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The Risks and Rewards of a Private Client Business

A number of London-based designers run small yet thriving private client operations, alongside wholesale and retail. It’s hard work — but the pay-offs make it worth the effort.
Emilia Wickstead's Spring Summer 2020 show at London's Royal Albert Hall | Source: Getty Images
By
  • Tamison O'Connor

LONDON, United Kingdom — On Sunday afternoon, a group gathered outside the Royal Albert Hall, awaiting the start of the historic venue's latest event. But the crowd wasn't there for a matinée performance of Beethoven's ninth, lining up instead for a front row seat to Emilia Wickstead's London Fashion Week show. Among the hubbub was the regular lineup of editors, buyers and stylists — as well as a handful of the brand's top private clients.

Wickstead started her label in 2008 as a bespoke service, branching into ready-to-wear in 2011 and launching wholesale four years later to help grow the business. But private client orders remain integral to the brand, accounting for 40 percent of direct retail revenues today. It is the brand’s fastest growing direct retail category — forecast to increase 30 percent year-on-year in 2019, according to Wickstead.

In addition to wholly bespoke designs, Wickstead offers a faster "made-to-order" service, where clients can select a garment from the ready-to-wear collection and have it made in a colour and fabric of their choice, receiving the finished look in 35 working days. This also provides a healthy margin — a made-to-order piece costs around an additional 35 percent of the garment's original retail price.

What you're doing is essentially going direct to consumer. That interaction with your consumer and how all that happens is the key to it working.

A number of names on the London Fashion Week calendar operate small yet thriving private client businesses alongside their retail and wholesale arms. To be sure, this is nothing new. Couture houses have operated this way for decades, while designers that struggle to sell commercially often take this route. But for ready-to-wear designers, private client services are about forging a strong emotional relationship with customers, which ultimately will benefit the bottom line.

“It’s the age-old rule that 80 percent of your business comes from 20 percent of your clients. Of course you really want to be looking after that 20 percent unbelievably well, because that’s where the growth of your business is going to come from,” said Helen Brocklebank, chief executive of Walpole, the official sector body for UK luxury.

Maintaining private clients can be a lot of work, especially for a small brand. Bespoke fittings are time consuming, and the client-brand relationship needs to be managed year-round, requiring additional staff resources and money. Small brands without robust ateliers can find their margins challenged if they are too focused on bespoke creations. But the connection to the customer is invaluable.

"What you're doing is essentially going direct to consumer. It's that interaction with your consumer and how you work with them — and how all that happens is the key to it working," said designer Giles Deacon, who shuttered his ready-to-wear business in 2016 to focus solely on bespoke creations for private clientele.

The value of fostering private client relationships doesn’t just lie in the profit margins. Working closely with customers can give designers real-time feedback, helping inform what may work well commercially.

A custom design by Giles Deacon | Source: Courtesy

“Even though it’s not a huge percentage of our business, it’s a really important part,” said Justin Thornton, co-founder of London-based label Preen by Thornton Bregazzi, which derives about 10 percent of its revenues from private clients. “We get feedback and we learn about what our customer wants.”

A private client business can also help with cash flow, as clients will usually pay a deposit upfront when placing an order. These sums can be significant, with a client’s budget often rivalling that of an independent boutique. For bespoke orders, the needs of the client rarely align with the seasonality of the fashion calendar, providing a year-round revenue stream.

It can also bring in additional exposure, with private clients acting as unofficial brand ambassadors that attract other high-net-worth individuals. Preen designers Justin Thornton and Thea Bregazzi were introduced to Michelle Obama after she’d seen a friend — who regularly attended the brand’s trunk shows — wearing the duo’s designs.

Staging trunk shows is a more strategic way for brands to meet new clients. At trunk shows, attendees can try on and pre-order pieces from a brand’s latest collection in an intimate and private setting, shortly after its debut on the catwalk. Often the trunk show format involves partnering with a wholesale retailer, which will invite its own high-spending customers.

But brands are seeing the benefit of going it alone, hosting events and trunk shows without the help of department stores or boutiques, which can take a hefty wholesale commission on orders placed during events.

Preen has been hosting trunk shows for over a decade in key global cities like Los Angeles and Tokyo. The brand will partner with a host “that has a network of friends who are interested in your style of clothing,” explained Thornton. Preen will organise drinks and refreshments for the evening, which could take place in a hotel suite or gallery space. Sometimes the host will offer up their own home as an event location.

“It’s often nice to do it in an apartment or a penthouse, because there’s a more relaxed vibe,” said Thornton. “We don’t want it to feel like a shop. It needs to feel like you’ve been invited to a friend’s place.”

Other designers have begun to invest in staging exclusive events for private clients, opening up permanent locations that can facilitate a regular events roster. After 10 years in the business, Osman Yousefzada opened a physical store in Fitzrovia last year, relocating to a 1,500-square-foot Covent Garden location in August, which houses his design studio and atelier, as well as a head office. The space is ideal for entertaining private clients, whose purchases account for one quarter of the business.

“It’s a space that can be cordoned off quite well, so it’s interchangeable. There’s lots of dividing curtains and we can make it as private and intimate as possible,” he said. The brand’s events range from an intimate shopping evening with five or six VIP customers, to artist installations and exhibitions.

It breeds brand loyalty. I like to think the customer knows me, and she does.

Amanda Wakeley also hosts events at the brand's townhouse on Albemarle Street, a location she was drawn to because of its home-like feel. In addition to one-on-one shopping appointments, Wakeley hosts dinners, talks, even dance classes with clients throughout the year. During London Fashion Week this season, the designer held a cocktail evening and exhibition at the store.

“[The experiences] feel incredibly personal,” Wakeley said. “It breeds brand loyalty. I like to think the customer knows me, and she does.”

Of course, designers need to be able to balance these services with the rest of the business. This is one reason Preen’s Thornton and Bregazzi are happy with keeping its private clients arm contained. “I don’t want it to be that we couldn’t manage it,” Thornton said. This year, Yousefzada hired two staff members to oversee private client fittings in order to free up some of his time.

But while stellar service is important, designers cannot forget that a clear brand identity or design aesthetic will ultimately be what ensures customer loyalty over time.

“Clients are looking for your idea, your individuality and the essence of what makes you unique and special,” said Deacon. “These clients shop all over the place… so you have to have something specific that they come to you for.”

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