From Failure to Success: The Unlikely Story of a Luxury Handbag Company
A Towering Stack of Unsold Bags
Jenny Lei gazed at the staggering pile of cardboard boxes cluttering her Hoboken, New Jersey, apartment. The $30,000 investment in handbags had failed to yield the desired results, leaving her with a daunting task: to devise a new strategy to sell them. As an unemployed UX designer, Lei had taken it upon herself to create the perfect work bag, pouring months of effort into designing a prototype before ordering a production run. However, four weeks later, she’d only managed to sell a mere 20 totes.
A Turning Point
“My plan failed spectacularly,” Lei admits. “I couldn’t afford to not make it work. A significant portion of my savings was sitting in boxes in my living room.” Today, the 28-year-old CEO and founder of Freja, a New York-based company, has turned her fortunes around. Over the last 12 months, Freja has generated more than $9 million in revenue, including $2 million in profit.
Cultivating Loyal Customers
Lei attributes her company’s growth to building a loyal customer base, drawn in by Freja’s minimalist bag designs and commitment to environmental sustainability. “From the beginning, I thought, ‘Does the world even need another handbag brand?’ Not really, if I’m going to do things the way that everyone else has,” Lei says. “But I thought if I could do it in a way that felt really good to me, and would resonate with a certain group of people… it was worth the try, right?”
The Birth of Freja
In February 2019, Lei, then a soon-to-be-unemployed graduate student at Cornell University, found herself struggling to find the perfect work bag. She tried pairing three different bags with her outfit, but none of them worked. This experience sparked an idea – to create a structured bag with interior compartments and a strap long enough to fit over a winter coat. Lei invested $2,000 in a prototype, which ultimately looked like a “kindergartener’s art project.” Undeterred, she toured factories in Guangzhou, China, and chose one that prioritized transparency and fair working conditions.
The Long Road to Success
Lei ordered an initial run of 300 bags, created a website, and launched a marketing campaign. However, sales were slow, taking a year to offload her inventory. Feeling financially pressured, Lei doubled down, ordering a second run of inventory and investing more in social media advertising. It wasn’t until 2022 that she finally sold enough bags to bring in $1.7 million in annual revenue. This success enabled her to expand her product line, targeting a broader audience beyond environmentally conscious working women.
Explosive Growth
The results were near-immediate. Freja brought in $5.3 million last year, becoming cash-flow positive enough to pay off two loans from Shopify. The company is on track to finish 2024 with $12 million in annual revenue. While Freja may be small compared to industry giants like LMVH, Lei hopes to stay relevant by hosting events, mentoring young women, and constantly evolving her designs to capture a wider audience.
Becoming a Designer
“One thing I kept telling myself was, ‘No one is born a designer,’ but I can become one in a couple of years if I give it a go,” says Lei. “I think now maybe this year I can start calling myself a designer… I think we’ve hit a stride.”
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