From a western perspective, the rise of Derek Alexander is a particularly uplifting bags-to-riches story.

It started to get interesting at a time when the haughty haute-couture bigwigs of Central Canada had their noses so high in the air they didn’t notice telltale blips on the radar screen.

Eventually, the realization hit home: Derek Alexander, an upstart leather goods company from (shudder) Calgary, had been stealing their thunder – and their market share.

“At first, everybody thought we were a joke,” said Alex Whiteside, who’s both the boss and the Alexander of the corporate brand.

Larry MacDougal, Business Edge
Alex Whiteside of Derek Alexander isn’t interested in living on the cutting edge of fashion.

“Our Toronto- and Montreal-based competitors said: ‘OK, so these guys are doing a bit of business out west. Who cares?’ ” he recalled.

“By the time we started taking away their business, it was too late to do anything about it,” Whiteside cackled.

Today, Canadian manufacturers burn the midnight oil trying to emulate the clean lines and classic cut of Derek Alexander’s 500 styles: handbags, business cases, wallets, portfolios, organizers and travel items.

Pricey? Damn straight. But check the hand-stitched plaid interiors.

Run a fingertip across that top-grain leather, fashioned from the cowhide’s outermost layer.

Durability, superior touch and exquisite character, as the brochures say. Soft as a duckling’s downy underbelly.

Popular? Believe it. About 10,000 items leave Derek Alexander’s southwest Calgary warehouse each month, finding their way to 2,500 independent retail stores, including about 300 in the U.S.

Many wind up in The Bay, Derek Alexander’s largest customer. In Bay stores across Canada, the line routinely outsells leathers produced by Liz Claiborne, Kenneth Cole and Nine West.

Lucrative? Absolutely. Whiteside estimates the private company does between $6 million and $8 million in sales each year.

When they incorporated 15 years ago, Whiteside and Derek McKinnon, his late friend and partner, adopted certain precepts that defied conventional retail wisdom. Instead of trying to set trends, they opted to buck them.

“We are not on the cutting edge of fashion. On purpose,” explained Whiteside.

“We focus on trying to make a good bag,” he continued. “We try to keep our line current, but it’s our belief if a woman pays $250 for a handbag, it shouldn’t go out of style that week.”

When snooty couturiers in Milan and Paris present their spring lines, the implication is clear: THIS is what’s happening today. If you don’t buy in, you’re nowhere.

But McKinnon and Whiteside went to the retailers first, asked what their customers wanted, and produced it.

“What a revolutionary concept. Giving the people what they want,” Whiteside said.

An independent businessman since age 21, Whiteside’s the former owner of Waterbed Warehouse, which got “subtracted” from the market when it, ahem, dried up.

Then, at age 37, he hooked up with McKinnon, a creative designer with a background in the sale of leather goods.

The partners drew on their own retail experience to formulate strategy.

They decided to carry an abnormally large inventory on their Calgary warehouse shelves, thereby relieving their wholesale customers – generally cramped independent stores – of a major burden.

Second, they adjusted their bookkeeping procedures to accommodate the sometimes-sluggish cash flow of the retail outlets.

“People from a business school would look at us and say: ‘Your receivables are too slow, you give your customers too much room and you carry too much inventory,’” said Whiteside. “We realize these things. But we designed our business to support that retail distribution network.”

The strategy paid off. Sales volumes escalated dramatically through the late 1990s. Then McKinnon, the partnership’s creative heavyweight, fell ill and died.

“The perception in the retail community was that I had not only lost a friend but that we had lost our designability,” said Whiteside. “In fact, I’d been designing the bags with Derek from the beginning.”

Whiteside and his 20 Calgary-based employees rode out the crisis in confidence by holding to the original McKinnon-Whiteside game plan: quality control and customer service.

Derek Alexander leather is tanned in Europe, sewed and processed in Thailand. Every pocket of every bag is individually turned and stitched, with each product returning to Calgary for packaging, logo-stamping, tagging and shipping.

Consumer tips? Whiteside advises you to trust your instincts and your fingertips when shopping for fine leather. Look for superior texture, immaculate finish, that elusive touch and feel. And caveat emptor: “The words ‘Genuine Leather’ are on so much crap you wouldn’t believe it.”