Erin Lichy took a big risk when she tried her hand at a fashion line. The Real Housewives of New York star started a handbag business, which ultimately ended up being a money pit. It took a toll financially, but the RHONY favorite bounced back and learned a lot.
The reality TV star spoke about the failed venture during the RHONY season. And Erin again reflected on the experience during a podcast interview.
Erin Lichy says starting a fashion business is next to “impossible”
“I don’t look at it as a failure, but we lost a lot of money,” Erin told Jason Tartick on his Trading Secrets podcast. “Technically, it kind of failed.”
The real estate professional “failed” to the tune of “upwards of over $100,000.” Erin recalls the number as “probably” the starting amount, further noting that the final tally was “more” than $100,000 spent on the business.
Succeeding in the business is unlikely and “impossible,” according to Erin without prior experience or if you “are backed by someone big.”
“You get screwed on minimums in Asia, or if you’re making anywhere overseas, you get screwed on minimums. Then you start making it in New York, and you get screwed on, like, labor costs,” the fashionista explained. “It’s very difficult. We actually really believed in making things in New York and in, like, our studio. We were making them in China before, and I felt very uncomfortable by it for many reasons.”
Erin did the grunt work by visiting factories that she potentially wanted to work with. But she found them “not the way that they say they are.”
“They’re not run properly. Not all of them, but the one that I went to,” she added.
Manufacturing in New York was “slower”
The decision was made to move manufacturing to New York, but the entire process was “slower.” Erin called it a “never-ending battle.”
“You have to go buy materials from Italy that are transported to New York and then you pay the broker fee on top. And then that costs a lot of money and then you can’t make it up in the markup,” Erin explained.
The RHONY star was not able to raise capital. When asked, she replied, “No, and that’s what I learned to never to do again.”
It was a difficult situation but Erin has “no regrets.” Now, she and her husband, Abe Lichy are using the experience to better run their Mezcalum business.
“I ended up selling the name, but on the other hand, it was the best learning experience of my life,” she shared. “I would never know how to build a business the way I’m building it now if that didn’t happen.”
Erin reasoned, “This time Abe and I went into it with a partner in sales, advisors, raising capital.”
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