San Francisco, California
Industry: Lifestyle & Consumer
Products: Belts, wallets, and leather accessories
A half-century after the company's founding, CEO Michael Saunders navigates a changing retail landscape with an enduring, hand-crafted "Made in the U.S.A." brand.
In the late '60s, Ronaldo Cianciarulo sold handmade leather belts out of the back of his van in the Haight-Ashbury district of San Francisco, creating The Leather Shop Inc. Two years later, in 1969, the company founder got a break by receiving an order from The Gap, and began a 47-year partnership with the apparel retailer that continues to this day.
From its inception, the company relied on traditional leather craftsmanship, combined with high-quality materials to succeeded in becoming the largest leather manufacturer in the United States.
By 1981, the company was renamed Circa Corporation, taken from the Latin word meaning around. In the coming years, Circa created numerous leather belts for retailers such as Banana Republic, J.Crew, Ralph Lauren, Target, and Old Navy. As it celebrates its 50th anniversary in 2017, the company is the largest leather manufacturer in the U.S.
Saunders is trying to navigate through a changing retail landscape, but the company brand remains strong and appealing. "Today's customers are more demanding and want more than just low prices," he says. "They want authenticity to the product in the same way people look at their food. They want to know where it comes from, where it's sourced and if it the company utilizes both ethical and sustainable practices. People want something that has value and lasts longer."
Being located in a state with some of the strictest environmental regulations in the nation, Circa is definitely committed to being environmentally conscious in numerous ways. "We are incredibly careful about how we think of chemicals and processes," says Saunders. "We use only water-based processes for our leather goods, and we love to partner with tanneries that have sustainable and safe practices, which are true for our partners in Italy, Mexico, and the U.S."
As Circa sources premium leather from Italy, it would be a shame to simply throw away any of this expensive, world-renowned, high-grade material. "We have excess materials that we often utilize to create products like travel wallets," says Saunders. "We also use excess leather to cut small items like key fobs."
In addition to utilizing its larger pieces of scrap in-house, the company also looks for various opportunities to upcycle smaller pieces of remnant leather by donating it to artists. According to Saunders, Circa's remnant materials can also be used as filler in AstroTurf.
With a rich history in San Francisco, Circa developed a unique following that has kept them successful despite many of the changes in the brick and mortar retail establishment. "Specialty chains have definitely been struggling," says Saunders. "Millennials and younger generations are more thoughtful about where they spend their money. As a result, they're not buying from traditional retail markets. But our partners are strong and are re-engaging the consumer online and telling the story of the products we're making. At the same time, we're also looking forward to working with different retailers in technology, online formats, and others."
Although the company has grown over the years, it has been able to maintain a balance between its artisan roots and the necessary automation to manufacturer its products in mass quantities. "It's always a balancing act," says Saunders. "The beauty that we have revolves around a tenured workforce, some with 18 years of experience in the company."
This wealth of experience is paired with innovative techniques, he adds. "Our employees appreciate the combination of technology and craftsmanship because we don't automate the artisan component. For example, we use laser cutters, but it still requires a human eye looking at the product. Yet all of our edge painting and matching, is still done by hand, and it takes skill to get that perfect combination right."
Saunders also finds that "Made in the U.S.A." continues to give the company a competitive edge over products made overseas. "People just want products made in the U.S.A.," he explains. "Customers come to us specifically for that reason. One of the other advantages is that we have greater speed to market. We can turn product around much quicker because our development process, and manufacturing is quick. This creates a strategic advantage for us."
With craftsmen and lasers working side by side, it would seem that the manufacturing environment at Circa would be somewhat divided, but that's not the case. Many of the company's employees are second and third generation from the same families.
"We believe in creating a great culture and Circa has a network of great workers," says Saunders. "Many are from the same generations of workers or whose family members will eventually come to work for us. When you compare that to Asia, there's not a lot of tenure in those companies. We don't have those worries here, and it allows us to invest in capital equipment."
Challenges: "Uncertainty around the overall retail environment is something we're keeping an eye on," says Saunders. "There's always changes within the retail landscape, but we're proactively addressing them. We feel fortunate, however, to be on the right side of consumer demands for domestic manufacturing. San Francisco is one of the most expensive cities in the U.S., but we have a 50-year experience in managing that. We feel we're well positioned to work through that and be competitive."
Opportunities: Fostering Circa as a retail brand. "We have been, for 40-plus years, behind the scenes making products for our retail partners," says Saunders. "I'm excited about telling our story and celebrating our 50-year heritage and developing Circa as a brand. We have a lot to talk about and want to showcase our capabilities."
Needs: Continuing education for employees. "Right now we're focused on enhancing our line by developing more complex products," says Saunders. "We need to re-school and train our employees on intricate handwork and design work. We're working on that now to expand."