A sleepwear store in Venice captured the imagination of Renae James as she travelled across Europe more than a decade ago. She lingered there and made several purchases; boxer shorts, slippers and homewares and started to dream of creating her own label specialising in the same area.

She had completed a Bachelor of Design at the University of Technology but her focus had been on menswear. "Creating this label was a business decision more than about what I wanted to design," she says. "It was about what was needed out there, where it would fit in the market and I wanted to do something that would work for the long term."

James started the label in 2001 and committed herself to its full-time development in 2003. Her first collection was picked up by Peters of Kensington in Sydney and she wholesaled the range for two years before opening a store in the Sydney suburb of Paddington eight years ago.

"I could tell there was definitely a need because people accepted the label so easily," she says. "They might not wear florals or pinks and blues when they went outside but they will wear it to sleep."

That insight, she says, allowed her to be creative and to stress the feminine appearance of the designs. "Comfort was, and still is, our biggest consideration, and durability," she says.

James purchases prints from local designers as well as acquiring Liberty prints and creating her own, taking inspiration from 'everywhere'. The firm is also the Australian distributor for Ruby & Ed slippers, a brand picked up early in its history when both labels were just starting. "They were a start-up when we began selling them and shortly after, we became their Australian distributor," she says.

Waste fabric becomes knickers

Excess fabric is used to produce the label's knickers, the reason James offers for being able to keep their price point below $10. "We can't keep up with production because they're so popular," she says. "We do 15 to 20 prints every three to four months and the knickers are produced from the offcuts. We don't pass on the fabric cost for the knickers to consumers; that fabric consumption is allocated to the pajamas." Their unique styling and design has attracted interest from unexpected places; they have been stocked for two exhibitions at the National Art Gallery in Canberra and also for an exhibition at the Art Gallery of NSW in Sydney.

An export market built early in the label's journey was largely dismantled when James' son was born, despite having secured prestigious stockists like Anthropologie and Marshall Fields in the US. But James was aware her focus was shifting from Australia to the US and she wanted exactly the reverse. "I decided to refocus on Australia," she says. "I opened my second store in Leura and the online store took off, started babies and men's and the growth has been phenomenal," she says.

The business now includes two stores in the Sydney suburb of Paddington and at Leura in the Blue Mountains. Some 120 boutiques stock the collection around the country and the business operates with a staff of 10. James' husband Christopher has been working full-time in the business for the past five to six years.

Retail expansion

In the future, James plans to open more retail outlets, pointing to the satisfaction she gains from sales increasing at her current stores despite volatile times. "I'd also like to see our range for babies expand and for our website and retail outlets to become a one-stop shop for everything lifestyle including candles and linen, anything that reminds people of being at home relaxing, I want them to be an inviting place to go," she says. "I don't want the label to grow to become a mass market brand. I want to keep it manageable and boutique."

While James has heard stories that the Paddington area is not performing well and that retail generally is struggling, that hasn't been her experience. She attributes her success to the concept of destination shopping, with the store welcoming consumers who need nighties or pajamas for a specific reason, to wear in hospital or when they're having a baby or as a gift. "They come in with a purpose rather than walk in and just browse," she says. "Our market is the 25-to-40 age group and we have a big focus on young mums. We sell lots of maternity items or people buy gifts for friends or newborns."

A small men's range is being added to the collection for winter 2012 as well as fragrant candles. "The men's range is small but is being well received and includes slippers and sleepwear," she says. "I don't think men will necessarily sleep in them, it's more like housewear, like a comfortable pair of elastic waisted pants." For women, the pajamas, nighties and robes are complemented by loungewear made from a comfortable modal in designs that are suitable to wear on planes for travel.

Some 60 per cent of the Papinelle collection is produced in Australia while only 20 per cent of Petite Papinelle, the selection for babies up to age four, is made locally. "It's too difficult to get the price point at what people will pay for kids' stuff when it's made in Australia," she says. "We need a commercial price point so we have to make them offshore."

The men's range will be 50 per cent produced domestically and the rest offshore. "Making in Australia is really important because we can control the quality and design," she says. "We can make last minute changes and I love supporting our economy."

Biggest growth from online

Interestingly, James notes she sells more pajama pants than any other item because people can also wear them with a singlet they might already have in the cupboard. That product is followed in sales volume by nighties and then, pajama sets of woven pants and knit tops. "The pieces are feminine, flattering, comfortable, classy and I hope they're timeless," she says.

James describes the online response to the collection as phenomenal with sales on the website increasing 500 per cent since the launch of an updated site in March 2011. "I'm anticipating growth in all three areas; retail, wholesale and online," she says "The biggest growth in the next 12 months will be online followed by retail, if we open stores, which is where I see the company growing. A store in Melbourne is proposed to begin operating in 2012. "We have to manage growth carefully," she says "We opened Leura in September last year and I've been surprised at how well it's been received."

Determined not to take loans to grow the business, she tells how the firm's growth has been the result of what could be afforded from sales made. "Now we've been around awhile, we can see bigger volumes selling and be proactive rather than reactive."