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Five MIT Sloan companies to watch (continued)

Julianna RaeJulianne Rae - Juli Lee, MBA '95

Julianna Rae, Rewriting the Rules

In 2004, when Juli Lee, MBA '95, first began laying the foundation for her women's apparel company, Julianna Rae, the odds seemed to be stacked hopelessly against her. An apparel brand getting its start on the Internet—with no stores, no catalog, and no other source of brand recognition—was unheard of. And Julianna Rae specialized in selling high-end lingerie and sleepwear, products then considered very difficult to sell online. Five years later, the company boasts a triple-digit growth rate through nearly every year of its existence, and is on track for the same in 2009 when retail is having one of its worst years ever. Amassing an ever-growing customer base through word-of-mouth and TV and magazine features ranging from The Today Show to Vanity Fair and Lucky, Julianna Rae has rewritten the book on how to start a clothing line.

Much of the company's success, Lee explains, comes down to what is probably the simplest rule of business: Find a need and fill it. “As my friends began to hit their 30s,” she recalls, “they started complaining to me that they couldn't find good lingerie out in the market. The more research I did, the more I saw a big gap between the spot where brands like Victoria's Secret leave off and brands that cater to older women pick up.” Having designed for a number of years for companies like J. Jill, Nordstrom, and L.L.Bean, she knew the apparel market well. Lee also realized that she could tap into a huge buying public above the age of 30. After finding a pair of partners to round out the management team, they dove in and found new ways to handle problems of distribution, marketing, and branding.

Simplicity was a key element to the success of the website. Knowing that the age segment they were targeting was not always the most familiar with the Internet, Lee and her partners made sure that purchasing products on JuliannaRae.com was as easy as possible. Eliminating the cost of shipping altogether erased one of the biggest inhibitors to buying an unknown brand. The way in which the Julianna Rae product was positioned within the market was also important. While most sleepwear and lingerie are marketed with a big bedroom focus, Julianna Rae took another tact. “Our brand is not about being in the bedroom,” Lee says. “It is much more a lifestyle product that is about making the customer feel good. When we first started our photography, we focused more on people doing things you wouldn't normally do in lingerie, to give it a little more humor appeal and a little whimsy.”

The formula has paid off. Over the past few years, Julianna Rae has grown to include a printed catalog, and is now carried in a number of select high-end resorts, including seven of the top 10 destination resorts in the United States as rated by Condé Nast Traveler magazine. And, as if that were not impressive enough, Julianna Rae products have also been worn at one point or another by every cast member of TV's Desperate Housewives.

Lee says her MIT Sloan background has been critical in how she has thought about, analyzed, and planned Julianna Rae from the beginning. “My undergraduate degree is from MIT as well. I think some people may laugh because here I am designing underwear, but design is a very visual and creative process. So much of what you incorporate into design and how you create a product is based on analyzing the needs of your customers. MIT has been critical in helping me build a basis for the disciplined, data-driven way we think here.”

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