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INNOVATION: Company Has Stylish Answer To ‘Paper or Plastic?’

BAGGU

CEO: Emily Sugihara.

Revenue: $3 million in 2010.

Net income: Declined to state.

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No. of local employees: Two.

Investors: Emily Sugihara, Joan Sugihara, Ellen Van Der Laan.

Headquarters: New York City, with an office in Del Mar.

Year founded: 2007.

What makes the company innovative: Manufactures and distributes a line of reusable fabric bags, which serve as an alternative to paper or plastic shopping bags.

Emily Sugihara is betting that her strong sense of fashion design will mesh with an evolving public sense of environmental stewardship, and the result will propel her 4-year-old business forward.

The 28-year-old Sugihara is chief executive officer and co-owner of Baggu, which manufactures and distributes a line of reusable nylon and cotton bags.

A single product, a midsize shopping bag, has by now proliferated into shopping bags of various sizes, as well as backpacks. Baggu offers its products in a variety of stylish colors and patterns, which periodically appear in the pages of Condé Nast magazines such as Lucky and TeenVogue. April editions of Elle and Good Housekeeping feature photo spreads that include Baggu products.

When not in use, the Baggu shopping tote folds into a 5-by-5 pouch. They are sold individually, or in three- or six-packs.

Baggu had sales of about $3 million in 2010. The company expects that to grow to the range of $3 million to $5 million this year, said Sugihara, a Del Mar transplant living in Brooklyn, N.Y. Baggu has more than 10 employees working in the New York borough — Sugihara declined to give an exact number — and two employees working in Del Mar, which Sugihara said remains the site of design work and business meetings. Baggu works with more than one Chinese factory to make its products. It keeps inventory and fills orders at a warehouse in Northern California.

Environmental Inspiration

Sugihara described growing up in an environment where sewing projects were common. She said at one point she and her mother, Del Mar resident Joan Sugihara, wanted to get reusable fabric shopping bags. Nothing on the market appealed to them, however, so they designed and produced their own. By late 2006, the younger Sugihara recalled, she and her mother were thinking seriously about going into business.

Mother and daughter opened their doors in January 2007. The Sugiharas teamed up with Emily’s childhood friend from Del Mar Ellen Van Der Laan to fund the company. Van Der Laan is Baggu’s creative director.

Emily Sugihara says the business has been profitable from its first day.

Others have tried to make a go in the shopping bag business. They include Doug Lober of Parker, Colo., a Denver suburb, who runs ReuseThisBag.com. Business is good, Lober said, though he reported sales have gone from $1.98 million in 2007 to $750,000 in 2010. These days, Lober reported, he competes with companies producing promotional goods, such as logo mugs and pens with slogans.

Surf, Sun, Trash

Lober, a one-time California resident who enjoys surfing, said he saw the need for reusable bags after sizing up the amount of trash on the beach. What’s more, he said, his intuition told him that San Francisco’s plastic bag ban of 2007 could spread to other communities.

The ban is indeed spreading. The City of Pasadena is considering a measure to ban plastic grocery bags and place a 10-cent surcharge on paper bags. If passed that would follow plastic bag bans in other California cities.

Even certain businesses are finding a need to ban plastic.

SeaWorld San Diego announced in April that it will no longer use plastic bags in its gift shops.

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