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Wednesday, April 24, 2002 - Page updated at 12:00 AM

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Paper or plastic? Some prefer beauty: Bag company finds niche in upscale retail

Seattle Times business reporter

If plastic grocery sacks are the Yugos of the tote world, bags made by Hana Print and Pack of Seattle are the BMWs.

One bag PCWeek magazine gave out at trade shows brags about just how good it is: "More news. More analysis. Better bags."

Hana Print and Pack produces and sells the bags — company President John Kim calls them "portable billboards" — to high-end retailers, mostly in the fashion industry. Among its customers are Carolina Herrera, Kenneth Cole and BCBG Max Azria clothing stores, the local Gene Juarez Salons and athletic outfitter Nike.

National Geographic placed a fourth order with Hana to make the bags it gives away at special events to promote its Adventure magazine. "We initially chose them because they were the cheapest. As it turns out, the bags are beautiful," said Lisa Toohey, a special-projects manager for the outdoor-recreation magazine.

As common giveaways at trade shows and packaging at retailers, bags are ads put on a practical product. Personalized bags, in paper, plastic or fabric, account for 6.9 percent of the $17.9 billion spent on promotional items in 2000, according to an industry association.

Hana has $4.2 million in sales a year although a glum retail market has caused some customers to pull back. "The first thing they do is cut down on packaging," Kim said.

Kim started the business 16 years ago while a University of Washington student, selling his first bags to Ultima, a shoe store on First Avenue that has since closed, and to the Parfumeri Nasreen in the Alexis Hotel. The first big account came in 1989 when Kim approached Nordstrom.

Kim said Nordstrom buyers heavily scrutinized his work. From their critiques, he learned the importance of detail and customer service, qualities he considers hallmarks of his business today.

An example is the bags Kim produced for Christian Dior cosmetic counters. He had to match the colors in photographs on the bags to the season's eye-shadow and nail-polish colors.

"Once you work with cosmetic companies, you're very color sensitive," Kim said. "We're in the bag business, but technically we're in the color business."

All Hana's bags are made in a factory in Jakarta, Indonesia, which the company jointly owns with a Korean management firm. With 2,200 employees, the factory can produce 150,000 to 170,000 bags per day. "It's like a Detroit assembly line," Kim said.

It's more like origami meets mass production. After the paper is printed and laminated, each bag is scored, folded and glued by hand. Eyelets are set in by hand and handles individually tied.

Michael McAfee, Hana's marketing vice president, assures customers the company follows "fair-labor policies" at its factory.

"There's not child labor and they're well-compensated," he said. Kim said bag folders make about $50 a month compared with the $20 a month they might get at an Indonesian company.

The Indonesian government places tighter regulations on foreign companies than on Indonesian businesses, both men said.

In the past year, Kim hired McAfee, who formerly owned his own international-business consulting company, and two more salespeople, to bring the number of employees in its sales office to seven.

"When I was doing Christian Dior, it was like being a lone soldier. It was no fun," Kim said.

The company is expanding its product line, to produce "stock" bags, designed with foil, patterns, holographic textures and greetings, that can be embossed to provide lower-priced bags for smaller companies or sold without personalization as gift bags.

Although his company is international, Kim says he's a true American success story.

He talks passionately about how his father put him on a plane from Seoul, South Korea, when he was 9 years old, sending him to live with his birth mother, who had separated from his father before he could remember.

When Kim started the company in 1986, he ran it from the basement of his mother's house. (The company still uses her old phone number as its listing.) "I feel very fortunate," he said, "but I always remember where I came from."

He now owns several businesses, including the office building where Hana's sales offices are located, a recreational-vehicle park north of Seattle and a chain of clothing stores called Reference. The 27 stores in Southern California, Las Vegas, New York and Dallas sell trendy clothes to "the MTV crowd," Kim said.

Every purchase leaves the Reference store in a bag made by Hana Print and Pack.

Amy Trask can be reached at 206-464-2032 or atrask@seattletimes.com.

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