Because of our financial times I find designers are wondering what to do with their dream of starting a clothing line or just maintaining one. On Wednesday night I attended a great event at Saks Fifth Avenue hosted by the Council of Fashion Designers of America, Gen Art and Master Card. The topic was “The Business of Fashion.” Before I provide you with the information from this event let me tell you a little bit about two of the event sponsors. This is very important for up and coming designers.
- GenArt is an organization dedicated to the showcasing of emerging talent in fashion, music film, and art. They provide grants and awards to fashion designers through an application process. Fashion Designers have four ways to show with Gen Art: Fresh Faces in Fashion, The New Garde, Shop Gen Art and Styles International Design Competition. This is a great way to get exposure and sponsored during Fashion Week.
- Council of Fashion Designers of America is a trade organization made up of fashion designers. Diane Von Furstenburg serves as president on the Board of Directors of this organization. Membership to this organization is by invitation only for American designers and designers whose business is primarily based in the U.S. This is a good site to obtain information about events such as the one I attended. Additionally, this is a great way to keep up with who’s who in emerging American designers.
Stephanie Rosenbloom, NY Times Retail Reporter, was the moderator for the evening. http://www.nytimes.com/2008/10/06/business/06econ.html?_r=1&oref=slogin
Are Investors Investing?
Melissa Krinzman, Managing Partner for Venture Architects LLC, discussed whether investors were still interested in investing capital. She stated that investors are still investing but of course with all that’s going on they have the upper hand in the situation. Investors are looking for their investments to decide early on what if anything in their business is being effected by the financial climate and to cure it quickly. So, that means taking stock of your business and figuring out what departments are essential, where can payments be deferred, if you have to increase expenses what is your rate of return, using zero based budgeting. Basically, spend every dollar as if it were your last.
How do you do without outside capital? You really can’t unless its all from friends and family which is possible. Robert Lee Morris, Jewelry Designer, was able to start his business years ago without outside investment. This may be a little harder today. But, he did make the point that with investments you should be careful about the partnerships you enter into. You may want to avoid a partnership where one side obtains an actual stake in your business. At all costs avoid selling your name.
Do you have a Clear Fashion Business Plan?
When pitching to investors the business plan should be clear and broken down into stages. In addition to discussing the product, your plan should focus on the business side: marketing, production, distribution, financials etc. Very important to have product samples as part of your presentation. Melissa made some valid points about pitching your Fashion Business Plan:
- Pitch to your least likely investor first
- Contact investors in waves; figure out a timetable
- Need introductions; cold calling does not work so use your contacts ask for introductions
- Never meet with associates; you need the “yes” people in the room
- If you do obtain investors or a yes from a buyer you should agree right then what the next step will be
- Never offer up a number, let them set the valuation
- Listen to what is being told to you from buyers or investors about your product; bring someone with you so that there are another pair of ears to hear what’s going on
If you are still having trouble with your business plan there are several companies that can assist you. Venture Architects LLC can help you in that area.
Are you In With the Buyers?
Designers get the attention of buyers when they have a clear vision of what their product is and can convey that to the buyer. It helps when your product is unique in that it is something that the market has not seen. Designers should know what they are, know what your brand is. As Robert Lee Morris stated “Have an Anchor.” The Buyer from Saks stated that they are always looking for new talent and work very closely with new designers. Many department stores work with young designers by hosting Trunk Shows where the line is showcased and customers can place direct orders with the designers. Some stores also may assist with production costs when dealing with new designers to help defray costs. But, Designers should always be clear about production and the deadlines they are facing.
Some designers expressed how hard it is to get follow-up calls from buyers or just hearing back from the buyers initially. Persistence is key of course! But, give the buyer a couple of weeks from the time you send your correspondence before contacting again. But, definitely follow-up with a call, a e-mail or both. Another way to get the attention of buyers is to contact the Fashion Office of these stores. Simply call the store directory ask for the Fashion Office or the Buyer for your particular apparel.
One of the highest achievements in having a clothing line is having it sold in the biggest department stores such as Saks, Bergdorf’s, Barneys etc. But, beware of the deal you enter into, in that the money may be good, but the numbers in terms of production may not be right or feasible for you.
That concludes my fashion business lesson for today! Be sure to check out Business of Fashion Website and the other links within the article for further information.