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A Model for Development

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How Colombian celebrity Sofia Vergara teamed upwith entrepreneurs in her hometown to create stylish clothing — and steady jobs.

BY PAUL CONSTANCE

(IDBAmerica) - The staff of La Comercializadora S.A. know a good local product when they see one.

For five years, this small company in Barranquilla, Colombia, has provided product design, marketing and distribution services to microentrepreneurs
in the country's Atlantic coast region. The collaboration
has produced a collection of ready-
to-wear clothing and home furnishings
sold in upscale
stores in Colombia and abroad.

But nothing could have prepared La Comercializadora
for the success of their latest venture. Two years ago the company heard that Sofía Vergara—model, television host and rising Hollywood star—was interested in launching her own line of clothing. Born in Barranquilla in 1972, Vergara is one the city’s two most famous exports (the other is pop singer Shakira). Since moving to Miami in 1995, Vergara has graced more than 150 magazine covers and hosted variety shows viewed throughout the Spanish-speaking world. Most recently she has also become a rare Hispanic "cross-over" success, appearing in numerous English-language films and a new sitcom.

When the staff at La Comercializadora heard about Vergara's plans, they quickly put together a proposal showing that she could use designers and garment manufacturers in Barranquilla to produce a world-class collection of clothing at competitive prices. Moreover, the arrangement would provide much-needed jobs for local working-class families.

The combination appealed to Vergara, who is known for her commitment to social causes (see link to an interview with Vergara). In 2002 La Comercializadora signed a four-year contract to design, manufacture and distribute a line of casual and boutique clothing under the "Vergara by Sofía" brand name.

IT WAS A BOLD move. Up until then, La Comercializadora had worked on a relatively modest scale. With the goal of leveraging the potential of Barranquilla’s numerous small clothing producers, the company had helped 30 textile entrepreneurs to form the Cooperativa Promotora de Confeccionistas de Barranquilla (Cooprocon). This cooperative has two goals: to enable smaller producers to attain the critical mass required to handle large clothing orders in short periods, and to provide steady employment for the single mothers who make up the bulk of the textile workforce in Barranquilla.

Through Cooprocon, La Comercializadora had been producing and distributing brand-name clothing and taking production orders from established Colombian manufacturers. The company had also teamed up with local artisans to develop a line of stylish housewares made from wood, glass, leather and natural fibers. A total of 300 artisans now make products under La Comercializadora's Nappa housewares brand. These products are sold in upscale outlets all over Colombia, and as of last year are also being exported to U.S.

Despite this experience, La Comercializadora correctly anticipated that a product associated with Sofía Vergara's larger-than-life image would require a titanic effort. "We immediately hired three local designers and several consultants to help to define the brand identity," recalls Sissi Arias, the company's manager. At the same time, her staff met with Cooprocon's members and began working out the logistics of handling orders for tens of thousands of clothing items in short production cycles.

Within months, the company starting presenting proposed designs to Vergara. "We would send sketches to Sofía in Miami or Los Angeles, she would look them over and ask for samples of the designs she liked," said Arias. "She has a very particular sense of style, and she likes to try on every item we produce."

The local designers soon got a feel for Vergara's tastes, and by mid-2004 La Comercializadora was ready to begin placing orders for an initial selection of clothing. In October and November of 2004 Cooprocon’s members worked around the clock to produce the introductory collection of designer jeans, blouses and halter tops, while marketing consultants at La Comercializadora finalized distribution agreements with large retailers in several Colombian cities.

When the collection went on sale in December, media interest was so intense that La Comercializadora hardly had to bother with advertising. By year-end the Vergara by Sofía line had sold 350 million pesos (nearly US$160,000) worth of merchandise. Nine months later sales had surpassed 1 billion pesos, and they show no signs of slowing. The Vergara by Sofía product line is now divided into two segments, each consisting of 60 individual pieces. One offers casual, affordably priced "street clothes" that are sold in large chain retailers such as Carrefour. The other consists of a pricier, more glamorous line sold exclusively in boutiques.

Today the Vergara by Sofía product line accounts for 80 percent of La Comercializadora’s clothing revenues, which in turn account for 80 percent of total sales (housewares make up the balance). "It's been a very exciting year!" said Arias.

DURING A VISIT to Cooprocon's manufacturing facility in Barranquilla's teeming commercial district last October, workers were too busy to speak to a reporter. They were rushing to complete an order for 17,000 designer jeans that will bear the Vergara by Sofía label.

Their large, well-ventilated workshop has a peak capacity of 150 workers. The entrepreneurs who make up Cooprocon have each contributed 1.5 million pesos towards buying the machinery necessary to handle all kinds of assembly needs. Though each of them continues to run their own shops, membership in Cooprocon gives them access to extra capacity if they take on a large order on short notice.

Cooprocon member Gladys Gil owns a garment shop that employs 33 workers, and she also serves as manager of the cooperative. She talks with evident pride about the workers under her supervision. Cooprocon provides each of its workers with health and disability insurance that also covers their immediate family members, she says. This benefit is worth almost as much as the modest wages, which range from around $130 to $260 per month, depending on productivity.

"Most of these women are the sole breadwinners in their households, so the job is very important," says Gil. “We focus on three things: productivity, quality, and instilling a sense of pride in our their work. We want them to love what they’re doing."

Asked if the Vergara by Sofía is ready for export outside of Colombia, Gil smiles but shakes her head. "We want to have a little more experience under our belt and we want to expand our production capacity a bit more," she explains. Arias says exports have always been part of the business plan for the Vergara line, but she agrees that the product needs to become better established in Colombia first. La Comercializadora will probably begin by expanding into neighboring South and Central American countries, she said, with the ultimate goal of selling in the U.S.

Success in the U.S. market will also depend on the outcome of ongoing trade negations between Colombia and the U.S., Arias said. Either way, competition from Asian producers will be a key challenge for La Comercializadora in the years ahead.

Since it was founded in 2000, La Comercializadora has benefited from an $850,000 grant provided by the IDB’s Multilateral Investment Fund, a member of the IDB group that supports the small and medium-sized business sector. Arias explained that the grant, along with extensive technical assistance by IDB specialist Carlos Novoa, was instrumental in financing the early stages of the Vergara by Sofía product line. "We couldn't have done this without the IDB,” she said.

Republished with permission from IDBAmerica, the magazine of the Inter-American Development Bank.

Originally published January 2006

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