Bolts From the Blue

When Jon Rosenberg and his wife, Lee, founded Rags and Riches 25 years ago to make a little money so he could pay for law school and she could quit her night job, so many things went right, they decided it was destiny.

by Virginia Lindauer Simmon

Jonathan Rosenberg (left) and his partner at Rags and Riches, Rick Massar, are dwarfed by only a fraction of the bolts of fabric the South Burlington shop carries.

Eat your heart out, Scarlett. Rags and Riches has more drapery fabric than you could ever hope to whisk into a lifetime of ball gowns. The fabric outlet carries more than 500,000 yards of stock in-house, making it one of the largest of its kind in New England – maybe the largest, says co-owner Jon Rosenberg.

"Outlet" is far from a perfect word for Rags and Riches. While it does reflect much of the shop's pricing structuredeep discounts on high-end fabricsit doesn't truly mirror the South Burlington business's operation. Over the 25-plus years since the idea to sell fabrics came to the company's founders, Rosenberg and his wife, Lee, growth has led the company down more than just one path, as they have followed their opportunities and added services not ordinarily found in outlet stores. And while the story of Rags and Riches is not a true "rags-to-riches" tale, it certainly contains some of the elements of one.

Rosenberg is unclear when it comes to exactly when things happened. He's not a fan of computer technology, and no careful tracking has been done, so details such as dates can get fuzzy. He loves telling the story of how he and Lee needed to find a way
for him to continue law school and for her to get out of nursing on the night shift.

A Long Island native, Rosenberg had met Lee in Vermont on a weekend skiing trip to Glen Ellen Ski Resort (now Sugarbush North). "It was '72 or '73," he says. A Swampscott, Mass., native, Lee was living in Vermont at the time. They clickedso much so, that Rosenberg decided to change his plans to attend law school in Boston and come north to Vermont Law School, which he did the following year. They found a place to live in Waitsfield.

As with many young couples trying to pursue an education and live on a shoestring, things weren't easy. After Rosenberg's first year of law school, during which Lee had worked as a registered nurse in a Berlin hospital, they took stock.

"I had enough money for one more year of law school," he says, "and Lee didn't like working the evening shift. We were in our early 20s, lots of energy, so we looked around Waitsfield to see what we could sell."

They realized that Waitsfield had no fabric shop, but that they had a connection with the fabric business that might help them open one. "My father sold fabrics, but at a different levelmore clothing and lower-end," says Rosenberg. "We said: Why not fabrics? Almost the next day, we were in New York."

"Things happened to us almost like destiny," says Rosenberg, remembering those early days and a continuing chain of right-place-at-the-right-time events. The Rosenbergs planned to sell fabrics out of their home to keep costs down. When they told a neighbor, who also happened to be a Realtor, about their idea, Rosenberg recalls with a grin, "He said, 'I have a better idea. You can get the old high school building for $50.'" So was born Rags and Riches.

Rosenberg, who had never before built anything, made all the fixtures for the shop. "I just hammered things together. Most of it fell down in two days," he admits, laughing. Lee painted, he says, "even the old slate boards. My wife had no seamstressing abilities, but she was going to be our seamstress. She looked at the instruction book and sewed. So we were quite a pair."

When the fabric they'd ordered on that first trip to New York came in, it was so ugly they could hardly believe it. "We had low-end corduroy and slinky stuff that would fall off the tables." He jokes that their best sales came at Halloween when people were buying goods to make costumes.

That experience made him vow never to buy fabric he hadn't seen first, and that promise holds to this day. Each day, Rosenberg would head off to school and Lee would sit in the shop. "If you made $20 a day, it was a success," he says.

They were savvy and eager to learn, so they kept at it. When they went to fabric shows, they hung out at the bars after the show.

"We were like sponges. All these seasoned veterans would look at us like their kids and tell us all these things, and we'd learn that way. We found some suppliers who were really good to us, who cut their minimums to get us started, gave us credit and pretty much got us going."

Their big break came, not from the industry veterans, but from one of Rosenberg's law school professors. "He said, 'You should talk to one of my law school buddies. He has a place called Fabrications. All these Scandinavian wall hangings, beautiful fabrics from France.'"

That was how the Rosenbergs met Rick Grossman.

Rosenberg did call Grossman and made plans for him and Lee to meet with Grossman and his wife, Ellen. "We really hit it off," Rosenberg exclaims. "He was willing to sell us small put-ups of things, and he told us how to sell it. He would sell small amounts to get us started; I'd hammer together a stretch frame for it; and all of a sudden, we had a different type of business. And that led to upper-end clothing fabrics, English wools, finer stuff," he says.

Business picked up, so much so that they moved to the $100-a-month space downstairs from their original shop.

They'd been in business a year, and a growing number of customers were coming from Burlington. In fact, someone in Burlington liked the idea of the little shop in Waitsfield enough to want to open one like it in Burlington. "That person got hold of Rick Grossman and asked to sell his fabrics in Burlington," says Rosenberg. "Rick Grossman called me and said, 'Jon, you've got to open in Burlington. If you don't get to Burlington, someone else will copy your goods.'"

The Rosenbergs realized they were at a crossroads. "I was still in school," he says. "Remember, the goal was not to do a store, but to get money for school and for my wife to get out of nursing."

Leigh Johnstone (left), who recently returned to Rags and Riches after a hiatus in California, and Lisa Talcott, who had a decorating business in New York and Houston before joining the team in May 2001, offer advice to customers seeking help with projects.

Not long before that, the Rosenbergs had met the wife of developer Peter Judge, who was creating a shopping center at 100 Dorset St. in South Burlington. "Peter Judge's wife liked our store and told her husband," Rosenberg says. Judge had a 700-square-foot space in the development, and the Rosenbergs decided to take the leap and open a new shop, eventually phasing out the Waitsfield one. It was 1976, a big year for the Rosenbergs: they got serious about being in business as a career, and they got serious about being with each otherthey got married.

Until this point, the Rosenbergs had closely followed Grossman's advice on just about everything. Now they started looking at other possibilities.

Through Rosenberg's father, they had met a man from Calico Corners, a large chain dealing with decorator fabrics for the home. He introduced them to other jobbers, who "took a shining to us, as their kids, and they'd give us 10 yards off a roll and backroll it for us."

Rosenberg is referring to the need to reverse the way fabric is rolled so the right side is out. Fabric comes from the factory with the right side in, but it's hard to display it properly for customers that way. Today, Rags and Riches has its own backrollers, but in those days, equipment was not in the budget.

Things went well in South Burlington, and the shop soon outgrew its space. The Rosenbergs doubled their square footage by moving a couple of doors away, into the space being vacated by the Company Store.

"We still kept Rick Grossman's stuff upper-end clothing fabrics and wall hangings and went more into decorator fabrics. We started doing really well," says Rosenberg. "I'd go to jobbers in New York, and they'd tell me where to find other things furniture manufacturers and other sources of goods. We were probably taking in $2,000 a week."

In 1979, they expanded, taking over 500 square feet that the Cork & Board restaurant had left, and three years after that, they moved yet again, still within the 100 Dorset St. complex, to the 3,000-square-foot former site of Decorative Things. They expanded again when Pennino's Gallery moved out, and added more space when Poppie's Gifts moved.

Rags and Riches was doing well. But the Rosenbergs realized that, while they had lots of directions they'd like to explore, they were tired. Lee managed the administrative end of things and Rosenberg did the buying. They both worked in the store

"Up to now, we had two to three employees but no services," he says. "We'd give customers the names of people who could do upholstery for them." Sometimes, they would report that the upholsterer didn't do a good job or sent them back for more fabric than we had told them they needed.

They knew adding upholstery services to the business was a good idea, but they also knew they'd need help to do it. "My wife was tired of doing paperwork, and I was working 50 to 60 hours a week. So I looked for a partner. I had always done the buying and I wanted somebody who would manage the workroom."

Through contacts in the business, Rosenberg met Rick Massar, who had 20 years' experience in the textile business on the manufacturing end. "I was an executive vice president in charge of sales and marketing," says Massar. "It was a hectic life no time for family: I lived on airplanes. So with a background in fabric, I was looking for an opportunity with something I understood and would make a life I wanted to live."

Massar joined Rags and Riches in 1991, and Lee left the business to spend more time on other things. Six months later, the lease came up for renewal, and the partners knew it was again time to reassess.

By then, Rags and Riches had 6,000 square feet and was outgrowing the Dorset Street property. Judge suggested they consider moving to Market Square, a new project he was developing nearby. They picked up their lease option period to give themselves time to think.

About the same time, a Realtor began approaching Rosenberg about buying a place on Williston Road. "The person who had owned the building was going bankrupt, and the House of Fabrics, which was in the building, was going bankrupt," Rosenberg says.

After some thought, Rosenberg decided to buy it himself and move the shop. "It was a lot money, but I did it." Rags and Riches moved into the new location in 1994. "We kept both stores going for a while. I didn't want people to think we left suddenly. So we converted the Dorset Street store to a total mill store, and everything was $5 a yard."

They began adding services. What had started as a guy named Mike Hayes (who's still there) sitting at the counter making pillows with a sewing machine grew into a full-service workroom with six people sewing and producing custom treatments. "We have our own upholsterers," Rosenberg says, "one full-time, a couple part-time and a couple free-lance. For window treatments, we have a woman who does draperies off premises; four to five decorators who get out on the road for us; a host of independent decorators who use us exclusively and six to seven others who work the sales floor.

"We have David Clapper, who was a cabinetmaker, and his wife, Linda, who is a great sewer. She taught him how to sew, and he makes and installs our shades to within an eighth of an inch.

(From left) Laura Socinski, Cindi Phillips and Barbara Hughes, long-time employees, stitch away in the spacious workroom at Rags and Riches.

"Altogether, our employees number somewhere in the 20s." That number includes Massar's wife, Gayle, who also works at the store as bookkeeper and on floor sales.

Employees are loyal. Linda Clapper has been with the shop almost 15 years; David Clapper nearly 10 years. Hayes, who taught costume design for Castleton College and sews for the Flynn Theatre, has worked for the store for 15 years. Leigh Johnstone, a sewer, left after 10 years, but returned when she moved back from California. Upholsterer Barbara Hughes has worked there about seven years.

Rosenberg has a big barn at his home that the business uses as a warehouse. Floor people are also cross-trained in the shop, so they can give advice to home sewers looking for tips.

Interior designer Nancy Heaslip of Charlotte has worked with Rags and Riches for almost 15 years. "They are my workroom," she says, "so it's very rare that I would not use them to make my drapes and so forth."

Heaslip is happy with the staff and the quality of their work. "I don't have to worry if the measurements are going to be correct. I did two tremendous jobs this summerDorset Field Club in Dorset and the new clubhouse in Waterbury for the Country Club of Vermont. Rags did the measurement, and I didn't have to worry about it.

"They provided the materials I needed, the service was on time, very dependable. It was a little hectic, but it went without a glitch." A plus, says Heaslip, is "their wonderful staff. They have bent over backwards for me. And their workroom produces just beautiful end products."

With two additions since moving into the new building, the square footage stands at 13,000.

In addition to the workroom, which generates about 20 percent of the sales, and fabrics, which amount to about 50 percent, Rags and Riches sells crystal pleat shades (approximately 20 percent of sales) at prices, according to Rosenberg, that match Home Depot's. The shop has recently added three lines of furniture, which accounts for the other 10 percent.

"Customers came to us and said, 'I want to buy your fabric, but if I take it to the furniture store, they charge me a surcharge.' So I found some furniture services, and we now have at least three lines," says Rosenberg.

Business comes from Montreal, New York, Boston, Arizona, California, even Bermuda, all by word of mouth, says Massar. "We want to continue to be a one-stop shopping resource as far as home decorating needs," Massar adds. "We do business the old-fashioned way, with no website, and two owners here all the time to keep things the way they should be."

In that way, little has changed since the Rosenbergs started out. Always the eye is on customers' needs. "We want to keep doing what we do best and let market needs determine our growth patterns," says Massar. "There's a real need, with two-income families looking for an alternative to ready-made, which isn't pretty, and we offer you enough services to get you in here." •

Originally published in January 2002 Business People-Vermont