How Justina McCaffrey came out of nowhere to become the hottest designer in the country
BONNY REICHERT
Report on [Small] Business

On a gorgeous evening in June, Canada's cultural elite sauntered down a red carpet in front of Toronto's newly completed Four Seasons Centre for the Performing Arts. The moneyed crowd of 2,000 were gathered for the Illuminata Ball, to celebrate the National Ballet of Canada's move into its new home. Tickets for the event-which included ballet performances, cocktails, dinner and dancing with members of the ballet company-cost up to $20,000 a table, and sold out quickly. There was no shortage of VIPs on hand-Shoppers Drug Mart tycoon Murray Koffler, federal Finance Minister Jim Flaherty, and event co-chairs Lynda Prince (wife of real-estate giant Jonas Prince) and mega-developer Joe Brennan. It was a black-tie affair, of course, with tuxedos and European designer frocks as much in evidence as opera glasses and pointe shoes. But when prima ballerina-turned-artistic director Karen Kain stepped onto the stage, she wasn't wearing Oscar de la Renta or Armani or Prada.

Instead, Kain kicked off the festivities in an $11,000 made-in-Canada (Gatineau, Quebec, of all places) French-lace gown, set ablaze with 3,000 pink Swarovski crystals. The designer of this stunning creation was none other than Winnipeg-born Justina McCaffrey.

Unless you regularly flip through glossy bridal magazines, you may never have heard of McCaffrey. But make no mistake: She's a rising star in Canada's $4.6-billion wedding industry. While she also designs special-occasion gowns like the one Kain wore to the ball, McCaffrey's artistic specialty, and where she chooses to focus her talent, is in the fanciful world of couture wedding dresses. In Ottawa, where McCaffrey lives, she has an especially devout following-she dressed Joe Clark's daughter, Catherine, for her wedding in 2002, and former U.S. ambassador Paul Cellucci's daughter, Anne, for her nuptials in 2003. At the moment, she's working on a gown for Sandra Buckler, Stephen Harper's press secretary.

Together with her husband, David, McCaffrey is the founder of Justina McCaffrey Haute Couture, a 48-employee company that's poised for takeoff in the $70-billion (U.S.) wedding market. JMHC makes roughly 6,000 gowns a year, and 75% of these are snapped up by U.S. retailers like Marshall Field's and Kleinfeld; the rest are sold through McCaffrey's signature boutiques in Ottawa
and Toronto.

Brides-to-be can expect to fork out about $4,000 to walk down the aisle in a McCaffrey creation, though prices can run as high as $25,000. That may seem expensive compared with the $900 average cost of a wedding gown in Canada, but Alison McGill, editor-in-chief of Wedding Bells magazine, insists that a McCaffrey wedding gown is worth the investment. "Justina is at the forefront of bridal design," says McGill. "She's out there making the trends, and her dresses are stunning."

Though 41-year-old McCaffrey seems to move easily among the rich and famous, in person she is surprisingly ingenuous and eager to please. These traits may be a holdover from her high school days as a self-described geek, always trying to fit in-a feeling that seems to cling to her still. But none of this has inhibited McCaffrey's ability to take charge, albeit in an understated way. She didn't hesitate to use her connections with the National Ballet-where she occasionally takes dance lessons-to make sure that Karen Kain went off to the ball in a JMHC "loaner." Prima ballerinas Heather Ogden and Sonia Rodriguez arrived wearing $4,000 McCaffreys, also on loan. Another 15 dancers wore samples from the slinkier side of her bridal collection.

Prima ballerinas, fancy-dress balls-it sounds like something out of a fairy tale. But McCaffrey's journey has not always seemed like a dream-come-true. Her company has stumbled on numerous occasions, including a costly and error-filled bid to outsource its manufacturing to Asia in 2003. And last year, internal dissension within the company led to a major shake-up. One senior executive was fired, and several others were stripped of their authority and subsequently resigned. "We gave some senior employees too much empowerment within the company, and they tried to take over," says David. "Now we've restructured and tightened up the controls."

While the McCaffreys have survived some tough times, the next five years will test their mettle in new, unprecedented ways. In the works is a $50-million deal with an undisclosed wedding retailer in the U.S. that would require expanding their manufacturing operations in Gatineau from 10,000 square feet to 50,000; the opening of 15 more signature stores across Canada; and the introduction of a new line of less expensive gowns, geared for the mass market. The deal would increase their production from 6,000 dresses a year to 100,000. "In five years, we're hoping to be clearing 10 times our current revenue," says David.

Fashion writers have likened McCaffrey to America's Vera Wang, another contemporary fashion prodigy: Both women have launched eponymous brands, and both have helped to fast-forward the bridal gown market from frumpy to leading-edge fashionable. (In the past, serious fashionistas were more inclined to dismiss bridal couture with words like "irrelevant," "tacky" and "hokey.") But there are also significant differences between the two designers. Wang, a former Vogue editor who was born into the Manhattan fashion scene, is a haute-couture superstar whose business grosses $300 million (U.S.) annually, compared with JMHC's $15 million last year. As the daughter of a Winnipeg bar owner, McCaffrey grew up in a world where fashion design didn't get a lot of air time at the dinner table. "I'd have boyfriends over and my father would always try to get them drunk," she says.

Nevertheless, McCaffrey had a flair for drama and enjoyed being a celebrity. "I acted on a bunch of local TV shows when I was a kid," she says. She also loved to sew-"I was always stitching or knitting scraps of whatever I could find."

After graduating from a private all-girls Catholic school in 1983, McCaffrey was ready to try her hand on a bigger stage-"It had to be New York, L.A. or Toronto," she says. She chose Hollywood, enrolling in the merchandising program at L.A.'s Fashion Institute of Design and Merchandising, but after field trips to Valentino's workroom and Ralph Lauren's design office, she was inspired to switch to manufacturing. When she completed her studies in 1986, she moved to Toronto, eager to make her mark in the Canadian fashion industry.

Within 24 hours, McCaffrey landed a $275-a-week job with Toronto designer Pat McDonagh, who specializes in tailored women's fashions. "I was a receptionist, and I cleaned the showroom every day," says McCaffrey. "It was a bit like The Devil Wears Prada-McDonagh would refer to people, and I'd have to figure out who they were and call them without asking questions."

McCaffrey's initiation into the design world set off a string of misfortunes. To make money, she took a job in the computer industry, but got fired. Then she started hanging out with a group of friends who threw out her expensive design magazines and convinced her that commerce was evil. And, for a short time, she fell under the spell of a hard-drinking, abusive boyfriend. Three years after her arrival in Toronto, McCaffrey was not just broke; she had lost her way.

Salvation arrived in 1988. McCaffrey had always been a devout Catholic, and with her life in shambles, she checked into a religious retreat in Combermere, Ontario. There, she met fellow Winnipegger David McCaffrey, whom she married the following year. The first wedding gown McCaffrey made was her own-a magnificent concoction of shantung (a textured silk) and chicken wire that so impressed the guests at the ceremony that word of this amazing new designer soon spread.

At the time, David was working three jobs in the not-for-profit sector, including one as the founding director of Habitat for Humanity in the National Capital Region. The positions provided him with valuable business connections, but relatively little money. "I look at my whole Ottawa life with David and our struggle with poverty as a time when I needed to slow down and really learn my craft," McCaffrey says.

When David left Habitat in 1996 to work full-time with his wife, his first order of business was to pack her samples into his beat-up Oldsmobile and drive across the U.S., knocking on bridal-salon doors and gathering market intelligence. What he learned on that road trip became the backbone of the McCaffreys' 125-page business plan, encompassing both a retail presence in Canada and a wholesale channel that supplied gowns to high-end shops in the U.S. David's next job was to secure financing-nine friends pitched in a total of $100,000 in exchange for 25% of the company, and the Bank of Montreal came through with a $100,000 loan.

In October of that year, the McCaffreys opened their 1,600-square-foot flagship store across from the U.S. embassy in Ottawa. "The only thing that made sense was to do our own retailing in Canada," says David. "The kind of high-end couture bridal salon we wanted didn't exist until we presented it." By 1999, the McCaffreys were selling their gowns in 35 U.S. stores, including Manhattan's Kleinfeld, the largest bridal store in the world. They had made their first million, but they still weren't in the clear.

The year 2003 is one the McCaffreys would rather forget, although they did learn some important lessons about doing business in the global economy. In a bid to boost their wholesale business, they invested $500,000 over the next two years into designing a line of lingerie for Chicago-based Marshall Field's, which wanted additional McCaffrey products to sell alongside her wedding gowns. The bottom fell out of the deal a year later, however, when the May Co., which had acquired Field's, discontinued the lingerie. "I was stuck with around $100,000 of finished goods and another $75,000 of raw material," says David. The lesson? "I'm now very cautious before I jump into new and exciting scenarios. Unless you have another chunk of money for that new product, don't take that road."

Building a brand isn't just about vision, of course; it's also about execution. The advertising, the fashion shows and the fancy boutiques get the brides in the door, but it's the perfectly made dress, arriving on time and without hassle, that makes clients happy. Some of those clients are the brides who, like Jenna, step into a McCaffrey boutique and receive star treatment. But the 35 retailers across the U.S. are also the McCaffreys' clients, and what they want are quality gowns and timely delivery.

"Many of McCaffrey's styles have been bestsellers, and one specifically has been No. 1 in our company for several seasons," says Mara Urshel, a co-owner of Kleinfeld, which also sells Valentino and Atelier Aimee gowns. "That's quite an accomplishment, since we have over a thousand samples."

David points out that this kind of reputation is not easy to build. "We've really had to prove ourselves with what we offer in product and service and delivery," he says. People in this industry are notorious for offering one retailer an exclusive line, and the next day going to the store across the street. But we've been able to establish a trust level. It takes longer to achieve your sales, but it adheres."

While David talks business, McCaffrey stares into space, perhaps contemplating more immediate concerns, like the fall collection. It seems unlikely that she gives much thought to how far she has come, and to the talent and creativity that made it all possible. There is a lingering sense that she is a little taken aback by her own success, that she's a little uncertain how this could have happened to her. McCaffrey knows better than anybody that New York is a long haul from the windy streets of Winnipeg.