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Aaron Luo of CARAA on Handbag Designer 101 Podcast Every Tuesday

Updated: Dec 21, 2023





Emily Blumenthal

Host

00:00

Hi and welcome to the Handbag Designer 101 podcast with your host, Emily Blumenthal, Handbag Designer Expert and Handbag Fairy Godmother, where we cover everything about handbags from making, marketing, designing and talking to handbag designers and industry experts about what it takes to make a successful handbag. Welcome, Aaron Luo, co-founder and CEO of CARAA. I am so excited to have you here as part of the Handbag Designer 101 podcast. In advance, I apologize for my scratchy voice. Hopefully that'll make it that much more interesting here at me on this level. But, Aaron, thank you, thank you, thank you for being here. Yeah, it's a pleasure.

Aaron Luo

Guest

00:33

We've known each other for a long time and I think it's going to be an exciting conversation. Looking forward to it.

Emily Blumenthal

Host

00:37

Yeah, well, I think I am more than you, so let's just jump right in. So you are Chinese, but born in Spain, correct?

Aaron Luo

Guest

00:43

That's right. That's correct. Yeah, I was born in Shanghai, china, grew up there up until fourth grade and then moved to Madrid, spain, and that's where I grew up. I feel very much as much as Chinese and Spanish, as American, just because now I've lived in the States for 20 plus years. Yeah, came to the States for school, kind of stayed, did a bachelor, the business school, the Hoshibank and you've got a nice, responsible, respectful Chinese child should do.

01:03

Yeah, yeah, checked all those boxes, checked them all and followed the path per se. And yeah, it's been living in the US for 20 plus years. I travel extensively. I didn't first come to fashion right away, even though my family has always been in fashion for 20 plus years.

Emily Blumenthal

Host

01:14

Wait, wait, wait. Let's go back Now. What is someone from China moving to Spain doing, and how many Chinese kids were there in your class?

Aaron Luo

Guest

01:21

Yeah, that's a very interesting and funny question. So I moved there because my grandfather moved there. Matter of fact, he was one of the earlier Chinese to establish himself in Spain and because of that, of course, he ended up bringing up the entire family out in Spain and, honestly, there's just maybe a You're on your dad's side. My mom's side.

Emily Blumenthal

Host

01:36

So your dad went along with it.

Aaron Luo

Guest

01:38

Yeah, my dad back then also traveled quite a bit. You're going to realize this is China in the 80s and 90s, right, Right, when the economical and social situations wasn't as desirable as it is now. So you were only child then. I was only child as you do. Yeah, I was, you know, first-generation immigrant from my parents' side. You know they're looking for the good fortune, you know, for the kids and for themselves and so on and so forth. So because of my grandfather connection, of course, you know, I ended up in Spain and it's a lovely country. It's a lovely country, I loved it. But to answer your question honestly, they're just wearing that many Chinese, you know.

Emily Blumenthal

Host

02:05

That must have been hard.

Aaron Luo

Guest

02:06

Like In the early days, for sure, you know, as an immigrant kid, you know, in a country where you know everybody is different Now, given Spain is a very welcoming country, you know. Nevertheless, I think there's definitely that culture shock for me right In the early days. I moved there when I was nine, nine and a half, almost 10. And literally my parents kind of threw me into a Catholic school and all boys Catholic school and zero Spanish. You know.

Emily Blumenthal

Host

02:26

Different uniform.

Aaron Luo

Guest

02:27

Oh yeah, different uniform, exactly, exactly. So, you know, for the first two years it's a healthy combination of not really know what's going on in a healthy amount of fights, you know, as happened in boys' school, seriously, oh yeah, oh yeah, no, I mean you know little boy stuff, but no, it was a very interesting childhood, you know, raising or growing up in Spain. Like I said, it's a wonderful country. As a Spaniard, as I feel, you know American or Chinese, and part of the reason why we ended up starting a second brand, which you know we can talk about that later on, is because I feel very connected. You know both me and my co-founder, so but yeah, it was an interesting childhood, loved it.

Emily Blumenthal

Host

02:54

Not many people can speak to that combo. You know like you are like a double minority.

Aaron Luo

Guest

02:58

It really was. It really was, you know back then, spain was, you know, and I forgot the percentage, but very high percentage, you know, basically Spaniard Catholics, right, yeah?

Emily Blumenthal

Host

03:06

It's not like you were in South America, where, at least Brazil and so forth, there's a gigantically high Japanese population, even Asian. By going to Spain, which is such a uniform culture, like double culture, shock, throw yourself in and then, obviously, being Chinese, you had to, so be the top of the top.

Aaron Luo

Guest

03:21

Yeah, it really was, honestly, some of my most found memories of my life, not just my childhood. It really happened in Spain. My best friend in my wedding was my childhood friend from Spain. Every year I go back I still see all my friends and we catch up and goof around Anyway your wife is not from there, she's from here. That's right. My wife is American. Yeah, she's from there.

Emily Blumenthal

Host

03:37

So you went there. And then what made you say that, ok, now being in Europe, that gives you an edge, because you could have honestly gone to any university. Why come to America and pay full price?

Aaron Luo

Guest

03:46

Yeah, that's a great question. Sounds like you really know your stuff. You kind of know it and navigate you through the different educational system. But yes, growing up in Spain, easily you could go to a top university for free.

Emily Blumenthal

Host

03:56

Really $1.50, if anything.

Aaron Luo

Guest

03:57

If anything. Matter of fact. I mean I think back then they didn't have these kind of programs, but later on they actually even subsidized your school right Paying to go to school and all that. But could? You imagine that I know, I know right, I know.

Emily Blumenthal

Host

04:08

What did I do wrong?

Aaron Luo

Guest

04:10

But I love the US In the summers. I have family in the States right. So when I was in my teenage years I always spent well, no, always, but two summers I spent in the States, loved it Well, my family is in Maryland but I traveled quite a bit. When I was in my teenage years through YMCA program, I came here, did the consular thing. It was hilarious.

Emily Blumenthal

Host

04:26

That must have been amazing, like coming in being, like wow, look at me, I could carry so much weight. I'm still a foreigner.

Aaron Luo

Guest

04:33

And you know what? And I feel very connected with America to a certain extent because, truly, I saw a lot of Asian Americans, to your point, earlier, coming from Spain where I saw maybe two Chinese kids of my age to come to the States.

Emily Blumenthal

Host

04:44

It's such a diverse community, you were like oh my god, they're more of me. Who knew?

Aaron Luo

Guest

04:47

There was bubble tea and Chinese food which back then did not exist in Spain back in those days. And so Filipe Lov Filipe Lov for the country also really saw the opportunities that this country represents. Spain as wonderful as a country economically it's not as advanced as countries like the States and I wanted more. I had that fire in me, I guess you can say, to really make it for myself, and obviously I don't think I ever said this in public, but staying away from my parents or being away from my parents, it's exciting.

Emily Blumenthal

Host

05:14

Exactly Like Lord, I can go to college and without my parents breathing in my neck and just be Like, just finally not have to follow and do what's expected, stay out late, drink, do all the crazy things and God forbid you ever did anywhere else. That's right, pre-social media, of course, so they would have no account of knowing.

Aaron Luo

Guest

05:31

No idea what am I doing. There's a monthly phone call, if any. That's kind of it. The only rule or condition I guess they put forward is that I had to study engineering oh my god, which, honestly, in hindsight, I'm glad I did just because you told me how to solve problems. I honestly did not really care about electrical engineering. I mean, do women ask me how certain complex circuits work? Because I really didn't care too much.

Emily Blumenthal

Host

05:52

I got to tell you you're not the only Asian designer I've worked with who had a suggested and then, in parentheses, forced major of engineering and it's like, well, it wasn't all bad, because now I know how to make things, I know how to reverse, engineer, how to take things apart and see things in black and white as opposed to like let me just start a business, let me just become a designer, let me just go into something that I know absolutely nothing about and try to be a success.

Aaron Luo

Guest

06:13

Yeah, no, I think you're right on, and that was the thinking right.

06:15

And I think you know bless my parents hard in terms of wanting to build a for me right in a certain path or a certain way. Like I said, I walked away with basically the problem solving skills. I think that's the key. I'm old to what I knew. I was going to go to the business school after. I didn't want to go to the business school right away, but my parents are entrepreneurs. They always have been. I grew up in the early days washing dishes and, you know, waiting waitress and tables.

Emily Blumenthal

Host

06:36

What did they have? What was their business?

Aaron Luo

Guest

06:37

Well, they were still entrepreneurs. So we started with a chain of Chinese restaurants back then. Wow what?

Emily Blumenthal

Host

06:41

was it called?

Aaron Luo

Guest

06:42

Well, there were a couple. The names were typically typical Chinese, chinese restaurants. One is called yinbing, which means translates to welcoming, and the second one is called gas at the bamboo, which translates to house of bamboo, you know. And then we have another one called me son, you know. There were a few others that we, you know they either helped to operate or invested in, but point is that I grew up watching them and then, later on, seeing that anything was possible, like, hey, let's just start a business.

Emily Blumenthal

Host

07:03

And here's the template we know what to get, we know how to build, we know how to serve. That's right, that is gold.

Aaron Luo

Guest

07:08

I mean for a child yeah, I agree, 100% for a child. You know I grew up understanding the value of hard work. This restaurant, you know, you know mostly, but you know hard work. You know customer service, yeah. Supply chain, you know if you really kind of translate to big words like supply chain. So you know, again, hated it back then when I had to watch dishes you did Fridays, but no but tell me great values. But later on they switched to fashion. They had an opportunity to basically start working on supply chain and fashion hand back specifically.

Emily Blumenthal

Host

07:34

Actually I didn't know that. I didn't know that that ended up being a heritage business for the Luol family. I had no idea.

Aaron Luo

Guest

07:40

Yeah, we were fortunate enough to work with several large Italian luxury brands.

Emily Blumenthal

Host

07:44

How did the switch over from food to fashion happen, which doesn't?

Aaron Luo

Guest

07:48

Well, through a series of investments actually Basically started with investing in a factory, then some opportunity to operate the factory, building a network. Then, through our roots in Europe, a lot of European brands start to. You know, my dad is a good networker and ended up being acquainted with a lot of brands.

Emily Blumenthal

Host

08:04

They moved back to China or they stayed in Spain for all of us.

Aaron Luo

Guest

08:07

A little split, you know. So it was a little bit of part of the family in Spain. Part of the family started operating in China. Like I said, fortunately for us, that was the time where a lot of European brands started to venture into China to expand their manufacturing footprints. We did have actually a small factory in Florence as well and ended up actually closing that and trapped me up basically fully moving to Southeast China and so yeah, so that's kind of you know what?

Emily Blumenthal

Host

08:30

What were you when all this was happening? Were you out of college?

Aaron Luo

Guest

08:32

Were you still in college? I was in high school. I was in high school.

Emily Blumenthal

Host

08:35

So this? You were still living in Spain when the school evolution went from food to handbags and now everybody's having to get acquainted with leathers and silhouettes and how materials and structure and just throw. I bet your home was then all of a sudden filled with a whole bunch of samples out of nowhere.

Aaron Luo

Guest

08:47

Samples everywhere. So I was that kid that said, instead of watching or reading you know, video game magazines, I was reading Vogue just because that was the only thing around. You know, my parents, basically you know, had all these fashion products and magazines and materials where you know, as a little kid that was the first thing that you pick up when you were on the house and saying so really kind of got a sense of fashion introduction for my parents. You know, venturing to the fashion world from that perspective and fascinated by it, love you know the fashion side of things. I actually was a lot more interested in the retail side of the things as far as, like you know, the different stores that the brands open and, of course, fascinated by the glam you know, who wouldn't be fascinated by that side of the fashion.

09:22

You know, also kind of got very interested in the manufacturing side. You know, I think most people if you haven't really been in a manufacturing environment or setting right and you know this, emily, you're working to a factory and it's mesmerizing. I mean there's some factories that you probably don't get mesmerized, but you know, and I've been in those, yeah, there's a lot of them. There's like wow, you know, like this is where you know a Prada bag comes to life. Or you know where you know a Dior bag comes to life right, let me ask you that something.

Emily Blumenthal

Host

09:45

So where did you go to college?

Aaron Luo

Guest

09:46

University of Massachusetts in the States. Okay, so you're there.

Emily Blumenthal

Host

09:50

You've escaped your family, thank God by. I get a monthly phone call, if that, whatever, it's really interesting to me, because anybody with a background like yours I didn't even say like mine the mindset is that was interesting. I'm sure I learned a lot by asoasis, but it's the last thing I'm ever going to get involved with. I've no desire nothing. I'm going to go into something totally different. So when you accidentally end up going back into it, it's almost like your head is kind of down when you go to your parents being like so hey guys, I've got an idea. Hey guys like, or was it your parents like, listen, when you're ready, you're coming back. How did all that manifest? So you graduated in MY yeah it's the former.

Aaron Luo

Guest

10:21

It's very interesting. So I was very fascinated by the whole fashion thing. But I knew that I didn't want to just do manufacturing and supply chain to a certain extent, especially back in the-.

Emily Blumenthal

Host

10:29

Interesting, but not sexy.

Aaron Luo

Guest

10:30

And not just that. I feel like in the early 2000s I feel, especially once I started getting educated with American education, I started learning about supply chain operations and so on and so forth. To a certain extent I feel that was a little bit of a commodity, to a certain extent Totally In the sense that with the right connections which a lot of people have connections with the right connections and with a little bit of perhaps, rigor or discipline, you could get into a really great factory. You don't need to operate it right. To an extent, what really fascinated me was the branding side Brand branding, retail. So that was very fascinating to me.

10:58

I don't think I'm that smart of a business person, but I was smart enough to know that I did not have what it takes to run a brand or know a company. So I knew I was foolish if I was going to go back to my dad and say like, hey look, I'm graduate from college. I did what you said. You know I'm a big man now coming out, let me get an executive position in the company, right. I mean, first of all he probably would slap me and say you know, no, you're going to start in the warehouse, right, and by the second of. I just knew I didn't have it right. So I, right after college, I actually wanted to go and work for an American company. There's a several in my mind that I really wanted to work for, really to learn process, operations, finance. You know there's certain functions and skill sets that I think any business person, whether you're in fashion, whether you're in tech or whether you're in any other industry if you don't have it, I think you know you are handicapped.

Emily Blumenthal

Host

11:38

Well, you just called that a very important point of this recognition to get paid to learn. And a lot of people, I think, don't see the value in that or just want to try and skip steps. But by skipping steps you not only lose time, lose money and the sunk costs of that learning curve are extreme. So you know, check, check to you, Aaron, for figuring that out very early, saying let me figure this out, Let me learn something else, Let me have someone pay me for it and then see what I need to do.

Aaron Luo

Guest

12:01

Yeah, and that was the idea that I wanted to trip. I wanted to fail to certain extent. Right, I wanted to get beat up On somebody else's time. Well, somebody who is not going to be cuddling me, right? Because you know, the reality is that if you join a family business and your family, your uncles and your dads are the head of the family, you're going to get cuddled you know you're going to get cuddled? Well, I think in Chinese culture.

Emily Blumenthal

Host

12:18

Yes, you know, even though I think you know, abusive, but abusive on the inside, but cuddled on the outside.

Aaron Luo

Guest

12:23

Yeah, and the worker right. You're going to start from the bottom and even your managers will treat you differently. I know this because I've seen it right, right, so, of course. So I wanted to get beat up a little bit on my own by Western cultures to a certain extent, and I got my fair share.

Emily Blumenthal

Host

12:33

Because you hadn't been enough already.

Aaron Luo

Guest

12:35

No, because I mean you know you go through college and I drug around. The college is somewhat of a vacation to a certain extent. No, no, in the best of ways, right, because I mean you are in such a kind of controlled environment. You're there to learn, you know, yes, you have off campus jobs, but come on, let's face it, those are oh yeah, you know what I mean. Like it's 100% yes, so I love college. I mean I was like this is heaven.

Emily Blumenthal

Host

12:55

I mean, I could go back like magic magic. I know. I feel the same way like walking around with a backpack, being stressed about a test. Come on, give it to me. I know, I know.

Aaron Luo

Guest

13:04

I know, so yeah, so I really wanted to. Like I said, the key thing is I knew I didn't know finance, I didn't know operations. You know I didn't know processes, I didn't know the rigor of quarterly closing or short term outlooks. I mean, you know, there's so many things I learned from General Electric. So you know, general Electric, ge, was one of the key brands of businesses that I really, really wanted to join. Back then I read a book from Jack Welch.

Emily Blumenthal

Host

13:23

I didn't feel he was like this on the cover yeah, yeah, yeah. Yeah, I remember that.

Aaron Luo

Guest

13:28

He actually went to my school and if he's fraternity actually was next to my fraternity and anyways, I got exposed to GE very early on in my days in college and love the concept of conglomerate, got fascinated by the company in general and I said, look, there's few, right, there's McKenzie, the GE, there's few owners out there. And I said if I was going to pick a company to work for, these are the guys right that I need to kind of come at you. Then, fortunately enough, I was in offer a great role with GE actually back in my junior day, so they locked me in my junior year.

Emily Blumenthal

Host

13:53

That's amazing. Yeah, the magic to the magic summer top. Like we want you back, that's that was.

Aaron Luo

Guest

13:57

that was very lucky. That was very lucky. I mean, you know, I like to say that I do work hard. That's cool, but it was true and come true. So, you know, spent 10 years with GE, primarily in operations and finance, dabbling into merchant acquisitions a little bit too. Towards the end, before I left, I was a CFO for one of their operations, which was very young for you to be doing that at that age.

14:13

And that's the reason why I wanted to join GE. Right, there are several companies that I knew that they, if you're good and you're willing to work your butt off like truly your butt off and you're willing to make certain sacrifices, they tap you, they give you the opportunity and, which is something to be said about, you know, ge now, for GE, it's in a different spot now, you know, and and all that. But so that was, truthfully, one of the things that really kind of inspired me to join a company, because I knew that if I did good and work hard and accelerated, that, I could go far at a young age, because I didn't have a lot of patience, I didn't want to spend, you know, lifetime learning, and then, yeah, and then wait, yeah, yeah, yeah.

Emily Blumenthal

Host

14:43

So at this point now you have a friend colleague named Carmen Shenwu, so I know you have some history with her and a lot of people assume that she's your wife's last partner. She is none of the above. None of the above. And talk a little bit about how that came to be. Like because I know you knew her from your childhood, and like how did all that? Like, hey, let's just start a handbag brand, let's give it a name, it after you and, by the way, my wife is going to know that I'm with you all the time, and it's like a very interesting dynamic. So talk a little bit about that.

15:14

Yeah, yeah, that's about the juicy stuff, right A lot of people don't know that I mean right now, because I'm privy to that, because you were through the handbag awards. We had a micro licensing deal that never went anywhere. Thank God I'm so happy it didn't because you know you pivoted right after not taking credit for it, but maybe I will a tiny bit but for you to speak about how Carmen Chen would came to be and then what prompted Kara to magically appear right after, yeah, no, it's been a wonderful journey.

Aaron Luo

Guest

15:37

So, right after you know the whole thing I mentioned about GE and business school and all that you know, back in 2012, 2013, I was ready to take that jump right. A lot of things just fall into place and I said this is it. I was in my early 30s. Okay, so that's honestly also part of the reason why I said it's even either now or yeah, or I will say never, because I see a lot of successful entrepreneurs that started in the 40s, even 50s.

Emily Blumenthal

Host

15:59

But for you it was now or now.

Aaron Luo

Guest

16:01

That's it for me. It felt right, you know. It felt that the timing was right.

Emily Blumenthal

Host

16:03

There's a lot of things in the family side of things that also were ready, and you obviously seemed to nice chunk of money to give you this buffer to start a business because you can't do it for.

Aaron Luo

Guest

16:12

Not enough, but not enough. But yes, you know, it was planned to certain extent. I like to say it was planned for a long time. Reality probably was planned more like six months, and I knew I want to be in fashion. I knew I want to be in the handbag because of the leg up that my family has in the supply chain of the things. But I, again, was smart enough to know that I'm not a designer, right, I don't even know how to draw, you know. To be honest, you know, like it's, I think I'm a good merchandiser at this point, that's just as important, if not more, I think.

16:36

I would agree. But you know, I said to really create a contemporary handbag brand and I've seen it from other brands that my parents either helped or invested in. So you know, I've seen a lot of kind of evolution of all the brands on the sidelines and I'm like this thing's never going to go anywhere without just a rock star designer Right and, interesting enough, so Carmen is also from Spain. So Carmen Chen Wu is my co founder and the spirit animal of our brand, the muse and the spirit animal, and she's the core of of Kara. You know, now I can say this.

Emily Blumenthal

Host

17:05

If you ever wanted to start a handbag brand and you didn't know where to start, this is for you. If you had dreams of becoming a handbag designer but aren't trained in design, this is for you. If you have a handbag brand and need strategy and direction, this is for you. I'm Emily Blumenthal, handbag designer expert and handbag fairy godmother, and this is the handbag designer 101 masterclass. Over the next 10 classes, I will break down everything you need to know to make, manufacture and market a handbag brand, broken down to ensure that you will not only skip steps in the handbag building process, but also to save money to avoid the learning curve of costly mistakes.

17:35

For the past 20 years, I've been teaching at the top fashion universities in New York City, wrote the handbag designer Bible, founded the handbag awards and created the only handbag designer podcast. I'm going to show you like I have countless brands to create in this in depth course, from sketch to sample to sale. Whether you're just starting out and don't even know where to start to begin, or if you had a brand and need some strategic direction, the handbag designer 101 masterclass is just for you. So let's get started and you'll be the creator of the next it bag. Join me, emily Blumenthal in the handbag designer 101 masterclass. So be sure to sign up at Emily Blumenthalcom slash masterclass and type in the code podcast to get 10% off your masterclass today. How did you find to reconnect with her collector? And again, I know that. How many Chinese were there in Spain at that time? You know each other at the meetings, no, no no.

Aaron Luo

Guest

18:20

So our families knew each other from the Spanish days, right. So my grandfather, like I mentioned before, he, was one of the early Chinese to establish himself in Spain and he was a lawyer. He was a lawyer by trade and he also happened to love the Spanish culture and the Spanish language and because of that he picked up Spanish very early on and, in translation, he essentially used his skills to help a lot of entrepreneurs in Spain to start Chinese restaurants or other businesses. You know, as you can imagine, if you move from China to Spain, even if you had funds to invest in, unless you know the local language or so, and so for you, you need a lawyer, basically on your side, to start.

Emily Blumenthal

Host

18:53

You know businesses and we also need to know how much of the Chinese food needs to be Chinese to sell. So, having been in Spain and studied in Sevilla and Asturica, they all have been all over. Like any Chinese restaurant you go in as a especially in as an American you're like, please let them have something that I can identify with. So understanding the sellability of a customer is like just important.

Aaron Luo

Guest

19:11

That's right, because you know. You know a lot of dishes are actually quote unquote translated to Spanish pellets. Right, they're not Truly authentic. Now things has changed, but back then, right, you know, a spring roll is not a spring rolls that probably we're used to in the States or in China, right, which like a very thin cross, you know, a lot of juicy veggies inside, with a piece of meat in Spain's totally different, very thick cross, another very juicy. Anyways, it's chance like I would love to.

Emily Blumenthal

Host

19:31

I mean, your next back should be like called a Spanish spring roll, because I think there's so much in that, right there. That's a whole story itself.

Aaron Luo

Guest

19:37

Okay, so your grandfather, new Carmen's grandfather grandmother and, and you know, honestly, I just do a little research in the States and just stumbled upon Carmen. You know she's, of course, a CFDA awarded fashion designer, now top of the class in Parsons. You know one, numerous awards beforehand, and Happens to be Chinese from Valencia. You know which is it?

Emily Blumenthal

Host

19:55

So not so common not common at all.

Aaron Luo

Guest

19:58

And what?

Emily Blumenthal

Host

19:58

you're just digging for designers and looking for someone who is Chinese, like how did you like?

Aaron Luo

Guest

20:02

it was a combination of things. It was a little bit of that. It was a little bit of, you know, talking to my parents as far as you know what venues and what different areas I can, you know, kind of tap into and they brought up. Hey, you know, I think you know so-and-so's granddaughter. Actually it's in the state. It's just wild, right? Wow, you know, it's really fate.

Emily Blumenthal

Host

20:17

It's really a unicorn story in a sense that there's a staying in Yiddish or German, however you want to call it. Called the shirt and it is written like this was predetermined, predestined to happen.

Aaron Luo

Guest

20:26

Yeah, no, it really was, it was magic, and because you know how many times can you say that everything just fell into place. All I watch right is that I'm ready to start a brand hand back specifically contemporary. You know that then Carmen was ready to do a very similar kind of a jump right in terms of a career and when you reached out to her, was she like who are you?

Emily Blumenthal

Host

20:42

or my grandma told me you were calling.

Aaron Luo

Guest

20:43

No, no, she didn't know. She didn't know it, but the introduction was that. Hey, you know, I think our grandparents know each other. Matter of fact, they did business together, right?

Emily Blumenthal

Host

20:49

Did you write her in Spanish or English?

Aaron Luo

Guest

20:51

in English, it was in English, it was in English and we started just jelly right away. You know, it's like our backgrounds are so similar. We both have the same interests, you know, in terms of wanting to start a fashion brand. I love her design, static, I mean and I'm not saying this just because she's my you know business partner in co-founder of the brand. I think she's one of the most talented handbag designers that I've known and I've seen my fair share of them. We're gonna know what I see her drawing and thinking through concepts with her team and merchandise and conversations and all that they. Honestly, it's magic to see things coming out of in there, you know, when she's at work.

Emily Blumenthal

Host

21:20

Was that weird for your wife? No, you know, I think I think a little strange. We like, hey, I found this girl. Yeah, I spent all my time with her. We're gonna start a business and don't worry, I'm gonna tell everybody we're not together. So yeah, I mean honestly, because that's just the assumption.

Aaron Luo

Guest

21:34

Yeah, you know, and we got a lot of that right. It's that every to your point, everybody assumes that we're together, we're married and all that. I think you know. Obviously, transparency, it's very critical in any relationship, right? So being up front with that, I think it's important. I think you know, again, my wife and I'm sure she will kill me saying this my wife, it's a very confident woman. Okay, he's just fine. She is very confident in our marriage, in our relationship and herself, of course.

21:56

And so you know I say this is somewhat of a fairytale because, carmen, I will be working on this brand and you know other ventures and so on, so forth, and other brands for the last 10 years together. We hardly ever fight and that's a question we get I get a lot of interviews from the press. Is that, you know, like, how is it like to have a co-founder? Right, and it's hard. It's hard, emily, and you've seen your fair share of startup brands Call funders, fight and they split up. Matter of fact, you know I'd read this somewhere not a long ago that I think over 50% of Brands, especially in retail fashion, that ends up, you know, dissolving or going away or being sold. Whatever it is, it's not because the brand could sustain, or it's because of differences between the co-founders, you know.

Emily Blumenthal

Host

22:29

It's a divorce like anything else.

22:30

Yes, hard you know, start out kind of in this bubble and then, when interest, attention and growth, ego scale, you know there's always because you both can't be doing the exact same thing Like one person has to be designated to one and then designated to another and, you know, differences of opinions come, and then you have to come up very quickly with a way that you can determine what is more important to one person versus what is more like is this a 10 for you or 2 for you? Because if it's a 2 for me and it's then for you, we'll just go with that. That's it the end.

Aaron Luo

Guest

22:56

Yep, 100%, very, very hard, and the fact that we work with each other for 10 years and build an amazing brand and building on the Second one as we speak, it's a miracle, honestly, and we reflect on our journey right from time to time. You know, we're so busy that we don't get a chance to really reflect too often, but a lot of it's based out of. But to your point earlier, right, the skill sets has to complement each other. Never, you know, conflict will contract with each other, right, and then you're gonna end up a situation where both of you want to make a call and and who's gonna make that call at the end? But they, right, and that's what the friction happens.

Emily Blumenthal

Host

23:20

How did you go from Carmen Chen Wu and being like, hey, girl, we're gonna call it after you because you're the talent to hey, I think it's time to pit it and let's call it something else.

Aaron Luo

Guest

23:27

Yeah, I think it was a combination of things. In the early days, I think you know Carmen, when we started Kara or we started working together, before even landed the name of Kara, you know there was Carmen Chen Wu, her namesake brand and CCW, or Carmen.

Emily Blumenthal

Host

23:39

Yeah, ccw came after right.

Aaron Luo

Guest

23:42

And I think at one point we both came to conclusion more Carmen than me, because I actually was totally okay with just continue calling, you know, carmen Chen Wu or CCW. I think it's a great name. It's a great name and even the short of it it's wonderful. I think you know she did not want to create a brand, a namesake brand. I think that's her vision. Right is that? You know, the brand should sustain itself without a designer and again, there's plenty of brands out there that you know. Even after the brand was sold right and the designers no longer involved, when you want more as a figure, they continue to be very successful.

24:08

That's, that's great, and I'm not saying that's. That cannot be the case. But for her, she won the brand that is not necessarily always tied to her persona to certain extent, even though she is the spirit of the movie on the brand and you know the nucleus of the brand for the last decade. She won the brand that basically can last forever, even though we both are not here, right? So, kara, I don't know if you know this, it's a combination of her name and my name together.

24:27

I did, of course I did of course I did, aaron, so you probably know this. But for those who don't know, one of the things that we really pride ourselves, you know, in Kara specifically, was that, beyond or besides being, you know, just a beautiful product, right in terms of design and the materials that we use, it's extremely functional.

Emily Blumenthal

Host

24:42

It's a very functional handbag, you know very different Aesthetic product and so forth from Carmen Shenmue was easy. Oh, that was very fashion driven, not that there's alright, but this was very. You know, the lane was very crowded where you were to Kara and, if I'm not mistaken, you yourself were also on a reality show for a minute Trying to get money like honey, funny, I know. Yeah, story, yeah, yeah, everything in the closet and they weren't very kind to you also, which really pissed me off. Yeah, like I know his vision and I know the people who were the on the other side like, well, do you get it? I'm like he gets it. Watch the space. Yeah, no, I mean being an early adopter into at leisure for a handbag. You're up against a lot. It's like being a pioneer is good, but it's also you want to be the first, the fastest and the best, but then the flip side of that is like you're the one paving the way, which is almost just as problematic.

Aaron Luo

Guest

25:22

It was hard. It was hard. We got slapped left and right in the early days, you know it's so, yeah, if we were in project runway or spin-off, I think of the project.

Emily Blumenthal

Host

25:28

Yeah, it's project entrepreneur or something like that something.

Aaron Luo

Guest

25:31

Yeah, yeah, you're right, I think it was probably kind of put a great memory, emily. Um, go there, it's all there, aaron, it's all there. How do you do it? So, yeah, it was fun, you know we, of course, I can go on forever. About funding, by the way. Okay, you know, in terms, I think funding it's a very slipping slope when it comes to fashion brands and you know we were involved in the number of, you know, accelerators, you know, and pre venture funding organizations in the early days and I got a very Inside look into venture funding. Of course, my finance background, you know, I was fortunate enough because I was with GE. I was fortunate to see so many different pictures and deals coming through my desk. Hey, I gotta tell you, like you know, I don't say I'm 100% disagreeing, but I think venture funding and fashion brands doesn't really work. That's not really working, you know, in the early days.

Emily Blumenthal

Host

26:10

No, it's you know I don't. It's the wrong industry. It's like doing it for food. It's the fashion is too quick, the trends move too fast, the customer is too fickle. You get stuck with inventory. That's a plus on the balance sheet, but it's truly a minus. You know, your fashion is you're driving the car off the lot and hoping for the best that it doesn't lose value as soon as it Leaves the store. Yeah, yeah, it's funny that you, going in with a finance background, assume that that's the road, but it's not, and I see that that's a learning curve on your part. You had no choice but to get it backwards.

Aaron Luo

Guest

26:35

And you're going to realize, we started the brand in 2013, 2014,. Right, and part of the reason why we wanted to start Kara specifically was that we saw great DTC brands that came before us. You got a digital native back then on the digital first, later on DTC I think the terms keep changing, but we saw some great brands coming before us Bonobos and Everlane and Dollar Street.

Emily Blumenthal

Host

26:53

Kuyana and all those.

Aaron Luo

Guest

26:55

Exactly. And, what's interesting, kuyana might be a slightly different story, kind of the same Ish, ish, but you know other voices, right? All those brands, like when we start looking into the founding story.

Emily Blumenthal

Host

27:04

We'll dump it at other voices now, so yeah, well, that's the thing.

Aaron Luo

Guest

27:07

That's exactly the point, right? Is that a lot of them. They were great marketers. There was so much to learn when it comes to branding and marketing, right, I mean, think about Bonobos. When Andy Dunn started the brand with Brian, the concept was different. It really was. It just means that right it's that you buy a product, it's directly coming to you. Not that DTC didn't exist before, of course, the concept was always there. But he really leveraged tech, right, and then cheap advertising through Instagram and Facebook to really get the story out, and it was a great business model. But one thing we realized was that, when it comes to the product, eh, you know, it's like it's not bad I'm not trashing any brands but it was like, eh, great, and we're just like OK, and, by the way, I wanted to love Bonobos and just picking Andy for a minute, right.

Emily Blumenthal

Host

27:41

Well, as a men's brand, like that was a space that no one hits us, so I guess that, and their marketing was genius Great marketing.

27:46

Yes, I mean, I've been professoring long before they started and when I start coming up it's like wow, look at this white space that they hit that they really can't get pushed back because no one's doing it much like you know, kara, in that regard. But you're so spot on that the product doesn't fit the narrative. It's like the narrative can only get you to a certain point because you need the product to make it all the way around the basis and you talked about LTV right.

Aaron Luo

Guest

28:05

So you know lifetime value of the customer. You know if your product gets eh but your marketing is really good, you will get probably a cheap acquisition to acquire the customer right your first time acquiring the customer. Might be cheap because of the store, you tell, but when you think about the lifetime and the repeatability of the customer, that comes from branding, that comes from product, product Exactly.

Emily Blumenthal

Host

28:21

That's your 80-20.

Aaron Luo

Guest

28:22

That's right. And it's interesting because their whole pitch back then was that, hey, I can lose a little bit of money with, you know, first time acquisition of the customer, because I'm betting on the fact they're going to come back later on. So my LTV ultimately it's very high, even though my acquisition cost is very high in the early days. Right. And again, if your product gets not superior, honestly that equation is going to fail and I saw that. I saw that and, by the way, you know not to say that I'm not the force I would see in the future, but the reality is that a lot of this brand ends up actually failing. Right, and I can say that because some of it ended up failing because that thesis is wrong. That thesis is totally wrong. You cannot lose, you know.

28:52

Even Casper, you know that they were saying that, ok, we don't have LTV, you know. So I'm OK with a little bit more, paying a little bit more in acquisition, first because my margins are so high. It ends up, you know, not working out. And then, of course, you know that's a different story for another day. But anyways, to answer your question in terms of how we thought about this, we said look, we have a super talented design team. Right Back then it was just one designer, but you know we have a team. But you know Carmen is a rock star. So what if we learn everything we know about DTC, the four mothers and four fathers that came before us right in terms of narrative, storytelling, branding and so on and so forth, but flipped the equation a little bit and really let the product actually shine and we were fortunate enough to actually, you know, kind of really identify a spot that nobody were really doing it right.

Emily Blumenthal

Host

29:28

How did you the pair of you being like at leisure let's do a bag for that. Because how did that happen? Because, ultimately, after doing a fashion brand that did OK, it didn't like it's not carrot level. But how were you like? I think this is our lane to go in?

Aaron Luo

Guest

29:40

Yeah, and that was an interesting kind of how we landed on the concept. So we actually didn't even want it to be associated early days with at leisure. You know it was a little bit of a fad back then. You know everybody was like you know, is this here to stay? Is this, you know? And then I got to interview early days like, well, what do you think about leisure? And I'm like I'm not, I'm not, yeah, I'm like I have no idea.

29:56

But one thing I can tell you is that healthy living it's here to stay, right. So when we started looking at data both Carmen and I are super data oriented we started realizing A that people's lifestyle starts to change, right, and people are working out a lot more, being a lot more health conscious and, you know, for being in a metro area like New York, people are constantly on the go right, and we see so many customers, or just consumers in general, with two or three bags on the street. I mean, you see, right, oh yeah, one for the gym, one for the office, one for going out.

Emily Blumenthal

Host

30:25

And we're like I love when people stay to date at night back, because you and I both know that that does not exist.

Aaron Luo

Guest

30:29

No, it doesn't. So we said what if we give her a bag? And back then you know one of our early partnerships that we had with Equinox, right, so we kind of leveraged them or used their customers almost like model customer to a certain extent, like if we were going to service an Equinox customer, right, what kind of bag would she need? What she's going to wear? Again, fast fashion sorry, fast company and a few other editorials called us the brand that invented the atheleteer handbag. I didn't coin that term but I take it. You know, own it, own it.

Emily Blumenthal

Host

30:53

Yeah, listen, people call me a fairy godmother and you could be called much worse. Yeah, oh yeah, that's right, that's how.

Aaron Luo

Guest

30:58

I see it. So you know, we're like you know what, let's just run with it. But that was the genesis of the brand is that we felt that look to your point earlier too there's so many great handbag brands out there, so many, right from luxury all the way down to contemporary and we just felt that if you value proposition to convince a customer to buy a product, it's because I can do it better or might as a prettier. That's a very hard proposition to convince other people. It takes a lot of dollars to see it on a celebrity. It just takes a long journey, my God forget it.

Emily Blumenthal

Host

31:22

And the interesting thing, this aspiration of influencer, creator, whatever you want to call it, gifting it to people. That comes at such a cost because the ROI for that nine times out of 10 is so low and people don't even realize that Like 100%, you know, back in the day you gift it to a stylist, hope that the celebrity wears it, then hope it shows up in a weekly or people's style watch RIP almost all of them in print. And now it's like you need the validation of your customer, being a brand with fans and really catering to their personal needs and identifying that through your site and building that community, because without that community you have no brands 100%.

Aaron Luo

Guest

31:51

You have to have that first party data in order for you to actually be an assistant brand. Without that, you are the mercy of others. To you are the will in terms of how you tell a story. So, yes, that was kind of the genesis behind the brand in the early days, where we said look, I think there is a space where we know that we want to be contemporary, we want to be aspirational, but we want to make our product a lot more functional, and for us functionality means first and foremost material science. So we invest a lot of R&D into developing and using different nylons. Nylon is probably one of the key fabrics that we use.

Emily Blumenthal

Host

32:18

Is the production done so through your family's factories? No anymore, they used to be, but still a lot of great connections that we have Was that hard to move away, internally being like, hey guys, we can't do this anymore because this does not fit our model.

Aaron Luo

Guest

32:31

No, it wasn't necessarily fitting our model, it was just because the price point honestly didn't.

Emily Blumenthal

Host

32:36

Because you were more expensive than what they were doing.

Aaron Luo

Guest

32:38

We just got bigger. We got bigger and the volume just got to a certain point that we can get a lot more economy of scale with larger factories. My family factory is still I wish they probably mid-size Again large factory. There's bad ones and there's gray ones. The really gray ones are the ones that respects and values design and quality but still gives you the economy of scale. So that's what we're looking for in the supply chain side, the production side of things.

32:57

But yeah, so back to what I was saying functionality from very early on and we're still very much leaning on those pillars is material science. You have to make sure that you use an exquisite product that's durable, that's light, that feels silky and buttery and with a touch. All that comes with R&D investments 100%. We also invest heavily in different ways that you can carry the product. When it comes to design, multi-strap system it's one of the key design features that we always rely on.

33:20

When it comes to pockets, a lot of people are like the more the merrier and we disagree when it comes to pockets. We feel like pockets needs to be designed thoughtfully and has to have a purpose 100%, sticking in few pockets just because everybody else is doing it, or because we feel like just give some compartment for the user. That's not right. And so we spend a lot of time researching, working with our ambassadors. We have a pretty decent-sized ambassador program at this point, not only to help us tell the story in terms of the brand and, of course, carry our products, but also their feedback is very about what we want to go through to decide To identify what's missing, to identify what we need.

Emily Blumenthal

Host

33:50

oh, this didn't work. I would like this. Can you do that?

Aaron Luo

Guest

33:53

Yep, and again, we don't always listen to our customers, right?

Emily Blumenthal

Host

33:55

Yeah, because that's to the extent Like I want it yellow. That's why yellow doesn't sell, or whatever. Something like that, Exactly yeah.

Aaron Luo

Guest

34:00

Exactly. I'd like to say always that in our downtown, the great designers, at the end of the day, are the ones who will tell you something that you need before you know you may need it Right. So asking your consumers to always help you design, it's a one-day-to-point.

Emily Blumenthal

Host

34:11

Whenever I see people doing this help design our bag and I'm like, oh honey, bunny, that's the wrong way to go. Or whenever I see a new brand saying it's bespoke, it's like, ah, you bought too many materials, you don't know how to do this, you don't know how to scale. It's like red flags to me that I think a lot of customers are a lot more savvy than what you think they are when you're trying to sell them something. Oh, 100%.

Aaron Luo

Guest

34:28

I mean just to quickly talk to that point. Customers are more savvy than ever, especially with Gen Z and much more than before and, of course, with all the return policies that most brands have. If you are BSE your customers through marketing, worst case scenario they will actually not even return the product and don't ever buy it from you again. Best case scenario is they come back, tell you why they didn't like the product and perhaps exchange for something. So point is that I think to your point, you can't fool a customer these days, not anymore in terms of, and I don't think you ever could in the past.

Emily Blumenthal

Host

34:55

But now, with the way that people can communicate, no way forget it. You can't go on bad review, that's there for life, like just go in anywhere 100%, karin. I would love to know where CARAA is going. Ricardo famous wrap all this into one big bow. What's to come? Where are we now?

Aaron Luo

Guest

35:09

Yeah, so Karin and I have been working with each other for a decade, but you know, CARAA, it's been around probably for eight years. You know seven or eight years, I think, for us. You know we're ready to scale. You know it's very funny because a lot of people want to scale early and that's you know. Back to my point about VCs before, because as soon as you start the mistake, as soon as you start taking external funding, you'll obligated to your investors.

35:26

You'll have visionary duty to your investors to actually grow for them and for yourself, but for them also because they're on the same boat as you and that's prone to make mistakes to your point. So we took a really cautious baby steps in our early journey. I think you know the brand is a point where our supply chain is robust. Our team, you know. We finally are the point where we feel like we have a right size team to help us scale. So I think you can expect us to grow significantly, I think in the next three to four years. I don't know if we ever going to expand beyond accessories. You know, I think we want to say we, carmen and myself, but Carmen believes in the value of being specialist in something right.

Emily Blumenthal

Host

35:56

The best at something.

Aaron Luo

Guest

35:57

Exactly so when people think about, oh, functional travel bag or functional baby bag or functional pet bag or sports bag, feel a bag. Exactly. Go to the back brand that specializes, versus go to a quote unquote lifestyle brand.

Emily Blumenthal

Host

36:10

Right yeah, which is like a lot of everything, but it's like, yeah, still a bag, so that's where you're good at.

Aaron Luo

Guest

36:14

So that's that you know. I think you know we started sticking to Brand Cobra, kind of famous. We're bringing Spanish charcuterie to the States Very different brand, honestly. They started, as you know, a passion project because our loft is spaying and because we just got frustrated. They'll be able to find good charcuterie in the States or in Spain. So you know, if you haven't seen the website, we have a great swag, you know. So part of kind of the, you know the we joke around and share the part of the in the tangible benefits that comes with Mercado Famous is that we actually can bring really great hoodies from some of the luxury factories that we know.

Emily Blumenthal

Host

36:38

So so there's your, there's your opportunity to lifestyle.

Aaron Luo

Guest

36:41

Maybe, maybe you know, use that as a platform.

Emily Blumenthal

Host

36:42

Listen, if I'm gonna get homeowner attorney, so I want to see it on a hoodie at the end. Yeah, that's it, I agree. Okay, I agree.

Aaron Luo

Guest

36:48

So we're gonna continue growing that brand. I think it's getting a lot of love. You know, I think we've paid a lot of attention to branding and design. The product comes from an organic farm with a hundred year old recipe that treats the pig the right way. We would never use the word kill. We always use the word sacrifice, because we're sacrificing the animal for the consumption of humans. So, very excited about the brand, you'll see us growing there and you know we're starting to help others. You know, help other brands to maneuver through maybe some challenges they have. You know I don't want to say that we are, you know, starting to give back because we're not there yet. But I think you know we mix more investments where we see those things happen and we see a fit. So we'll be doing sound of that as well along the way. But we primarily is blow out, CARAA. You know, in terms of, I feel like we're at the point where you know the tipping point where you've been growing, growing, growing.

37:27

I remember I was not alone going to a conference in Miami. You know I was in the room full of, you know, ladies, and you know, CARAA, it's a woman's brand. You know what service meant, and I was telling the story of CARAA, everybody's kind of listening to me and at the end of my spiel I guess that why haven't I heard about this brand before? Like you're just speaking my ear, you know. Like I did this and that's the trade off, right? That's a trade off, not over advertising or marketing your product, you know, because we didn't want to spend all the dollars, right.

Emily Blumenthal

Host

37:50

In that function. That is a trade off.

Aaron Luo

Guest

37:52

That's right, 100%, that's right. So you know now that we are at the point where we feel like financially we can tell the bigger story or to a wider audience. You're going to see a lot of us, hopefully.

Emily Blumenthal

Host

38:01

Man, I am here for it. Aaron, how do we follow you? Learn more.

Aaron Luo

Guest

38:04

Yeah, so you can find CARAA at CARAAco, so it's C-A-R-A-Aco. You can also follow us on Instagram. Instagram, you know. It's primarily the platform we use, together with TikTok. I think we are getting a better at TikTok, but when it comes to social media, I think Instagram is the best place to find us. You can find us at CARAA Sport that's their handle. And then, for those of you who are aficionados and lovers of meats, and Spanish meats specifically, you can find Mercado at MercadoFamous.com, and then same way on Instagram. The handle is MercadoFamous.

Emily Blumenthal

Host

38:28

Love it, love it, love it, love it, love it. I am here for the meats and here for the bags. Aaron, thank you so much for joining us with Handbag Designer 101. Man we are following eating wearing. Thank you so much.

Aaron Luo

Guest

38:37

Thank you for having me. It's been a fun conversation and, yeah, thanks again.

Emily Blumenthal

Host

38:42

Thanks for listening. Don't forget to rate and review, and follow us on every single platform at Handbag Designer. Thanks so much. See you next time.

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