Sambag founder finds her fit

Guarding her trade secrets, and a commitment to continually exciting her customers with new product, has helped Sam Wagner turn a little market stall into a thriving retail brand. By EMILY ROSS

By Emily Ross

Guarding her trade secrets, and a commitment to continually exciting her customers with new product, has helped Sam Wagner turn a little market stall into a thriving retail brand.

Sam Wagner’s shoes and accessories business Sambag started out in 1996 in the fertile fashion breeding ground of Sydney’s Paddington markets when Wagner was 26.

Wagner was working full-time as a product manager for cosmetics company Trimex but was looking for a creative outlet. Far from a fashion naïf, Wagner studied fashion and design in London and worked with designers Harry Who and George Gross. 

During a trip to New York earlier that year, Wagner saw a trend for fabric rather than leather bags. She came back to Sydney and created a range of fabric handbags she would call the Sambag.

Wagner took her bags to the Paddington Market in Sydney where she quickly built a loyal clientele who loved the price point (well below mainstream boutique bag prices) and the new shapes and styles she would bring each week. It didn’t take long for Wagner to realise that her hobby had real potential.

She liked the idea of starting her own business, knew it would take hard work and plenty of knock-backs, but was up for the challenge. She left the security of a full-time job and began in a home-based office-cum-showroom, cold calling manufacturers and potential stockists.

Early Sambag clients would buy from her at home during the week, a sure sign that she had potential beyond a weekly market.

Wagner’s first big break came when she self-funded Sambag’s debut at Australian Fashion Week in 1998. In hindsight she didn’t have much to lose. The worst-case scenario was no one would buy the range. “As it turned out, it was a very successful week,” she says.

Ten years on and the entirely self-funded Sambag accessories business has four retail stores in Sydney and Melbourne, and Wagner distributes shoes and bags to 50 stockists, both locally and offshore, including boutiques in Tokyo, Bahrain, Chicago and New York.

The Sambag retail approach:

• Protect your suppliers.
• Keep offering customers something different.
• Keep the price point fiercely competitive.
• Think “affordable luxury”.
• Overdeliver on customer service.

For the first two seasons, Wagner had Sambag goods made in Australia. “But the quality was far more superior [offshore] and soon I began having all the products made overseas,” she says.

Wagner won’t reveal who her suppliers are, and this level of secrecy is not unknown. Australia fashion retailers buying from China often won’t even tell their family exactly where they are going on work trips, beyond “a few hours from Hong Kong”.

The fact that those coveted suppliers can give them goods at the right prices is a huge part of the business success (and healthy margins). No one wants to risk competitors finding out trade secrets. “This is something I work very hard on, and I am not going to openly give this away,” she says.

In 2005, the first Sambag store opened in Sydney’s leafy Woollahra. The deluxe store does not look like a conventional “affordable” accessories store. Wagner deliberately steered away from a conventional shoe store experience, saying she wanted to make Sambag more of a “lifestyle” brand that screams affordable luxury.

There are no cluttered rows of shoes, rather choice selections laid out in chic displays, with only a limited range of clothing, bags and casual wear. Presentation of her bags and shoes is fundamental to the business strategy and keeping stock moving.

As the shopper browses around the store, they encounter little Sambag displays – a pair of shoes, matched with a handbag with perhaps a bottle of mimosa perfume and a cashmere jumper. One of Wagner’s smartest strategies has been to give her customers a retail experience well beyond the standards of similarly priced shoe retailers.

The flagship store has a tradition of serving coffee to customers, a very uncommon practice in boutiques that aren’t selling haute couture. Sambag shoppers may only be buying a pair of $165 made-in-China ballet shoes, but the customer service level is more on par with an exclusive boutique, complete with champagne at store openings and events.

Moving the business into the expensive realm of retail store operations did squeeze Sambag’s margins, but the store really helped cement the Sambag brand. Costs increased but Wagner did not pass these costs on to the customer. For example, she has kept the price of the ballet shoe static at $165. “The shoes have not gone up for over five years,” she says.

As well as handbags, Sambag’s signature piece is a classic ballet shoe. Rather than a vast range of shoe styles, Sambag offers a limited range of shoes made from a range of materials depending on the season. Wagner creates new styles throughout the year in myriad fabrics and materials, from oriental patterns to pastels.

In manufacturing terms, it is a simple shoe to make and is compact to import. The clever thing is the template does not change (less costs), but for customers the shoes are continually reinvented. “People want to see something different all the time,” says Wagner.

The Sambag marketing strategy has been cautious, particular for the fashion world. Wagner does not give away a lot of stock, just Christmas gifts and occasional pieces to the press.

Celebrity endorsements from the likes of Elle Macpherson have kept the brand in the fashion magazines. Trade shows have been important for brand development. Sambag has been included in the New York prestigious invitation-only Sole Commerce trade show where 120 of the best shoe brands in the world exhibit. The show has led to new US accounts.

For now, the marketing budget is being concentrated on an upgrade for Sambag’s online store.

The business is at a fascinating point. Sambag has branched out into selling clothing, including a signature range of cashmere jumpers as well as children’s Sambag shoes and imported lingerie, candles and perfumes. Mother-of-two Wagner is recovering from a new store opening and “everything” in the business is demanding her time.

Wagner knows it is time to think about finding support through new mentors and advisers. “I have had no time to sit and work out who,” she says.

It’s a long way from the simplicity of a Saturday market stall – now being responsible for 17 staff and spending five weeks offshore every year working with suppliers, overseeing quality control and attending trade shows.

But Wagner wouldn’t have it any other way. As she says: “It’s early days yet.”