The Vest Pocket Consultant:

The place to go to make your small business grow

By Rosalind Resnick

As an entrepreneur and investor, I’ve always been a contrarian–the kind of person who veers left when everybody else is going right.

That’s why I’ve got to hand it to Jonah Staw, co-founder and CEO of LittleMissMatched, a fast-growing consumer startup that sells mismatched socks, pajamas, flip flops, furniture and other bits of brightly colored fun. The company’s motto: “Nothing matches, but anything goes.”

With joblessness nearing 9 percent and shoppers cutting back on everything but bargains and necessities, you’d think that a company that peddles colorful socks would be struggling to keep the lights on.

But you’d be wrong.

With the backing of Catterton Partners, the $2 billion private equity powerhouse behind top-selling consumer brands such as Build-a-Bear, Frederick Fekkai and PF Chang’s Chinese Bistro, LittleMissMatched is about to open its flagship retail store in New York’s Grand Central Terminal, a tourist and transportation hub that attracts more than 30 million people a year. Two more stores are set to open within the next few weeks. And that’s on top of the 85 stores-within-a-store that the company has rolled out in Macy’s department stores across the country. LittleMissMatched products are also available on the web and through 3,000 retail outlets nationwide, including FAO Schwartz, Bed, Bath & Beyond and J.C. Penney.

“The world is incredibly depressed right now, and we are providing people with a little piece of happiness,” Staw says about his company’s decision to move forward despite the recession. “And from a retail perspective, the world’s best real estate is available to us now.

So while large, debt-ridden retailers are going Chapter 11, LittleMissMatched–with the $17.3 million in capital commitments it raised in June 2008–is going shopping. “Every day, I get at least five calls from landlords offering me great deals,” Staw says. “We’re not interested in the cheapest locations. We’re concentrating on the places where we can get the best exposure.”

Staw, 33, an innovation expert and former marketing executive, can afford to be choosy. Launched in 2004 with money from friends, family and angel investors, LittleMissMatched rang up $32 million in retail sales last year, up from $25 million in 2007. Staw predicts “substantial growth” this year as well.

What’s the lesson for other entrepreneurs? First, raise money while you can. It may not be available later. “We made a decision last year to build the business and not worry about funding,” Staw says. Second, when a great location opens up, grab it–even if the landlord’s asking $250 a square foot. Once the economy rebounds, there won’t be too many vacancies in places like Grand Central.

Third, chart your own destiny. Partner with the big boys, but follow your own path.

“There’s not a day that goes by that I don’t wear mismatched socks,” says Staw, who’s getting married May 24 to a woman he believes is his perfect match. And, yes, “we share a sock drawer.”

This entry was posted on Wednesday, May 20th, 2009 at 10:19 am and is filed under Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.