line in Japan, a very important market for any fashion designer. So, yes, I have a men’s line now.
Kaizen: You create five lines per year? Why five?
Luu: Very standard—Spring, Summer, Fall 1, Fall 2, Holiday.
Kaizen: After the many years of successful growth, what are your annual sales currently, if I may ask?
Luu: I can’t tell you the exact number, but it’s in the eight figures.
Kaizen: You’ve been designing for many years now. How do you continue to keep your designs fresh and original? Travel, art, other sources?
Luu: Traveling, art history, cultural influences …. I travel a lot for inspiration. I also am a painter; painting exercises my sense of color, form and shape, one feeds off the other.
Kaizen: You have achieved design success and financial success. Why do you continue to work so hard in your business? Presumably you could relax and work a lot less.
Luu: Knowing me, if I stop creating, my mind might go … sideways! I am in a very good position, although I still work a lot, but every day when I get up and get to work, I get to do the thing I am most passionate about.
Kaizen: What has been the most challenging thing for you about being an entrepreneur?
Luu: Everything today is where I want it to be. I used to struggle more, before my COO/CFO came along. My biggest challenge in business was hiring the right people for the right job in my company. Maybe I don’t have the patience to deal with nonsense. Now it’s perfect because my COO handles that part of my business. I still make all the major decisions in the company.
Kaizen: For younger people interested in becoming fashion entrepreneurs, how important are business or fashion college degrees?
Luu: A fashion design degree certainly will help, but business sense is better learned through experience. To be successful in this business, you need to understand the business inside and out.
Kaizen: In closing, what advice would you give to young people just starting out in their careers?
Luu: Get some experience working for a successful company, stay focused, since you want to be in the trend business, be very aware of what’s going on with the media. Stay true and honest to what you could create, because to be successful, you need to establish a “signature” look of who you are. Be prepared to work hard—it might sound difficult, challenging, but it’s also very rewarding when you make it to the top.
Kaizen: What would you say to people who have an idea and they want to go in a certain direction, but they are wondering whether they could really make it work?
Luu: If you don’t believe in yourself, it is very hard to make it happen. I don’t know how other people think, but if I want to do something, I read up about it. Being resourceful will help. Being relentless is the most important quality. I am relentless about how I approach every project; I won’t back down because my project meets challenges. Your inspiration should be honest. Try not to be a copy cat—it’s an “inspiration freezer,” regardless of how big the knock-off market is. Creating is like exercising. The more you do, the more you could do. Be proactive, on your creative journey, there will be many beautiful surprises coming your way.
This interview was conducted for Kaizen by Stephen Hicks. The full interview will soon be posted at our website, www.EthicsandEntrepreneurship.org. For more information about Chan Luu and Chan Luu, Inc., visit www.ChanLuu.com.