Paolo Fontanelli, CEO of Furla

LONDON, United Kingdom — This Great Recession has proven difficult for many fashion companies positioned ‘in the middle.’ Between the ultra-luxe brands like Hermès and Louis Vuitton (whose performance has continued to impress, despite the downturn) and the mass-market miracles like American Apparel and Uniqlo (who are also outperforming the market), are aspirational luxury brands like Coach, who recently reported that their profits have dropped 29.3 percent.

It seems the biggest problem with brands like these are that they don’t pass the value test at the cash register, leading Coach’s CEO, Lew Frankfort, to admit that “the new normal is hard to adjust to” and that he doesn’t believe that “conditions will ever return to what they were before the recession.” Is this the death knell for brands in the middle?

Not according to Paolo Fontanelli, CEO of Furla, the accessibly-priced Italian accessories brand that has recently gone on a retail binge in the UK, launched a menswear collection, and created a special initiative to leverage the talent of emerging shoe designers. I met with Paolo on his recent trip to London to find out why he remains so optimistic. The added bonus? Paolo brought along Michele Furlanetto, a company shareholder and member of the founding family, to make this a CEO Talk, times two. … Continue Reading

LONDON, United Kingdom — I just finished reading the interview with Jane Rapley, the Head of College at Central Saint Martins College of Art and Design in this month’s Luxury Briefing, and I couldn’t help but think that for a school that prides itself on being progressive, she sounded behind-the-times when it comes to the way the industry works and what her students need to thrive in it.

Take for instance her answer to the question: Is it difficult to teach ‘creatives’ to be business-focused? She says:

“Yes, it’s terribly difficult! And we don’t always try…Product design is very much about the market because the way it works is that you identify a gap, research it, answer a very specific problem and quantify it. It is a more analytical process than being a textile designer. However, we don’t necessarily expect a great engineer or scientist to be a great business person or a musician to know how to run an orchestra, so does a designer need to know about business?” … Continue Reading

NEW YORK, United States — Even in the best of times, it’s tough for fashion start-ups to access the capital they need to sustain their growth and expansion. But today, it’s downright brutal.

The usual private investment sources like angel investors and early-stage venture capital, which were limited to begin with, have dried up. What’s more, fashion boutiques can be notoriously slow at paying their invoices and sometimes, they don’t pay at all, making cash flow management tricky and unpredictable.

In a sinking economy, this kind of behaviour will only get worse, as fashion boutiques hoard cash and in some cases, go out of business. So while we have seen independent fashion businesses flourish in recent years, today they have an even higher risk of failure due to their small scale and limited access to capital.

This is where factoring companies like Hilldun Corporation can help. I caught up with CEO Jeffrey Kapelman to get his take on the economy and what independent designers can do to survive the downturn.

… Continue Reading