How Crazy Can We Succeed In The Fashion Industry?

The boundary is not only a fashionable style and a good show, but also a cruel aspect.

A fashion

The birth, from creation to growth, requires all kinds of difficulties.

Scott Studenberg and John Targon have established Baja East together. They have won many awards since then, including Lady GaGa and Justin Bieber.

But just three years ago, the company's headquarters were just an apartment in Chelsea, America.

They do not want to make apartments the starting point of their brand, but they have no other choice.

"How do we start? We try to reduce every cost."

"We hardly have any unnecessary daily expenses," Targon said.

Fernando Garcia, co-founder of another emerging fashion brand, Monse, said: "if you want to succeed in the fashion industry, you must be crazy enough."

In the early September, Laura Kim, another founder of Fernando Garcia and Monse, returned to her old home -- famous in the United States.

Brand Oscar De La Renta serves as design director.

So how crazy is it to be successful in the fashion industry? From the above two typical brands, the US website WWD analyzes the four challenges faced by many new fashion brands.

1) capital and interpersonal relationships

For the fashion industry, or all industries, capital is one of the most important conditions for the creation of a new brand.

All factors related to an enterprise, whether production, sales, trade marks, pportation or publicity, need a lot of financial support.

But for emerging companies, the key issue may not be how to get the money, but if the funds available at hand are available.

The product is one of the necessary investment targets. Before the start of mass production, the brand must invest a large amount of money on the sample.

Studenberg and Targon predict that in the year before the release of Baja East, they each produced $40 thousand in funding for the production and design of samples.

12 years ago, the new series of Nili Lotan Lotan released by Israeli American designer had only 5 different costumes, and each sample consumes about $25 thousand.

"I have to make many different samples so that I can polish out the most appropriate details, such as color and zippers."

"The cost of fashion design is very high," she said.

Now the cost of her new series of samples has been between $75 thousand and $100 thousand.

"This is just the price of fabric, sewing and model."

Lotan said.

"Products are the most important. If you don't have excellent products, your brand will be difficult to move."

Susan Sokol, who advising emerging designers, said.

She mentioned that emerging designer brands often face big problems in purchasing and logistics, such as how to find suitable fabrics and colors for their clothing for the current season.

This makes a reasonable business plan particularly important, and how to make such a plan varies according to the specific circumstances of each brand.

Garcia and Kim first found an accountant, according to their own family and their savings fund situation, formulated a plan to use these funds to support the brand, then pricing the commodities, choosing the positioning of the market, which is the main high-end market, but also the pro citizen line.

"These are the things we must consider before designing sketches."

Garica said.

Working experience in Oscar De La Renta has enabled Garica and Kim to establish contacts with many practitioners in the fashion industry and related fields, which has played a great role in their development.

When they finally finished the design, they contacted some fashion people who met before working at Oscar De La Renta to show them the prototype of their new series.

After that, they also played an important role in the production of factories.

Although there is no experience in production and design, Studenberg and Targon have been in the fashion industry for years.

"We are not just sales people, but also responsible for distribution and promotion."

"People are very important when building a new brand," Studenberg said.

(American singer Selena Gomez wears Monse's clothes on stage)

2) manage the supply chain and retailers.

Even after setting up their own stores and really starting to sell products, the brand can not be reassured, and there are still various problems to deal with.

Before the product is ready for sale, the designer must pay the manufacturer, including the purchase of various materials, labor and pportation costs, which is a great pressure on the emerging brand.

To reduce pressure, Studenberg and Targon asked to order their first series of clothing stores to pay 50% of the deposit.

This is a customary practice for retailers in Europe, South America and Russia, but many retailers in the us do not like it.

In addition, they have cooperated with Hilldun.

Hilldun is an agent management company, and also the lifeline of many new designer brands.

They will pay a portion of the capital to the designer in advance according to the total amount of the order, so that they can have a cushion and have more space to produce products.

Gary Wassner is the joint CEO of Hilldun. Their partners are not only startups but also many mainstream brands.

Wassner said: "the American Fashion Designers Association (CFDA) often recommends brands to us.

We will ensure that those emerging brands will not be overwhelmed by debt and warn them to stay away from reputable retailers.

Wassner believes that consignment is a very dangerous signal for a brand.

"Consignment isn't really selling, but it's tempting those new brands to get into stores that they can't afford, which is one of them.

Second, no matter how beautiful the store is, if you can't afford it, it makes no sense.

Many brands have suffered a lot on this. "

Wassner said.

Studenberg and Targon had worked with a well-known retailer with multiple stores, and sold 3 quarters of merchandise back to the market. But by July this year, the check for 5 million dollars was already 9 months late.

"They are not one of the Hilldun certified retailers."

"But as a growing brand, we must expand our distribution network," Studenberg said.

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For many brands, such capital delays will greatly affect their operations and even spread to the entire supply chain, causing them to not pay for other expenses such as production, models and pportation.

Besides retailers, suppliers may also have problems.

In the first quarter, due to the delay of fabric suppliers, an order from Studenberg and Targon can not be completed on schedule, two months late.

Nili Lotan has worked in the fashion industry for more than 20 years before creating its own brand.

But even with rich experience, she made many mistakes.

In the first quarter of her sales, the zipper and the production machine did not match, so the zippers made of 500 trousers were all damaged.

In order to make 500 new trousers on time, she suffered a lot.

"It's like a young man who has just entered the workplace but no one has given guidance. It's inevitable that mistakes are made."

She said.

3) trademark rights and various legal problems.

Another factor that causes many new brands to suffer is trademark rights.

"One of the things you need to do first is to register your trade name and make sure that you have the right to use it."

"In this way, you can ensure that you have legal rights in the future operation," Lotan said.

Though it sounds simple, it is not.

Registered trademarks are very expensive and, if handled inappropriately, will cause greater losses to the company.

The registration of a Limited Liability Company in Manhattan costs at least US $3000, while the registered trademark in the United States needs us $2000.

However, if there is no conflict between the right to use the trademark and the right to use it, then the amount needed to buy the trademark will be millions of dollars.

Besides trademarks, other aspects of company operation also involve various legal problems, such as confidentiality agreements, employee employment contracts or cooperation contracts with other brands.

That's why every company needs specialized cooperative lawyers.

For example, in December last year, Chanel was accused of selling counterfeit Chanel 5 iPhone cell phone shell to Shop Jeen, a new fashion brand in the United States. The storm finally ended with an out of court settlement.

"In the first half year of the company's establishment, I suggest that the founders should contact their lawyers for at least 50 or more times," said Douglas Hand, Hand Baldachin & Amburgey LLP, a legal consultancy.

After selecting the legal person of an enterprise, trademark registration and the signing of various contracts require the help of lawyers. "

4) sales and promotion

For most designers, it is their dream to get a big contract from a large international retailer like Net-a-porter.

But such contracts may make many people go up and down, or they may go bankrupt overnight.

"The sales of Net-a-porter are very large, covering the global market. We have distribution centers in Asia, Europe and the Americas. The same order may be small for us, but for many companies it may be an unbearable big contract."

Sarah Ruston, vice president of global sourcing at Net-a-porter, said: "so I always tell our team to consider the ability of the other side and not to give orders that can not be completed by the other side."

According to Wassner's experience, a brand can achieve sales of $2 million before its success.

Orders from mainstream retailers can help brands achieve this goal, but they must also be careful not to rely too much on a partner.

"This is a double-edged sword."

Wassner said, "if you like this store, they will also vigorously promote your products, but once there are one or two quarters of bad sales, you will lose more than half of your business."

In addition, no matter how excellent the brand is, the sales strategy has great influence on the actual sales.

Hiring a dedicated salesperson can greatly boost the sales of new fashion brands, but at the same time, it must also incur additional payroll expenses.

The more experienced, the stronger the salesperson, the higher the salary.

Therefore, most designers will choose the form of exhibition hall (showroom), which will occupy 10% to 12% of the total merchandise, not just the number of orders.

For example, the "fitting room" of Hongkong fashion brand Grana has adopted a similar offline sales way.

"If a new designer asks me for advice, I will tell him that if you have millions of dollars in support, you can open your own exhibition hall."

Lotan said.

Of course, not all brands are free to get millions of dollars of support. Most brands will publicly seek financing, but at the same time, they must seek support from their lawyers.

Lotan refused to sell the controlling stake of the company and insisted on serving as CEO and designer to ensure the free play space.

Besides, getting financing can relieve the pressure of brand, but the result is not always smooth sailing.