The Echo Design Group, Inc. History

Company Perspectives:

At ECHO, we believe in four defining principles that set our products apart from the rest: design, quality, value, and integrity.

Key Dates:

1923:

The company is founded.

1950:

Dorothy and Paul Roberts come to work for the family company.

1978:

Dorothy Roberts heads the company following her husband's death.

1983:

The company begins selling in Europe.

1992:

The men's tie division is launched.

1996:

Paper products are added.

1999:

A retail store in Hong Kong opens.

2003:

Homeware products are expanded through the Creative Bath Products license.

Company History:

Long known as a print scarf maker, New York City-based The Echo Design Group, Inc., is an emerging lifestyle brand, involved in a range of fashion accessories as well as paper goods and homewares. Drawing inspiration from its extensive archives of patterns, some of which date to the 1800s, Echo continues to produce women's scarves under the Echo name and through licensing agreements with Ralph Lauren, Laura Ashley, Gloria Vanderbilt, and Adrienne Vittadini. Echo also makes private-label scarves for Ann Taylor, Ann Taylor Loft, Coach, Talbots, and several museums, including the Metropolitan Museum of Art, the Museum of Modern Art, the Smithsonian Institution, and Boston's Museum of Fine Arts. In addition, Echo offers women's wraps, gloves, hats, and raincoats, and men's ties. Home products manufactured under license include wallpaper, decorative fabrics and trim, bedding, bath coordinate ensembles, decorative pillows, and area rugs and throws. Echo also has taken steps to enter retailing. The company has operated a freestanding store in Hong Kong since 1999 and more recently opened an in-store location in Marshall Field's State Street store in Chicago. Sales offices are maintained in New York, Atlanta, Chicago, Dallas, Los Angeles, Toronto, Montreal, London, and Como, Italy. Echo is privately owned and operated by the family of its founders, Edgar C. and Theresa Hyman.

Launching the Company in the 1920s

After Edgar Hyman worked for two veiling companies that failed he decided to strike out on his own. According to family lore, on September 27, 1923, the day he married Theresa, he founded Echo Scarfs, Inc. He chose "Echo" because it was an acronym for Edgar C. Hyman & Co. The company set up shop in New York, eventually moving to 485 Fifth Avenue, where it would stay for 45 years. The couple's only child, Dorothy, joined the company in 1950 along with her husband, Paul Roberts. When her parents died, ownership passed to an aunt, and later to her husband. Along the way, Echo began building up its impressive archive of patterns that would form the backbone of its design unit. During the 1950s most of its manufacturing was moved offshore. In 1968 a museum commissioned the company to create a commemorative scarf, and out of this assignment emerged a customer design division. In 1973 the company began to do some private-label work. It would be the start of a strong period in the scarf industry. But it was a cyclical business and the good times came to an end in 1978, followed by an equally long period of poor sales.

Echo also was affected in 1978 by the death of Paul Roberts. Dorothy now took over the running of the company. In a 1998 interview with Daily News Record, she recalled, "Right after my husband died, I had one of our closest resources come to me and offer to teach me the scarf business. I had to count to 10. I grew up in this business and know it as good as anyone else." Her knowledge would be put to the test, as the scarf category endured a fallow period that lasted until 1983. She attempted to diversify the company, which now produced capes, ponchos, vests, bags, and fabric belts. But only the belts sold well, prompting Echo to beat a quick retreat. It discontinued all the new items, with the exception of belts, but even they proved a difficult sale. Although fabric belts fit in with Echo's expertise, to be a true player in the category a company needed to offer leather belts, which required a better understanding of the leather market and a different design approach. Nevertheless, belts moved the company beyond scarves, prompting a name change from Echo Scarfs to The Echo Design Group.

After surviving a tough patch, Echo resumed its growth in 1983, when it began selling in Europe. The company also looked to build up its business through licenses. One of the most important deals struck in company history was the licensing agreement reached with Ralph Lauren. The Echo and Ralph Lauren labels used different quality fabrics and designs, allowing the scarf lines to peacefully coexist. In 1986 the company reorganized its marketing approach by creating three product groups, each targeting a different customer with a separate marketing campaign. The Ralph Lauren collection was not affected much by the change. The company now offered the Echo collection, distributed through department and specialty stores and wholesale from $4 to $30. The Club 7 line, wholesaling from $4 to $25, focused on department and career-oriented stores. (The name was meant to connote traditional styles as embodied by the Seven Sisters schools.) Finally, Echo offered its Signature collection, sold to higher quality specialty shops and department stores, wholesaling from $15 to $110. Later in the 1980s Echo would create an even more expensive line of scarves under the Ralph Lauren Collection banner. With a wholesale price ranging from $120 to $300, these were the most expensive scarves ever offered by Echo. They were made in Italy using high-grade silk, wool, and cashmere. In 1987 Echo also added a lower price point to the mix through a licensing agreement with Sarah Coventry, Inc. The new collection, wholesaling from $2 to $4, was aimed at mass merchandisers such as Kmart and marketed solely by Sarah Coventry.

Adding Belts in the 1980s

Echo enjoyed strong growth in the second half of the 1980s, despite some disappointment with belts. In 1987 the company signed a licensing agreement with Albert Nipon Co. to produce belts, small leather goods, and other accessories under the Nipon label, but there was little demand for the line. When Nipon changed ownership later in the year, its new owner indicated that it was in the market to acquire an accessories company, presenting a potential conflict of interest with Echo. Because Echo had no interest in selling out, it took the opportunity to terminate the licensing agreement. In the late 1980s, nevertheless, belt sales began to pick up for Echo.

According to WWD, company sales totaled $8 million in 1984 and grew to the $50 million range by the end of the decade. The company was positioning itself for further growth by gearing up to apply its design, print, color, and fabrication skills to areas beyond scarves and, for that matter, accessories. To help facilitate this move, the company began investing in computer-aided design (CAD), installing a lone work station in 1989. Major proponents of applying high-technology to the old-line business of making scarves was a new generation of family leadership eager to take an increasing level of responsibility in running Echo.

Echo hired Werner Management Consultants to help realign management responsibilities and help the company to reach the next level in its growth, which had already prompted Echo to double its showroom and office space in Manhattan. Although Roberts remained CEO and chairman, she eventually turned over the presidency and more day-to-day operational responsibilities to Charles Williams, who was not related but had been with the company for 14 years. Her son, Steven, on the other hand, had worked at Echo for the past 11 years. He was promoted to a new post, executive vice-president of marketing. A daughter, Lynn, also worked for the company, serving as vice-president of advertising, and Steven's wife, Meg Roberts, was a designer. In many respects Williams and Steven Roberts were on equal levels, but with the reorganization there was a clearer demarcation of responsibilities, with Williams overseeing operations and accounting and Steven in charge of sales and marketing. In 1993, in fact, Roberts and Williams would become co-presidents of the firm, although blood would in the end win out and Roberts ultimately emerged as the firm's lone president.

The scarf business again revealed its cyclical nature in the 1990s when minimalism took hold in the fashion industry, resulting in a drop in the sales of jewelry and accessories. Echo had no choice but to become far more aggressive in its approach to business. It beefed up its private-label segment, winning work from major retailers such as Gap, Ann Taylor, and Talbots. Echo's next major effort to diversify its product offerings came in 1992 with the launch of a men's tie division. It was a natural fit, given that the company was already well known in the silk industry and over the years had purchased large amounts of silk. Also not to be overlooked was Echo's name recognition among women, who not only bought scarves for themselves but the majority of men's ties as well. Echo went after a high price point and it took some time before the unit established itself, but after a few years of adjusting the design and presentation, the company found its place in the market. In 1998, it added a more expensive, handmade neckwear line called Echo By Hand.

Licensing Agreements Fueling 1990s Growth

During the 1990s Echo achieved much of its growth through licensing agreements. In 1993 Echo transferred its expertise to the home textile industry through several licenses. It began producing bed and bath ensembles under a Revman Industries Inc. license, upholstery fabrics under Greef Fabrics Inc., and coordinated wallcovering prints under Imperial Fabrics and Décor. Echo signed a pair of licensing deals in 1994. For the Laura Ashley name it developed a line of scarves and jewelry. The company also licensed its own name to Manetti Farrow for a line of handbags, belts, and small leather goods. In 1996 Echo applied its design capabilities to paper products, including stationery, photography albums, paper plates and napkins, and giftwrap, available through C.R. Gibson. The company also grew through acquisition in 1997, when it acquired Schertz Umbrellas, a 50-year-old company that focused on men's umbrellas under the names Tundara, Travelaire, Jewels, and Weather Original. The business was renamed the Echo Umbrellas division and its line of women's umbrellas expanded. In 1998 Echo secured a licensing agreement with leather goods maker Coach to make scarves and other accessories. Also of note in the 1990s, Echo took its first steps into retail, opening a freestanding store in Hong Kong's Harbour City Mall, selling scarves, rainwear, umbrellas, and cold-weather items. The store had the potential to serve as a prototype for future Echo retailing operations in the United States. Coinciding with its 75th anniversary in 1998, the company also tried its hand at publishing. It released a coffee table-sized home design book, A Home for All Seasons, authored by Meg and Steven Roberts. The book proved so successful that it was followed up in 2001 by a second title, Time at Home. Retailers were especially pleased to see Echo grow its own brand name, which to customers embodied an enduring sense of style and fashion and could be more fully exploited to the benefit of both Echo and its retail partners.

With the start of the new century, Echo continued to build on its brand and broaden its product offerings. The company took an interest in gloves, an item it felt had been long neglected. It launched a line under its own name and one under Ralph Lauren. Echo added to its leather goods line in 2000 by acquiring Monsac Corp., which offered luxury handbags, accessories, and travel-related items. In 2001 Echo licensed its name to Kravet Fabrics Inc., a major decorative textile distributor, to produce a line of fabrics and trimmings. The next product area to which Echo felt it could effectively transfer its design capabilities was rugs. Echo's vice-president of marketing, Tracey Nelson, told Home Textiles Today, "We're known for our patterns and colors, so what better vehicle for pattern and color than area rugs. It's a natural extension and category for us." The company signed a licensing agreement with Trade Am, a home textile manufacturer, to create a line of area and accent rugs, as well as throws and decorative pillows. In 2003 Echo added to its home textile product offerings through a licensing agreement with Creative Bath Products, which would produce shower curtains, towels, bathroom accessories, and decorative pillows under the Echo Design Collection.

In 2003 Echo opened its first in-store shop in a Chicago Marshall Field's, a move that might lead to similar retail operations and perhaps, one day, freestanding stores. Although Echo had been in business for 80 years, it appeared to be on the verge of embarking on a new era, as it steadily evolved into a lifestyle brand. There remained plenty of room for growth in its existing product lines and licenses, but the company also looked to new categories, such as hats, socks and legwear, giftware, furniture, and table top. Whatever direction the company chose to take, it would remain privately owned and family-run for the foreseeable future. Over the years, the Roberts family had made it clear that it had no intention of selling despite an abundance of offers, and no interest in going public, a change that would likely interfere with the company's long-term approach to business. Steven Roberts called the buyout offers flattering, but explained to Daily News Record, "We don't live a grand lifestyle, but none of us need more cars or bigger houses."

Principal Operating Units: Design; Product Development; Sales and Marketing; Operations.

Principal Competitors: Burberry Limited; Emilio Pucci S.R.L.; Hollander Home Fashions Corporation.

Further Reading:

• Botton, Sari, "Echo Design: Sounding Out the Future," WWD, February 19, 1989, p. 4.
• Brill, Eileen B., "The Marketing Genius of Echo Design," WWD, October 25, 1985, p. L30.
• McKinney, Melonee, "Feedback from Its Women's Scarfs Helps Sell Echo's Ties," Daily News Record, June 5, 1998, p. 18.
• Parr, Karen, "Echo Celebrates 75 Years," WWD, May 4, 1998, p. 8.
• Paul, Cynthia A., "Echo of an Interesting Company," HFD--The Weekly Home Furnishings Newspaper, February 22, 1993, p. 33.

Source: International Directory of Company Histories, Vol.68. St. James Press, 2005.

Directory of Sample Business Plans Directory of Company Histories Contact Us Advertise