Sharon Lebon
Co-founder, Three Dots
web.threedots.com
How did Sharon Lebon turn a difficult time into an opportunity and become the co-founder of Three Dots , the company first known among fashionistas for its quintessential knit T-shirts?
Here Sharon answers that question as she talks with Ladies Who Launch about losing big on her first business, dealing with failure, fighting for control of Three Dots, and enjoying success.
Since launching the company in 1995 with fabulously fitted tees, Sharon has expanded the Three Dots product line to include women’s wear, men’s wear and maternity. The designs (love that little black dress to the right!) are carried at more than 3000 retail locations in the U.S., hundreds more internationally, and at select retailers such as Bloomingdale’s, Neiman-Marcus and Nordstrom, as well as the flagship Three Dots store on Melrose Avenue in West Hollywood.
You Live, Lose and Learn
Sharon: “My first foray into launching a business ended disastrously. My husband and I had an embroidery apparel business specializing in knits and clothing with logos. Our clients included such notables as the Ritz-Carlton. It was a difficult endeavor and we eventually sold the company. The individual we sold the company to took the business to bankruptcy and was unable to make the payments to us. Consequently, we were broke - we had nothing. We wrapped Christmas gifts with newspaper!
“To make ends meet, my husband was working as a waiter and I was selling mechanical beds. During this difficult time, I had a fortuitous run-in with a good friend with whom I had worked in a bikini company. After weeks of brainstorming, we decided to develop a high-quality knit T-shirt that was sized well and fit perfectly. At that time, she had a boutique in Palos Verdes and was too busy to launch the business with me but she put me in touch with another friend who was selling high-end leather products. We decided to do the T-shirt business together.”
From Nothing to Something
“We wanted to create the absolute best-looking T-shirt with a flawless fit. It took six months for us to develop the pattern through trial and error. It was grueling. We thought that developing one simple T-shirt would be easy! However, it was anything but easy. We were pioneers at the time; there were no prototypes out there. Creating the product took a lot of hard work and getting through the dark times when doubt crept in required an abiding faith in our idea.
“Finally we had it; we knew it was perfect when we saw the final product… great fabric, fastidious construction, and perfect fit. It looked clean and effortless. When we finally put it out to the retailers we knew, the shirt took off!”
Little Money to Start
“We started on a shoestring - we had $4,000 to our name which we used to buy fabric. We also borrowed $5,000 from one friend and $10,000 from another. We were able to repay them as soon as we shipped. After the initial shipment we were able to find a factor, a company that lends money against accounts receivable, who gave us money every time we shipped.
“Our first shipment went out in October of 1995 and was very small. I think $16,000 was the total amount we shipped. Afterward we took our shirts to New York and were able to show our line at some of the premiere trade shows. Everyone loved our tees. We started gaining real momentum. We became the T-shirt that everyone wanted to have.”
Differences with Her Partner
“Once an idea is out there, everyone wants to copy the same formula. I guess it’s a form of flattery, but inevitably competitors started coming in… success invites many imitators. In order to remain new and fresh, you have to do new things. The business doubled every year until about four years ago… we were stagnating at the same level for about three years. My partner and I had different visions about the future of the company and we disagreed about how to grow the business.
““We had a buy-sell agreement that stated we had to do a shootout. It was a scary proposition and not for the faint of heart. Whoever was the highest bidder would get to choose whether to buy or sell. I had exactly 30 days to figure out what the company was worth and raise money. I was galvanized into action. I searched out advice from others as well as deep into my own heart to determine what the company was worth at that time monetarily…and what the company meant to me personally. Again, it was dark times and I needed to be steadfast in my faith that everything would all come together. I put the energy out there and I won the bid and the company.”
Getting Back to Growth
“Thus, a new era started and I was the sole owner of the company. To actualize my vision for the company, I needed to make bold moves. I surrounded myself with talent… people who believed in and shared my vision for the company. I hired a designer who was Helmut Lang’s principal designer for years. She came to us rather than going to Italy with Prada when Prada bought Helmut Lang. I also hired a sales manager who had the knowledge and capacity to help us grow. Last year we grew the business about 40 percent. This year we’re looking at major growth as well - 25 or 30 percent.”
Best Practices
“Understanding who your customer is and surrounding yourself with people who know how to get you to those customers… and then catering to that market.
“Keeping true to your vision, not going off track. It’s easy for someone to say you should try this or you should try that, but you should never forget your core business and you should not go out of your general realm. You want to maintain your quality. We are considered the top-of-show or world-class of knit… we do knit very well; we feel that we do knit better than anyone else.”
Greatest Challenge
“One of the biggest challenges going forward is converting opportunities for growth into a successful undertaking. A key challenge is selecting the correct opportunity. It takes a lot of research and development if you’re going to go out on a different platform. I think the challenge is staying in knits, but choosing the right way to expand. It has to be a simple idea perfectly executed.”
Before Three Dots…
“I was born in California and moved to Texas when I was about 9 or 10. I attended Southwestern University in Georgetown, Texas. I got my entrepreneurial wings after starting my first company with my husband. It was a small company - nowhere near the magnitude of Three Dots.
“I majored in fine arts and worked within the apparel industry most of the time. I worked at Vanity Fair in the showroom. I was also at a bikini company where I worked with the VP of manufacturing. I stayed in apparel industry except for the period of time when we were broke and I was selling beds.”
… And After Three Dots
“We have built a beautiful home overlooking the ocean south of Laguna. It’s like going home to a little resort. It feels great and I am at peace there. The success of Three Dots has enabled me to be able to do things that I never could before such as philanthropy on a broad scale. We enjoy the performing arts so we donate to the arts. We also support educational funds for children. Being able to tangibly support a cause that you believe in is very empowering and makes you feel good on a visceral level.”
How To Handle Failure
“I’m the type of person who doesn’t look back. If there is a disaster I say, OK, maybe this is opening a door to somewhere else. I’m a pretty positive person and don’t believe in having regrets. We all make decisions that were the right decisions… at that time. If you do something that doesn’t work, you learn and adjust. If I want to do something, I put it in my mind as if it’s already happened, and just go do it.”
Words of Advice: Get a Good Accountant
“You need to have a really great accountant that understands whatever business you’re in.
Our accountant was able to get us credit with companies because of his expertise in this industry.
“We met our accountant through the factoring company and through word of mouth… you really have to talk to people. We went with a small company rather than a large firm. I tried larger firms in my other business, and I just didn’t feel as comfortable. I can call my accountant anytime, and he truly explains to me anything I might not understand.”
30 Seconds on Being Stylish
“Our philosophy is simple, pure and effortless. I think women should try to dress with an effortless feel instead of being too fussy… they need to have an eye for fashion, but keep it more subtle, just a whisper of it.
“I think dressing is quite difficult now. You can do all kinds of layering pieces but…you can put all these things together with different lengths and look ridiculous. Do you wear a short jacket over a long tunic and then do you wear full pants, tight pants or skinny pants? Women need to find their own niche and decide what looks good on them.”
Favorite Way to Re-Energize and De-Stress
“I just started riding and handling horses a couple years ago. I love them. They teach you so much. I keep my horses in San Juan Capistrano. They are fearful creatures… they are constantly looking for things that are going to kill them. You have to be so relaxed when you’re on a horse or you make them crazy. This forces you to be calm. I love to go and get on my horse and hug her and get relaxed.”
