Lotus & Luna Looks to Retain Small Business Vibes Amid Growth
Lotus & Luna, a San Diego artisan beachwear and jewelry brand, hasn’t encountered a scrap of fabric it couldn’t breathe new life into.
The company has built a following around its story of sustainability and working with artisans in Thailand to handmake its popular beaded jewelry and clothing that’s resonated across many core surf shops.
It’s come a long way from being a start-up, with a matured vertical manufacturing operation that’s made it nimble against competitors and agile enough to seize on changing marketplace trends.
Pants and single bracelets are seeing rapid growth, with the business expected to end the year up anywhere from 30% to 40% across the roughly 2,000 accounts, or under 5,000 doors, the brand is now sold in. Within the core, that includes Hobie, Salt Life, Quiet Storm, Heritage Surf & Sport, and O’Neill among many other wholesale partners.
“I think we have a unique spot in the market right now,” said founder and CEO Janelle Clasby. “There’s not a clear competitor for certain types of products we have. So, as we grow and we’re able to reach more accounts and they see our product, we’re able to fill a gap that they had. For example, in the surf industry, we are bringing a little bit of a Thailand flair to basic, comfortable items.”
There’s certainly no shortage of competitors selling healing stone bracelets, dainty gold and silver jewelry, or breezy pants. However, Lotus & Luna’s point of distinction is its Thailand connection, with unique prints and local employees who make the company’s products.
Clasby launched Lotus & Luna in 2016 as a wholesale-focused business.
The impetus was the CEO’s love for traveling to Thailand, where she became enamored with not only the handcrafted products but also the people.
She ultimately decided she wanted to help bring some of that Thai style stateside. A donation drive to benefit Thailand in which Clasby partnered with a local San Diego fraternity and sorority to collect medical products, such as rubbing alcohol and first aid kits, connected her with an interpreter who introduced her to a village where she met the initial group of artisans for Lotus & Luna.
“It’s not that it wasn’t started as a business, but there was a strong humanitarian element that almost overshadowed the business element,” Clasby said. “The more that I focus on the humanitarian element, the better we do. It sounds crazy, but every single time I go back to that principle, the company is the most successful. This year we’ve really focused on that and seen very strong success. Is it karma? I don’t know, but it’s definitely unique.”
Category Expansion and Sustainability
The business initially began selling jewelry and kimonos, all made by hand. Since that time, the brand has walked an interesting path to get to its current expanded assortment.
The growth of clothing has led to more scrap fabric, which is how scrunchies and headbands became part of the mix (they’re made from the company’s pants and tops scraps). Some of those scraps are also donated to a non-profit in Thailand that uses the fabric to teach refugees and orphans from northern Thailand how to sew, and it’s also being used to make clothing for children in orphanages.
A tote bag the company introduced at the start of the year was also produced in a bid to use up the excess fabric.
“We thought that (tote) would take care of the scraps, but the volume of the pants keeps going up,” Clasby said.
Currently about 75% of the scrap fabric is donated and the rest is reused for other Lotus & Luna products.
“It could eventually get to a point where 90% of the scrap fabric is donated, but nothing will be thrown away. Nothing will be burned,” Clasby said.
Pants, which is fueling the apparel sales, were introduced in late 2019. However, the company turned very quickly to making masks in early 2020.
“Typically, you can’t upsell a cheaper item to a more expensive item, but the masks fueled huge sales of the pants,” Clasby said. “The masks also fueled the jewelry business. Then, once the masks phased out, the people who bought the pants still love those pants. The people who bought the jewelry still love the jewelry. And, since then, we’ve continued to expand our line.”
While the designs and backstory have drawn in consumers, the back-end operations of Lotus & Luna are agile and enable quick business decisions under a vertical manufacturing model that’s aided the growth.
The company owns its warehouse and offices in San Diego. Additionally, everything from marketing to logistics is handled by the Lotus & Luna team. There’s also a direct connection to the artisans in Thailand, where 40-foot containers are shipped to the U.S. every two-to-four weeks.
“I think that building most of our functions in-house gives us such a unique advantage. For example, we’re not dealing with increased prices from a 3PL,” Clasby said. “We’re shipping out of our warehouse. We’re not dealing with an ad agency increasing their costs. We had a model for fashion shoots, who works in Los Angeles, go to Thailand. So, we had the model, the person who makes the product, and the photographer all there together. Everyone knows exactly what they’re doing. Everyone knows what our top-selling product is; we don’t have to tell an agency that. There’s no disconnect.”
The business counts around 35 employees in San Diego and under 500 artisan contractors in Thailand. However, they’re not disparate teams. People know each other by name and, in many cases, personally.
“It’s changed lives on both sides and if I focus on that, the rest comes naturally,” Clasby said. “I’m most happy when I have something to concentrate on alongside the dollars. The more we support Thailand, the more growth there is on the U.S. side.”
Now, as the business continues to see momentum, Clasby believes it is crucial to continue growing together as a single team where everyone still knows one another.
“We’re still a small business,” she said. “We’re not as small as we used to be, but I want to run it as a small business.”
Kari Hamanaka can be reached at email@example.com.