…Latitia Munroe chewed nervously on a hair extension, as her final year collection was announced. The models wafted onto the catwalk. This was it…. the moment she had worked for. Three years at St. Stitus School Of Art were now up for judgement. Bodies floated to the end of the catwalk releasing silk jackets effortlessly from slim shoulders. A coat slipped delicately to the floor and was dragged swiftly along… shame she hadn’t finished the over-locking on that one…
Scanning the audience for their reactions… Letitia wondered would they like it? Would she get A First? Would Lloyds stop whingeing on about her overdraft? Her head pounded. She hadn’t slept for three days, her accessories hadn’t arrived in time and her tutor had scoffed at her choice of show music. The pace changed. Latitia’s brow was wet with perspiration. The finale garments appeared but… “Oh my God!” she gasped, “she’s got it on upside down!” Too late…. Thoughts of the dole queue and artistic insignificance invaded her mind. A woman in the audience started to laugh… But the man next to her began to clap, a squeal came from the back of the hall and a thunder erupted in Latitia’s head. “It’s applause”, she thought… “They like it!” The Fashion Editor from Vogue stood up, opening and shutting her hands as she did so… she was clapping! The buyer from Joseph raced over… “I want thirty of each garment!” What a success! She’d made it. The hard work, the sleepless nights, the toil was now over. She thought of assistants, a spacious studio, awards, acclaim, fame, fortune and at a strategic point in her carefully planned career Designer Of The Year.
If only it was as simple as all that… For Latitia it was all downhill from now.
Setting Up
The show is over, and you have orders from shops to stock your garments. Remember that from this point onwards you are on your own; any mistakes you make will cost you money. Have you heard of the shop you’ve been asked to supply? Have they confirmed the order in writing? How do you know they will pay up at the end of the day? These are the first things you should consider according to David Jones, head of The Fashion Centre, a local authority that gives free advice to anyone thinking of setting up a fashion business:
“Any student with a bit of suss will walk into the shop, check out the designer labels and contact the designer to find out how the shop has treated them, and if they’ve been paid on time. From their comments you can make up your own mind whether to accept the shop’s offer.”
Organisations such as Dun & Bradstreet will check out a shop’s financial background if you can’t locate the designers. “A Client will make an appointment to discuss with us the types of enquiry he or she needs… There is no set fee for this type of detective work, the charges depend on the type of enquiry needed and the time spent on it. One enquiry could be costly, but several could balance out, making the investment very worthwhile.“
Money
Now that you’ve decided to enter the business with shop A, you must ask for written confirmation of your order. When you’ve received it, you’re ready to think about making up your order. Unlike college where you will make one or two garments at a time, you are now required to produce many, many more. You will need money at this point – to buy fabric, to pay for manufacturing and to pay wages for yourself and/or partners & assistants. Then there is food, rent and phone bills etc. This usually means borrowing. The bank is the obvious place to start, but any young designer who has ever asked a bank manager for cash against orders knows how fruitless this can be. To borrow money you need collateral, because orders are not enough and your bank manager will not be convinced that a customer will pay in full and on time.
Stereos, cars, videos, first edition prints and original Seditionaries shirts won’t be accepted either; what you need is a house or flat. Remortgage that, then you are in business… as they say.
On the other hand you might be lucky and your bank manager may be on the lookout for young entrepreneurs. He may have been told by head office to lend some money to one or two young people to generate client interest; but his is obviously real ‘Right time, right place’ stuff.
John Richmond left Kingston Polytechnic in 1982, and two years later set up with Maria Cornejo from Ravensbourne: “We approached our bank managers with a business plan, making sure we’d thought about all the possible angles. He matched us pound for pound.”
Sympathetic banks may do the same, giving you £1,000 for every £1,000 that you can raise yourself thereby showing yourself to be reliable, trustworthy and dedicated. There’s no better way to prove your commitment to the business than by investing in it yourself. Even so, this can be unsatisfactory as you can obviously only borrow in small amounts.
A great help to young designers are organisations like Amalgamated Talent run by Caroline Coates: “I realised the need for a company that would help people starting out with the problems of setting up a business. We offer a complete package, from finance and promotion to advice about accounting and technical problems like manufacture of garments.”Amalgamated Talent will advise on any aspect of the design business quickly: “My advice to anyone just leaving college with a few orders is to work out a business plan in as much detail as possible. Don’t expect to wave a few orders at the bank and leave with a loan.”
If the bank doesn’t lend you the dosh don’t be put off, because there are other avenues.
A backer is highly desirable, but just where can you get one? Accountants and banks may supply you with lists of clients who’ve expressed an interest in investment in the rag trade. This is at their discretion only. You may have tried a couple of banks, before you find a helpful bank manager. Tower Hamlet’s centre of small businesses’ have a list of merchant bankers as well. Try any clothing advisory councils, try your parent’s friends, try your designer’s friends… try anybody with money. Never be afraid to ask around, from your milkman’s mother to your next neighbour.
Often, finding a back can be down to luck… but never give up. John Galliano left Central Saint Martin’s in 1984, selling his first collection to Browns. With their payment and a £500 bank loan he financed his next orders from Bazaar… the payment from that enabled him to make his next order for Joseph. If he had been paid promptly he could have continued in the same vein for a while but his potential was spotted. “I was lucky,” says John. “I had a window display in Browns for a fortnight and I was contacted through Browns by my backer. It was the initial exposure that enticed him.”
Most fledgling designers search hard for a backer… Scott Crolla (who left Brighton in 1976) found one in a former employer: “Upon leaving college I worked for a company whom I later approached with a tight package outlining my plans for Crolla… and luckily they agreed to back me.”
Above all you should remember that a backer is usually entitled to 50% of the profits…
Nick Coleman who left St. Martin’s two years ago, says, “If you have a backer who puts up the money but doesn’t contribute to the business in any way, you’re going to feel unhappy when he demands his 50 % because you’ve done all the running around to earn it. So you should try and find someone who is interested in your world. Mine is in the fashion business and owns a factory.”Nick’s backers also have a commitment to produce the clothes well, on time and cheaply… as Nick says, “I can spend more time on design instead of fussing around at the factory… so at the end of the day when we split the profits I know my backer has earned his 50 %.” Another avenue is ‘Family Money.’
If you are lucky enough to have money lent to you by parents make sure you draw up terms and agreements; each party must have a contract as this prevents hot headed action such as them withdrawing their money and leaving you penniless every time you have an argument.
BodyMap benefited enormously from their parents’ help. David Holah and Stevie Stewart left Middlesex in 1982 and initially financed their first collection from the money they made running a market stall.
“A few seasons later our orders escalated,”says Stevie, “we needed a lot of money in order to produce the collection, so my mother came to the rescue. She remortgaged her home in order to guarantee the loan… if anything had gone wrong she would have lost her house!”
It is possible through, to make a start without financial help. Mark & Syrie started business in 1984, though neither of them had gone to college. Mark and Syrie got their material from second hand shops with their dole money: “We sold the garments from a rail in the street… and at the end of the week we’d collected £159 so we signed off the dole.”An ingenious start to the business, but Mark did say that they later had to borrow money to finance their shows.
Business Sense
A common mistake that many students make is assuming their talent for design will see them through. “It doesn’t matter how good you are as a designer”, The Fashion Centre’s David Jones insists. “If you haven’t got the stamina and personality to cope with the heavy demands imposed on you, you won’t make it. I lecture about these problems, but the students don’t want to become aware of them.”
Caroline Coates agrees: “I make time to see designers who just wander in off the street, to prevent them from making obvious blunders. I lecture at colleges to highlight the problems a designer can face; but none of it means anything until the student can put it into practice.”
Stephen Linard graduated in 1981. He had plenty of orders following his degree show but couldn’t get a loan from a bank; so when a shop agreed to back him he was over the moon, unfortunately signing some forms without reading them properly. “I just wanted to get on with making clothes.”
Stephen got a loan from the bank with the shop as guarantors, but then the shop pulled their money out, leaving Stephen personally liable for all the debts whilst the shop was still entitled to 50 % of the profits. They took clothes from his collection and sold them in their shop without putting any money back into the company. “This happened in 1983 and I’m still fighting it in court; the money now owed to the bank is £20,00 and whatever the outcome I have to pay half.” Stephen is able to continue designing on a freelance basis and is paid C.O.D. but he warns, “don’t sign anything unless you’ve had as solicitor and an accountant look it over.”
Sue Clowes graduated Camberwell textiles in 1979 and became well known almost overnight when she worked on some looks for Culture Club back in 1982… “I learned fast, but when I think of the money that went through my hands and the way in which I was ripped off because of my innocence… it makes me sick.”
Delivery
So, of course you’ve had a few problems along the way, but let’s just say that your fabric did arrive on time and you are ready to deliver your hard-grafted togs to that shop in South Molton Street. If you had a show in October you will be expected to deliver for February. You will have specified either of these terms within your contract: C.O.D. If you specify cash on delivery it is usual to give a discount of say 3½ %. Alternatively you will have specified a ‘within payment’ date: anything from one week to 60 days. Obviously shops prefer to be given more time before paying out, as this helps their cash flow. But remember, when you give a shop extra time to pay, you are seriously injuring your own cash flow, as you’ve already spent money on buying fabric and paying factory bills and need to recoup.
Sue Clowes says: “In the months it takes to complete an order you are out of pocket, so you need to collect money upon delivery to continue with your next orders.”If you are late delivering your garments, the shops are technically within rights to refuse the goods… and the less scrupulous shops can use this point to their advantage. Beware!
Stuart Malloy, Managing Director of Jones, stocks many young designers and agrees most of them do deliver late, but explains that as long as the shop is warned by phone then this is not a problem. “The difficulty arises when we aren’t told, and the collection arrives a month late. We’ve had deliveries so late that the garments have gone straight into the sale.”
Payment
Through C.O.D. is the most desirable way of being paid, sometimes this just isn’t possible… as Stuart Malloy says: “Often we have several people delivering in the space of one week all wanting C.O.D. This can cause severe cash flow problems for us, so we ask them to consider 7 days as a reasonable term of payment.”
If you are paid promptly, you can continue with your next order, buy fabric etc. But if you don’t collect your money and you have not allowed within your budget for the late payment, everything will grind to a halt.
Mark & Syrie agree. “We were owed £3,000 which would have gone toward the financing of an American order, but because of the late payment we lost it.”
Protect
In this or any other event, there are few ways in which you can protect yourself; Sue Clowes had a clause written into her contract (it cost £500 because it had to be specially worded) stating that clothes not paid for were still her property and could be reclaimed: “I trusted the shop to pay because I had already done business with them. They wouldn’t return my calls, then I heard a rumour they were going bust. I knew I’d never be paid so I went straight round to the shop to reclaim my clothes.” On the surface this might sound satisfactory, but as Sue says: “They are last season’s Spring/Summer stock so I can’t resell them.”
An obvious solution would be to sue a shop that has no intention of paying, but as Helen Littman from English Eccentrics explains’ it isn’t as simple as you might think: “When the day came for us to deliver a £30,000 order we were put off with excuses. A lot of time wasting went on until the management admitted to a problem and said they’d only take part the order.”When English Eccentrics tried to deliver again, the shop refused all the goods and went bankrupt… so suing them would have been useless. “If a shop is going bankrupt the last person to get paid is always the designer.”
Some designers have had to take drastic action to collect payment; John Richmond called round to collect an outstanding cheque from a shop in Leeds but the manager was out deliberately. “We sent a friend into the shop brandishing a can of spray paint. He had orders to collect the cheque or cover the clothes in paint. He got paid immediately.”
Some haven’t been so fortunate, and withholding payment or not accepting an order has caused them irreparable difficulty: a shop cancelled an order that Wingrove & Leach delivered – “The original buyers had left, and the management wouldn’t acknowledge the order,” says Robert Leach… “The order of £2,000 made life very difficult… we had plenty of press but were penniless. After 2 ½ years of being on the dole we called it a day. 18 months later we’re still paying money back to the bank.”
Abroad
Delivering clothes abroad can be even more of a headache. “When you deliver clothes in England you know that if they don’t pay you can knock them up in the middle of the night”, says Nick Coleman “You can make a pest of yourself!
There are ways in which you can secure payment: open a banker’s letter of credit (your bank deals with the shop’s bank direct). This stops all dishonesty as all the finances are settled before the clothes are sent. Shipping agents will pay you on collection of the clothes for transportation so they have the problems of chasing up money afterwards (though this is the more costly method).
Many designers have foreign agents. These people will chase up your order money for you, but these firms have been known to abscond with the profits! Finally you can buy insurance, however most firms will only insure the more certain orders – so what use are they? All these options are costly, so many designers have to send their clothes abroad and keep their fingers crossed.
Bernstock and Spiers are still waiting to be paid from an Italian company they did business with a while back: “We don’t have an agent out there”, says Thelma Spiers. “So we telephone them daily, but this can get very, very costly as you imagine.”
Scott Crolla is still fighting for £3,000 from an Australian company and he’s had enough. “It’s got to a stage where I don’t care about the money, but I’d quite happily break someone’s legs.”
Steve Mahoney is an English buyer for the American designer Patricia Field and sympathises with the young frock-hack’s plight: “American shops expect a very high standard of finish and often have very definite delivery dates… they will often refuse British goods because they are shoddily made or late. It’s not the designer’s fault, it’s just that British manufacturers are appalling and often let the designers down.”
Pam Hogg did a 3 year BA course and then an MA at the Royal College of Art. She agrees and says many a time she’s had second batches of dyed fabric come back a completely different shade and unmatched to the first batch. “I even missed a Christmas display window in Bloomingdales, New York, because my printer cocked up my fabric design so badly that I had to reorder.”
Scott Crolla feels the same way: “Designers in this country have to rely on so many different people… if someone gives you a deadline for a delivery you have to believe them, but they often let you down.”
Forewarned is forearmed
So any budding Calvin Kleins just starting out in the business world are obviously very vulnerable. “Most designers leave college without any insight at all into the fashion business,” says Steve Mahoney. “They start off by making a few things for themselves and by themselves. When an order is placed they jump to it without realising how much work is involved.” Some colleges do have business studies, but many young bloods felt they weren’t very compelling. Thelma Spiers says, “There was never anything interesting like what to do when a shop goes bankrupt on you.” Rachel Auburn agrees. “I learnt absolutely nothing at my college. I gleaned more in my first few weeks in the real world.” John Galliano rather sums it up: “Business studies were so boring I just couldn’t be bothered to go!”
Finally
If you are still at college, make sure you benefit from all the tutors and freelancer’s experiences and knowledge and if you’re not, explore anything free: your local business advisory centre (look in the Yellow Pages), your bank manager, established designers, anyone with time and knowledge to spare. In the end though, it’s all down to you. Stamina and initiative are your two best friends in the fashion business.
10 final tips from the designers
1. Don’t treat your business as an art form.
2. Don’t let anyone take advantage of your sensitivity.
3. Don’t make the mistake of thinking you can do it all alone.
4. Seek out solicitors, accountants, seamstresses etc.
5. Always allow a wage for yourself within your budget.
6. Don’t expect to make money just because your first collection is in the shops.
7. Get a P.R. for a trial period (some will do it for free if they feel you have potential.)
8. Get your own press: ring up anyone who can help you.
9. Explore anything free (i-D style).
10. Don’t give up.
Credits
Text Caryn Franklin
Photography Phil Ward