Billings was sure that she could do it, and in return for joining the team, she got a significant equity stake in the company. She soon realized just how challenging the task would be. "Most specialty retailers aren't focused on gifts," she says. "You can get a dozen roses here or a box of chocolates there, but the choices are pretty standard. For consumers who give a lot of gifts in a year -- and who give them to people who can afford to buy a lot of the necessities in life on their own -- the gift has to say something about you, the giver, as an individual."

One thing that Billings realized a gift ought to say is that the giver took the time to find something unique. But for a merchant, it's enormously complicated to provide such a service. You have to offer gifts for every occasion, from birthdays to bereavements, and from every category: games, gadgets, food, and flowers. This can create serious inventory problems, so Billings and her staff of nine buyers edit and update their choices mercilessly. They also seize on universal sentiments, such as good luck, that can apply to many gift-giving occasions. The "lucky bamboo" plant has been a big seller at $48, as has a real-life four-leaf clover. More than half of the products are unique to RedEnvelope, and Billings hopes to raise that to 70% within a year or two.

Another thing that a gift ought to do is make the givers themselves feel sophisticated. "We're not servicing trendsetters, the ones who find items six months before we do," says Kristine Dang, the vice president of merchandising, who reports to Billings. "We're looking for status seekers, people a step behind the trendsetters. They want to impress people, to look as if they have a higher income than they actually do."

Dang dreamed up the name RedEnvelope herself: It recalls the Asian tradition of enclosing gifts for special occasions inside a scarlet paper pouch. But it also serves as a nice contrast to the famous blue box. "Tiffany is the American model of a perfect gift business, and there's a lot of brand experience wrapped up in that blue box," Billings says. "But the reality is, it's a luxury experience. The average price point in Tiffany's catalog is more than $500. Ours is $70."

Already, RedEnvelope claims to be ringing up more sales than Tiffany's catalog operation. Company officials figure to sell more than $50 million worth of gifts this year, turn a profit in the fourth quarter, and break permanently into the black next year -- all without raising another cent in venture capital.

Now that Billings is running up on three years of working at RedEnvelope, it might seem like the time for her to get antsy and begin looking for another brand to build or fix. But with a potential RedEnvelope IPO looming in two years or so (yes, companies still do this), she'd be crazy to leave right now. Still, what might be her next lifestyle move? "Buying clothes can be impossible for petite women," Billings declares. "I'd love to create a lifestyle brand around clothing and accessories for women like me."

Ron Lieber (rlieber@fastcompany.com) is a Fast Company senior writer based in New York. Contact Hilary Billings by email (hilary@redenvelope.com).

Sidebar: What's Fast

So just what is a lifestyle brand? Hilary Billings has made a high-impact career out of asking and answering that question. According to her, a lifestyle brand has the following attributes.

It makes life easier. RedEnvelope, with its unique gifts for any occasion, is a classic lifestyle brand, since it takes away the need to shop for the gift, shop for the card, shop for the wrapping paper, and stop at the post office to send it. In a world in which lots of people have plenty of money, what they really crave is simplicity and convenience.

It makes your world more stylish. From the sneakers on our feet, to the computers on our laps, to the potato peelers in our kitchens, we expect the products we use to look good. Old-style chain hotels for business travelers had (and still have) polyester curtains, paisley bedspreads, and deserted echo chambers for lobbies. W hotels have velvet curtains, down comforters, and locals having drinks at the ground-floor bar.

It is an orchestrated strategy that is fully formed at a brand's launch. This is one area where first-mover advantage matters. Once a consumer brand gets big, it's difficult to transform it into a lifestyle brand. Target is a notable exception, but it took the company years to achieve lifestyle status. Saturn built its lifestyle brand from scratch, but most long-standing automobile brands have little hope of becoming anything more than a nameplate.