While analysts decry the flat state of the retail industry, the partners behind independent apparel designer and manufacturer Sanctuary Clothing of North Hollywood tell a different story. “Pretty much all of our accounts are up 20 to 25 percent from last year,” said co-founder and partner Debra Polanco. “Right now the products are retailing really, really well. We’re getting a lot of re-orders something like that hasn’t happened, like, in the past two or three years.” That growth is just the tip of the iceberg, said Ken Polanco, the other co-founder who is also Debra Polanco’s husband. “In three years we plan to do $100 million.” He can make that bold statement, he said, thanks to the company’s new partnership with Camuto Group, a Connecticut-based company that started as a footwear designer and has been evolving into a major brand manager of footwear and apparel. On Feb. 4, Sanctuary sold 50 percent of its stake to Camuto. “Sanctuary was looking for a bigger brother,” said Ken Polanco, one “that could take it to a level of lifestyle where we thought we were headed; where our vision is.” The partnership allows Sanctuary to retain creative direction while getting assistance in things like marketing and sales. “We’re very excited to have them on board as one of the brands for this group,” said Hillary Fritz, president of designer apparel for Camuto Group. “They’re a high profile, indie spirit, LA-based company that we felt would be a good fit.” We really believe it has huge potential because their style appeals to so many different types of customers,” said Fritz, “and as the line expands there will be other initiatives such as footwear, (coming in the Fall of 2009) and handbags.” One of the first initiatives of the new collaboration is the construction of an exclusive 2,200-square-foot showroom in New York City, which opened last week. “That will be their very first showroom, devoted just to their brand and with a devoted sales team,” said Fritz. These are heady times for the husband-and-wife team who have been working together for 20 years; the last nine as business partners. Ken Polanco said he has always been an entrepreneur, starting out selling bootlegged t-shirts outside of rock concerts when he was in his early 20s. He went legit not long after that, starting a company called California High Tech that did screen printing. “At the time, I had about 40 employees, at my high point,” said Ken Polanco. “I went from t-shirts to actual cut garments.” It’s also where he met a client who became his wife. Beyond shirts Following Ken Polanco’s vision of moving beyond just shirts, the new couple formed a new company: Rockpool USA. The company was successful, the couple said, churning out about 300,000 garments a month for private labels. But nine years later, the couple was burned out and their silent investors were clamoring to have the Polancos buy them out. It was time to re-evaluate their business and their lifestyle, the couple agreed. Their new direction was inspired by a road trip to Santa Fe, N.M. On a whim, Ken and Debra Polanco took a side trip to the little town of Chimayo, the site of El Sanctuario; a shrine referred to by the archdiocese of Santa Fe as the “Lourdes of America.” Afterwards, the two said they sat down over margaritas and created a list of all the things they liked about the business, and what they didn’t. One thing they wanted, Ken Polanco said, “was to create a sanctuary where we wanted to go to work everyday.” Now they have that with a 5,000-square-foot design facility on Cahuenga Boulevard which is home to about 25 of their 31 employees; the others are in another 5,000-square-foot shipping center nearby. Family business Son Jeff, 29, is sales coordinator and is responsible for international business while Ken Polanco’s 81-year-old mother Bea opens the doors every day and keeps all the paperwork in order. The partnered Polancos live in Toluca Lake with their three daughters, now ages 11, 15 and 16. Ken Polanco runs the “hard” side of the business. During a tour of the company headquarters, he is quick to point out the large plotter and talks about how Sanctuary’s equipment allows them to go from design, to pattern creation, to cutting cloth in one day, if needed. Debra Polanco, the creative lead, oversees two other designers and four assistant designers. On the same tour, she showed off a rack of clothes from their “party” line for 2008 soft rose, cool grey and smooth black with a vintage feel; and talked animatedly about plans for the 2009 spring collection’s colors and fabrics. Sanctuary’s tops, bottoms and jackets, the Polancos say, can best be categorized as belonging in the contemporary market. Most of their pieces retail for between $100 and $200; with about half of sales being to major department stores, like Bloomingdale’s, and the rest to specialty stores, like Anthropologie. “Sanctuary has always been an important part of our casual business,” said Nicole Sewall, a senior buyer for Anthropologie, a division of Urban Outfitters. “We carry them in all of our Anthropologie stores.” That means 109 stores throughout the U.S.: Locally, Sanctuary pieces can be found at Anthropologie in the Simi Valley Town Center; The Oaks in Thousand Oaks; and their recently-opened third area store at the Americana at Brand complex in Glendale. Sewall, who has been with Anthropologie for four years, declined to release sales figures or revenues for Sanctuary’s offerings, but was happy to talk about the clothes themselves. “They suit our customers’ lifestyle,” she said. “They’re easy to wear, comfortable and current.” While that last sentence aptly describes one side of the Polancos themselves, the couple also clearly has a shared entrepreneurial vision. In describing his evolution as a businessman, Ken Polanco said, “First I had the top, then I had the sleeves, then I went to the full garment, and now I need (to move on to) the other parts of the body.” Laughing at that, Deborah Polanco adds, “We want your entire closet.” SPOTLIGHT – Sanctuary Clothing Revenues in 2008: $25 million (projected) Revenues in 2007: $15 million Employees in 2008: 33 Employees in 2007: 31