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Petitioners’ Fashion Company
At Jasper Brothers, Mr. Rabinowitz saw Ms. Little’s design
talent and suggested they go into business together, so that Ms.
Little could design under her own name. Ms. Little was excited
by the opportunity to design her own line and generally
fascinated with fashion and the industry. She accepted Mr.
Rabinowitz’s plan, although she admittedly did not know much
about going into business at the time. The couple started
California Fashion Industries (CFI) in 1974.4
Petitioners positioned CFI in the higher end of the women’s
apparel market. CFI designed women’s apparel, arranged for its
manufacture, and distributed the apparel to higher end department
and specialty stores. CFI had a unique angle on the market by
targeting its apparel to the needs and preferences of the baby
boomer woman. This meant that Ms. Little’s designs gradually
evolved over the years so that the apparel would continue to be
relevant to the baby boomer woman as she aged from her
midtwenties to her thirties and forties and beyond. This
strategy of building a brand that customers knew and could trust
generated considerable loyalty among CFI’s customers in
succeeding years.
While Ms. Little was responsible for the creative end of the
business, creating both clothing designs and artwork, Mr.
Rabinowitz put his sales and merchandising talents to use selling
4During the relevant years, CFI was an S corporation and
petitioners owned a majority of its stock.
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Last modified: May 25, 2011