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The Biggest Challenges Facing New Brands and How to Tackle Them

From financing to navigating a shifting retail market, a host of obstacles are standing between emerging designers and sustainable growth.
Peter Do's Fall 2020 collection | Source: Courtesy
By
  • Zoe Suen
BoF PROFESSIONAL

NEW YORK, United States — When Rachel Comey started her namesake ready-to-wear brand in 2001, fashion design wasn't a popular career path. "The scene felt much smaller. There were fewer fashion week shows, fewer brands, no such thing as direct-to-consumer and no social media," the New York-based designer said.

Nineteen years on, launching and running a brand has become a different ballgame. The emergence of digital platforms and support from industry prizes, incubation programmes and major retailers have made room for young creatives like Craig Green and Jonathan Anderson to grow their businesses on a global scale. But a smoother entry into the market for fledgling brands also makes standing out much trickier, and even the most gifted designers aren't guaranteed a successful business.  In a climate incessantly hungry for the "next big thing," pressures placed on newcomers can be invigorating at best, paralysing at worst.

"There might be a lot of opportunities for brands starting out right now," Comey added. "People crave newness, but the memory span is very short."

Below, BoF steps through the stumbling blocks most likely to derail fashion graduates and aspiring creative directors from launching a successful fashion business.

Focus on Building a Business Plan

"Nine out of ten designers I meet have no business strategy at all," said Olya Kuryshchuk, founder and editor-in-chief of 1 Granary, a platform and community for fashion graduates. "They approach their work in a very artistic way, hoping that things [will somehow] work out."

While there is no "one size fits all" way to devise a strategy, learning about cash flow, legal groundwork, VAT, shipping rules and invoicing early on can only be beneficial.

Creative Director Peter Do lacked business experience prior to launching his namesake label in 2018. He cultivated a business acumen by tapping friends for advice, listening to podcasts, and searching Google for answers. “You spend a lot more time doing admin than draping and designing,” he said. “Fashion is a business, and you have to manage it tightly,” added Do’s Sales Director Vincent Ho.

People crave newness, but the memory span is very short.

It’s important for aspiring brand owners to take a step back. Would they benefit from learning the ropes at a bigger brand first? Should they work two jobs instead of quitting their day jobs outright? Brigitte Chartrand, the senior director of womenswear buying at Ssense, recommends business administration and HR management courses, which can ready designers to lead teams and negotiate with suppliers and clients.

Kuryshchuk suggests teaming up with a partner who will be just as committed to the company; Michelle Duncan, founder of one-year-old ready-to-wear label Duncan, recommends designers seek out mentors in the industry.

Ultimately, there’s comfort in the fact that a degree of naivety can work in a designer’s favour. “When you know too much, you become scared of the potential downfall,” Do said. “If you don’t know enough, you just go out and do it.”

Spend on Things You (Really) Need

It isn't unusual for a brand to lose money for a few seasons before turning a profit. As investors increasingly turn their attention away from independent labels to direct-to-consumer start-ups, designers lacking family backing can find it hard to launch, let alone stay afloat.

For a lucky few, a multitude of retailers, incubators and illustrious prizes — from Ssense to Shanghai’s Labelhood and the LVMH Prize — can give an emerging designer the necessary platform, funds and recognition. But receiving a large cash injection at the outset can often damage a brand, said Kuryshchuk. “Learn to be frugal and be able to inspire and attract people around you to help and work with you because they really believe in your work, and not just because they got paid,” she said.

8on8 showcases a collection at Labelhood in Shanghai | Source: Courtesy

Whether self-funded or investor-backed, the key is to make the most out of the money. For Do — who crowdsourced funds initially from family and friends — this meant opting out of $75,000 fashion shows and not hiring external PR representation.

“Try and do everything yourself first before you spend a lot of money on stuff you might not need,” he told BoF. “Before you make a budget or business plan and allocate your funds, make sure you need it.” Do invested in his team of 12 full-time employees (and notably, no unpaid interns), which according to Ho has kept the brand voice and vision focused.

Budgeting is different for every brand, and new brand owners should find what works for them. Duncan, for example, finds it more efficient to work with four to five partners, with whom she can consult for PR and production. She plans to bring them in-house as the brand grows. “Building a huge team right away is not always the most efficient use of your funds.”

Prioritise Production 

Perfecting a brand’s sales and production operations are also crucial: “Making mistakes in these areas can lead to your company’s closure within the first three seasons,” said Kuryshchuk. “Look at it as building your core muscles before stepping on the ring to fight.”

When it comes to where you make your clothes, it often helps to start small — and local. For designer Rachel Comey, keeping her cut-and-sew operations in Manhattan allowed her to produce smaller quantities and run a made-to-order business: after showing each collection, the brand goes to market, sells and tallies each unit and produces according to those orders.

Look at it as building your core muscles before stepping on the ring to fight.

“It’s incredible to be in touch with the cutters and sewers and speak to them directly about every seam and every garment,” she said. “You can’t do that easily over long distances.”

Designers need to consider production processes before actual orders start to come in — not only to meet deadlines later on, but because buyers will expect to know how pieces presented in the showroom will be made. Following stints at Phoebe Philo's Celine and Derek Lam, Do decided to test factories and have conversations with fabric mills a year before launching his brand. "We just focused on the clothes and where they were made. We had to book out a system before that."

Make Retail a Learning Experience

Online, offline, direct-to-consumer and wholesale options: The current retail climate can be disorientating for any newcomer.

For designers like Duncan, who signed a two-season deal with MatchesFashion ending Spring/Summer 2020, inking an exclusive partnership with a prominent retailer can protect brand equity while buying time to map out next steps. "It gives you an opportunity to test your production, make sure you deliver on time and don't deal with multiple stores, currencies, shipping rules," said Kuryshchuk, who advises against signing for more than two seasons to avoid relying on a single partner.

There's always room for negotiation. Do arranged a two-season digital partnership with Net-a-Porter, which allowed him to sell via his own e-commerce site and brick-and-mortar stores. It gave him access to vital brand feedback and resources (coined a "shipping and logistics bootcamp,") as well as the autonomy to fulfil orders from a host of stockists like Nordstrom and Bergdorf Goodman.

Rachel Comey's Los Angeles store | Source: Courtesy

Regardless of the channels chosen, maintaining a physical or digital space for engagement is key, and can ground an independent brand’s identity as it grows. For Comey, opening her first store on New York’s Crosby Street five years ago gave her a priceless window into the lives and needs of her shoppers and continues to inform product development. “Everyday, I learn about my customer’s lifestyle: who she is, where she’s going, what her job is and how she travels,” she said. “I got so much more connected to the customer and that’s really huge.”

Protect Your Brand

While marketing might not come naturally to every designer, a clear brand message is crucial to a business’ longevity. It’s as important as the product you’re making, said Chartrand, and “has to be thought out from the get-go.”

Protection comes first. Registering intellectual property rights needs to be done early on as it can be a make or break factor for prospective investors, or be costly down the line if disputes arise, said Carl Steele, partner and head of trademarks at Ashfords LLP. He recommends conducting global clearance searches before registering marks, and keeping records throughout the design process.

Brands should remember to pick their battles. “However successful you are, somebody will rip you off,” said Steele. “But are they really causing you harm?” Designers could be billed thousands of dollars in legal fees, which could otherwise be invested in hiring a new employee. “Often it’s more valuable to put it towards something else and move on.”

However successful you are, somebody will rip you off.

When developing brand identity, recognise the value in a designer's personal voice and presence and keep it consistent. Chartrand lists Simon Porte Jacquemus (whose Instagram account feels both genuinely personal and aesthetically aligned with his namesake brand) as the gold standard.

Many up and coming brands target a younger consumer with high-priced products. The core of branding, said Sophie Jewes, founder and brand director at London-based PR agency Raven, which represents buzzy young brands like Richard Malone, lies in asking: “what are you going to do to command the attention of people who will buy product from you at this price point?”

Press — as well as presentations and celebrity dressing — should factor only after a strong production and sales foundation has been built — and when they do, it pays to be selective. “There are examples of brands that build a big fan base, gain lots of press coverage, and are surviving on brand collaborations, while barely [having] any sales of their own,” said Kuryshchuk. “This never lasts long.”

Grow Slow

There is no hard and fast rule when it comes to scaling a business, but if in doubt, take it slow. Building a strong foundation by investing time and money into business, production and sales comes before visual identity and thereafter, press.

This often comes down to taking a reserved approach to hyped-up media moments and being comfortable with saying no. “[The] LVMH prize [happens] every year,” said Kuryshchuk. “If a good showroom wants to sign you, they should want you next season as well. If a stylist wants to shoot your work, they will come to you again next time.”

Who designers partner with and how they maintain those relationships are also crucial for responsible growth. It is vital that brands "partner with retailers that feel authentic and that they will have a close relationship with," said Chartrand. "These relationships are quite personal and fluid communication between the two is necessary at the early stages and contributes to their long-term success."

Designers should resist the temptation to compare their brands with buzzy "ones to watch," or expect their products to fly off shelves in the first few seasons. Focusing on what they can control — keeping an eye on cash flow, committing only to feasible orders, producing quality items on time and coordinating marketing efforts to engage with followers — is more likely to attract the loyal customers and industry figures whose opinions really matter.

“Starting a brand, specifically in fashion, the highs are so high and the lows so low — it’s such a pendulum shift in your emotions,” said Duncan, who has experience in consulting, beauty and talent management. “You have to learn very quickly how to manage your time so you don’t overextend and go crazy right away.”

Focusing on personal time — limiting social media usage and connecting with people not related to work — is a time-worn, but effective, strategy. Doing so not only gives a designer room to think creatively, but cultivates trust and communication in the studio.

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