The Future of Fashion Finance
5 Things You Need to Know About the Future of Fashion Finance
Looking to start a fashion brand but not sure how to get the capital? Fashion’s top finance experts joined us at MAGIC to share their tips for raising funds in today’s retail climate, and their projections for the future of fashion finance.
THE TIME IS NOW. Edward King of King Trade Capital says, “With technology, it’s a wonderful time to be starting an apparel business because you can get to a huge market very quickly.” While it is a tough time for many in the retail market, you have to remember there’s hope—and a lot of successful new and established brands in the game.
THE DIRECT TO CONSUMER MARKET IS BURGEONING. With the ability to cut out online and brick-and-mortar middlemen, those in the direct-to-consumer market are experiencing higher margins, happier customers and some of the greatest growth in the industry. For example, Tamara Mellon, Co-founder of Jimmy Choo, is cutting costs and losses by taking her new shoe line direct-to-consumer with luxury crafted shoes starting at $296.
DIFFERENTIATION IS HOW YOU SET YOURSELF APART. As Richard Workman, Partner of GDLSK says, “You have to have a good idea. You have to have a product that people want to buy.” Often, the fastest growing brands find a niche that no one has taken. Take Travis Mathew for example. Founded in 2007, they reinvented the classic golf shirt, inserting themselves as a fashion brand in a market dominated by sports companies. And their strategy worked. Ten years later they sold for $125 million to Callaway.
YOU MAY BE ABLE TO FUND PRODUCTS THROUGH PURCHASE ORDER FINANCE. In addition to investor and private equity options, brands can find funding if they can provide orders up front. Edward King of King Trade Capital explains, “If you have an order from a credit-worthy end-customer, we can look at your ability to perform or have goods to deliver and we’ll help figure out a way to finance it.”
INVESTORS ARE LOOKING AT EVERYTHING. Aside from just sales performance, great investors are looking at the whole picture—the people working for you, the fashion, the market trends, and perhaps most importantly, the brand value. As Simon DuFour, Senior Manager of Moss Adams LLP, the largest accounting firm in the apparel industry, says, “At the end of the day, if you have a hot brand people are going to help you out.”