At Steve and Barry's, Fashion Isn't a Luxury

May 19, 2008— -- Sarah Jessica Parker was fearlessly fashion forward on HBO's "Sex and the City," and now the woman who introduced millions to the Manolo Blahnik has introduced her own fashion line. And everything in it, from pants to pumps, costs less than $10.

So who did Parker decide to pair up with to role out her line? Not Versace. Not Valentino. Instead, she went with some guys a little less exotic: Steve and Barry.

No one would mistake Steve Shore and Barry Prevor, two 44-year-old guys from Long Island, as fashionistas. But together they have built one of the fastest-growing fashion empires in the country by selling clothes dirt cheap.

Everything in every store costs less than $10 -- cheaper than the Gap, Old Navy, even Wal-Mart.

"There's a lot of things you could do if this is your mission and this is what you're deeply passionate about," Shore said.

They are passionate, if not a bit obsessive about keeping prices low. For one thing, Steve and Barry's doesn't advertise. Instead, they join with celebrities to create lines, create buzz and make cheap chic.

Tennis star Venus Williams wears the $10 shoes she designed every time she hits the court. And now surfer Laird Hamilton has launched a line.

"My family was on welfare when I was child, and we used to get two pairs of pants for school," Hamilton said. "It had a lot to do with your self-esteem and what you wore."

Hamilton said he was drawn by Steve and Barry's philosophy: Fashion is not a luxury.

"If a family comes to Steve and Barry's, and they buy the exact same clothing here instead of spending a lot of money somewhere else, they're saving a thousand dollars, two thousand, three thousand dollars a year," said Shore. "That's like getting a raise. That really affects people. It lets you fill your tank of gas. Maybe you can go out to eat or fix your house."

The bad economy has been good for business. It's not unusual to see lines of 10 or 20 people deep. Shoppers brag about how much they saved, not how much they spent.

"It is about something real," Prevor said. "This is about listening to customers and responding to their demands and they come in and they say, this is a great idea, why isn't anyone doing that?"

But how do you make money on a $9 pair of jeans?

"Cotton is 60 cents a pound," Prevor said. "There are 60 cents of cotton in these jeans, everything else is profit for someone else along the way."

The clothes are made around the world in more than 20 counties, including the United States, China and India, and the owners say they're mindful of how their workers are treated.

"We are very careful to make sure than the vendors we deal with are socially compliant," Prevor said. "We do audits, and it really has to be the mission of the vendor to be compliant."

Shore and Prevor have a billion-dollar empire riding on it, an empire that began with a childhood friendship. Prevor started selling T-shirts at flea markets in college for a dollar.

In the 1980s, they opened their first store, selling licensed collegiate gear at prices much lower than campus bookstores. By the 1990s, they expanded to a few more colleges, but two years ago, they changed everything with one shoe.

"Parents were feeling bad that their kids were coming up to them and saying, 'It's not an option, mom, it's not an option. You have to spend $100 for my shoes,'" Prevor said.

So they teamed with NBA star Stephan Marbury to create the Starbury.

While the store doesn't advertise in traditional ways, Steve and Barry's uses the backs of celebrities like billboards.

"We figured we need someone to play in the NBA every day, every night, and if someone could wear these sneakers in NBA games, then how could you argue about its durability and quality," Shore said.

Marbury and his team, the New York Knicks, may not be a very good sell right now, but that hasn't hurt the bottom line on Marbury's line, which Shore and Prevor said has sold "millions" of pairs of shoes.

Shore and Prevor now have more than 260 stores and are considered rock stars in the retail world. But you'd never know that by visiting their headquarters on Long Island.

Their offices don't exactly say CEO. They scream "cheap," complete with couches from Prevor's parents' basement.

"Waste" is a curse word to Steve and Barry. This could explain why every time the CEOs -- arguably worth millions -- go on the road, they fly coach and stay at a Motel Six.

True to that philosophy, the two CEO's share a fax machine. Their 50 employees share a single printer. And if they have a pizza party, employees pay for it.

The office is full of recent college graduates who often can't understand why their bosses have to be so cheap.

"There was a discussion in our office recently, and there were a number of employees saying, you know, you're crazy. Let's raise the price from $8.98 to $8.99, it's only a penny and we'll make more than a million dollars from this," said Shore. "And we thought long and hard and we said, you know what, it's a little worse for our customers. They'd rather pay $8.98 than $8.99. ... We were trying to figure out how to get to $8.96!"