Learning the Licensing Ropes Helps a Home-Grown Artist Become a Worldwide Sensation

Ruby Tuesday Pick of the Week: Designs by Lolita
Why It’s a Gem: Learning the licensing ropes helps a home-grown artist become a worldwide sensation

Just as Jason Thompson proved that art can be profitable, Lolita Healey has also turned her talent to riches. But unlike Thompson’s Rag and Bone Bindery, Designs by Lolita has taken the licensing route, which has given Healey a whole different ballpark to play in. So far, she’s batting a thousand. (This interview has been edited for clarity and length.)

Lynda Resnick: This week’s Ruby Tuesday we’re speaking with Lolita Healy, CEO and creator of Designs by Lolita. For our readers, describe your business model, please.

Lolita Healy: I license my glassware designs and ideas to manufacturers all over the world. My marketing strategy is to design and create, and then to find the best possible partners to produce, distribute, and market the products. I am up to about ten manufacturers right now, and I’m just getting into about eight other product categories in addition to the glassware.

LR: Tell us what your product line is like.

LH: My core product line is a line of fun, girly, beautiful, hand-painted martini glasses with the recipes on the bottom of the glasses, and wine glasses that are inspired by the special moments in people’s lives. My tagline is “What is your moment?” and it’s all about celebrating, having fun. It could be a moment of disaster. I even have a divorce wine glass. I have something for everyone’s moments, whether they’re good or bad. We try to make people laugh and have a little fun, even with their hard times. So, [the glasses] become a collectible.

I’m in 9,000 stores nationwide. I have a huge following. Retired glasses end up on eBay and other antique and accessory websites and stores, selling for upwards of $400 dollars a piece. So it’s become quite a collectible, and I’ve got kind of a cult following out there with fans.

LR: How did you come up with the idea for your business?

Lolita, founder of her eponymously named line of glassware, Designs by Lolita

LH: I had always been a brainstormer, like you. I get bored when I’m not thinking creatively. I had spent ten years in the fashion industry in sales and marketing and then in the cosmetics industry, so I knew how to launch a product line. After I had two babies at home hanging on my leg, I decided I had to do something. I was going crazy.

It started on a girl’s night out. I was with some girlfriends, and I didn’t have my kids with me, thank god. We were all ordering martinis – this was back in the Sex and the City days –

LR: Right. Better not to have the kids when you order martinis.

LH: Exactly. It was the first time I had ever seen a martini menu, and we each picked a different recipe. I immediately thought, “You know, everyone’s picking something that sort of goes with their personality.” It was interesting.

LR: Ahh!

LH: My disco diva friend — she loved to go clubbing — picked the Appletini, and it just seemed to fit. And then I picked the Cosmo, and then I had someone pick the Chocolatini. She’s a chocaholic. So we all picked something different, and I thought, “Wait a minute, there’s something here … What about a line of products that go with people’s personalities?” Each individual design is so different, as different as each person is. And then I throw a recipe on the bottom. So I just started hand-painting at my kitchen table and selling to friends.

LR: You started your business in 2001. How has your business done during this “Great Recession,” as we call it?

LH: You know, it’s interesting. I equate my line, my glassware especially, to lipstick. Because lipstick is recession-proof. Women will forego a pair of shoes, but they will still buy that tube of lipstick or lip gloss. It seems pretty similar with my product. It’s the happy, fun gift. You only have to buy one, because you’re buying it for one person’s personality. You don’t buy a matching set. You collect them. You give it to the person and then they get hooked and want all of the Lolita designs. It’s just a fun gift under $25.

LR: And you did $54 million in sales last year.

LH: Yes.

LR: Amazing. Fabulous. And do you think your sales will be flat or up this year?

Designs by Lolita: Birthday Girl martini glass

LH: They’re already up. They’re up about 15% in the glassware category, and then I’ve added a lot of new product categories. The glassware category continues to grow. I’m definitely seeing more growth in the wine category. I introduced the wine glasses after the martini, so that was sort of a new product three years ago. And now I’m seeing the wine line grow; there are just more wine drinkers.

LR: Of course. So, how did you start marketing originally? How did you get your line out there to the retailers?

LH: How I did that first was when I knew I had something special. I couldn’t paint enough for my friends and people I knew. I started cold-calling retailers — I was living in Memphis, Tennessee, at the time — and I got in several local stores and could not keep up with the sales. I always knew I wanted to go the wholesale route, versus direct-to-consumer. So I started doing wholesale trade shows nationwide, and over a three-year period I was up to about eight artists working for me, duplicating my designs, and I was designing and traveling and doing the trade shows and writing orders. It was all direct to retail. But I always knew I wanted to [be] licensed.

LR: Tell me how your licensing works.

LH: First of all, you have to get your first one — and that’s the hardest thing to achieve. If you don’t have an agent, it’s near impossible, but I did it. I just worked my contacts, told everyone I knew that I wanted to license this brand, this core product line of fun martini glasses, and eventually I met my current glassware manufacturer. The CEO stopped in my booth [and] was very impressed, [then] launched it in a very small way, so I spent six months without any cash flow. It was a huge risk, because I already had probably 2,000 retailers nationwide. I’m up to 25 factories worldwide now. It’s incredible, but he was a small guy when I found him too.

LR: So, you’ve grown together.

LH: That’s for sure. And the demand has definitely always been higher than what he could fill. Those early days were really tough, because I gave up my cash flow. I gave up total control. But I never gave up control of my marketing or my branding, because I made him call me Lolita even though my first name is Tracy.

LH: Oh, what a disappointment!

LH: My middle name is Lolita.

LR: OK, good.

LH: And I was called Lolita as a child, but I didn’t want him to know I had another name. And I wouldn’t tell him my last name for a long time. I wanted him to believe that this was a brand. I don’t think that he understood branding like I did.

But anyway, how the licensing works is basically you assign your copyrights or your intellectual property to another company, to allow them to use that. And they pay you royalties off of the sales. And I’ve chosen my manufacturers based on their strong marketing arm.

LR: You’ve outsourced everything. What about orders? Who handles the shipping?

LH: The manufacturer does. All of my manufacturers handle all of the orders, and I get a quarterly royalty report that tells me exactly how many units were shipped, and what I sold by design. So I’m always on top of how my designs are doing out there.

LR: That’s a very fascinating business model for people to hear about.

LH: It really is, and it is one that I would highly recommend to women that have a fantastic idea that may not have the resources or the contacts. I think that a lot of women just don’t have those resources, and licensing is one of those ways that you can really get an idea out into the marketplace without any investment.

LR: I’m an operating person, so I look at your design and in my mind I’m already in the Far East finding the factories and doing it myself — which is fine, if you have a huge amount of resources. But there are so many people I talk to every day that have wonderful ideas, but they don’t know how to get them off the ground because they are stuck in the manufacturing hell.

LH: It is. It’s just something I knew I never wanted to do, because I don’t think I’m good with managing the finances. I know my weaknesses, so I’ve always hired people to help me with that. I do have to manage that on my personal end with my cash flow that comes in from the royalties but I tell you, if I had to manage the companies that are doing my product I think I would be dead.

LR: Now, you have to change your POMtini glass.

LH: Yes, I should put your logo on the bottom.

LR: Not even the logo, you should just put the right recipe. And you should say, “POM Wonderful.” I just want the right recipe on the bottom. Just go to pomwonderful.com and you’ll get it. And it is the best POMtini recipe you’ll ever have in your life. I’ve made it on Martha, and we were drinking them at 10 o’clock in the morning.

LH: How wonderful! Well just so you know, my husband and I are addicted to the POM green tea.

LR: Speaking of tea, are you going to do iced-tea glasses?

LH: We’re working on a line of iced-tea glasses. We’re working on a line of glass-tumbler-sized glassware. I’m getting into acrylics, also, which is perfect for the patio and pool.

LR: You will use a new vendor for that. And you will find someone in plastics that will license your ideas and will pay you royalties.

LH: Exactly. We already have them. Those should be launched in January.

LR: Now, you can find these kind of vendors just by going to trade shows and walking the aisles. How do you make sure that they’re honest and that they are delivering what they should?

LH: You know what keeps you honest? Good IP, intellectual property protection, which is good legal. Your contract has to be very detailed. That’s one area that I’m pretty good at by now. You have to make sure everything’s in there, from approving hang tags to the size their logo can be on your packaging, if it’s allowed at all. I’ve gotten to the point where I don’t even want it on there. Their name can be on there, but it can’t be their logo. Full approval rights for designs, the style guide, termination clause, time of contract — that keeps them honest, and that keeps you on top of your business, and that makes you know what to look for.

Designs by Lolita: Beach Bum glassware

LR: I love what you do, and I’m so happy for your success.

LH: Thank you, but I do have one question. You said in your book that a lot of your good answers come from “inside the box” versus the outside. I’m just wondering if you can expand on that a little bit more for me.

LR: What I mean by that is, if I have a problem I have to solve, I make sure that it has content with the product itself. I never hire celebrities to represent my product. Now, I’ll have a picture of Hugh Jackman gulping down FIJI Water, but that’s because he does it organically; I don’t give him anything. He just loves FIJI Water, and so these pictures of famous celebrities including our President drinking pop up everywhere. However I don’t hire anyone to represent the line because the water itself is what we base our advertising message on.

LH: That makes it make more sense to me. I’ve been in situations where I’ve been asked to be on a TV show that doesn’t really have anything to do with my product. It’s just never worked. It doesn’t help my brand to get on the Today Show and talk about body consciousness when I’m selling martini glasses.

LR: Right. You don’t want this borrowed interest. You want your marketing message to talk about your product virtues. But you have to have value in your product to do that. When there is no intrinsic value, people lean on borrowed interest, like celebrity endorsements.

LH: Do you any advice for me as far as getting into more TV and radio and things like that?

LR: You can hire a placement agency. Now, it’s expensive — like $50,000 a year — but maybe for your product it would be much less. They would give out these glasses on the set of TV shows and movies, and people would start using them on television, or in the films.

LH: I’m a little nervous about the whole entertainment industry.

LR: You should be. You have to be extremely careful. It’s a new industry for you. . It operates on a different kind of dynamic than you’re used to. It’s not business as usual. Now what about events? Are you in the goodie bags of movie premieres?

Lolita and a selection of her glassware designs

LH: Yes. My products were in gift bags this most recent Oscars for one particular division.

LR: This is a real expansion for you, but you’re big enough to think about things like this. For a movie premiere, if you had a representative that would go in and just say “Look, we’ll paint the glasses for the whole premiere. It’ll be a keepsake.” If people have an order of 500, wouldn’t you do one for them?

LH: Oh, absolutely. I’ve just never known how to do that.

LR: You could try advertising it on your site, special orders, and then figure out economically what is the minimum that you could afford to do this for and still make a profit.

LH: Thanks. I’m just thrilled to be able to talk to you. I am so impressed with your book, and I’m actually going to get it for everyone on my team.

LR: Anyway, darling, you’re great, and you’re an inspiration.