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How Does Fashion Designer Brand Get Eternal Life In The Industry?

2014/7/6 11:34:00 10

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this is an old text published on the US website. However, it is rare to see the super dry goods of designer's brand management. The reporter excavated it and carefully compiled it to see the light again. Although the American fashion industry is described in the text, its logic and way of thinking also have considerable reference value for people who invest and operate Chinese designer brand.

all designers and brand founders are thinking about a question: when will their company take a new step? A key critical number is: 25 million dollars.

this < a href= "http://sjfzxm.com/news/index_cj.as" > Sales < /a > volume means that an entrepreneurial brand is gradually growing into an enterprise.

Even so, there is no guarantee of success. This road is rough and difficult.

Many brands lose money and few brands can reach 25 million dollars in sales.

The increase in income comes from a clear awareness of the brand; many designers simply can't sharpen their design style enough to support substantial growth.

design ability is important, but only focusing attention can make a designer surpass an interesting and creative level and achieve business success.

"when they have creative ideas, they will try to achieve it, regardless of whether the idea is practical or practical, they will work hard for it," said Jack Hendler, President of Net Worth Solutions. "They think they need to completely rebuild themselves every quarter.

They need to be sensitive to consumers and need to build core businesses. "

Hendler referred to a href= "http://sjfzxm.com/news/index_cj.as", "wing /a" and "poor designers" in the face of financing difficulties. When debts were constantly relying on various financial supporters to help fund operation, debts would quickly accumulate when companies lost money in the first few years.

Even in the fall of 2011, Ralph Lauren also revealed that he had been close to bankruptcy many times. "The white knight who helped him, his family and friends and all the people involved were tired of it."

although $25 million may be a critical number for the brand to take shape from its embryonic stage to its maturity, many designers can support it by controlling the size of the enterprise within a smaller scope and living within its means.

"we have funded hundreds of companies and can earn money without having to sell tens of millions of dollars," said Gary Wassner, President of Hilldun Factors. "They did a good job.

It's just that some of them can't become Tory Burch.

The public can never regard them as big names.

small brands make money by hard work and creativity, with the support of sponsors for fashion shows with as few samples as possible.

"what I usually hear is that if they produce 100 samples in one quarter, they will sell 50%-60%."

"Better planning can help them save a lot of money," Wassner said.

Each sample costs $1000, while fur coats and coats can cost up to $4000.

gimmick and media exposure can also help save a lot of marketing expenses.

Wassner said that a well-known high-profile brand requires only one salesperson to get enough orders. However, a low-key company may need to spend 200 thousand to 300 thousand dollars to hire three salesmen.

experts agree that designers must control such sales expenses, daily expenses and administrative support to support their business.

designer led brands, gross margin (the difference between sales revenue and production and distribution costs) is quite substantial. The initial gross profit margin may be 70%, and then reduced to 50%. This is due to shops' reduction in shipping accident average and sales of unsalable goods.

but for the brand, the higher the profit margin, the more limited the sales channel.

Victor Wahba, partner of WeiserMazars, an accounting and consulting firm, said that a design brand with a sales volume of 25 million would have a profit margin of 40%. After the cost of production and freight were spent, 10 million dollars would be left behind, and 6 million 250 thousand dollars would be spent on administrative expenses. 3 million dollars would be used to organize two dazzling fashion shows, leaving the company with a profit of about 750 thousand dollars.

"P > this is not cold, but it is usually unimaginable.

before most companies reach this level, they also have other sources of funds, such as the design fees they earn for the mass capsules made by mass retailers or other retail brands, their own retail outlets selling directly, or richer brand licensing agreements.

"epitaxial income usually begins with the authorization of perfume," Wahba said. "Accessories have also gained a lot of attention in the past 20 years."

in order to get an authorization agreement, a brand needs popularity and a decent distribution channel. This is the origin of the magic $25 million, because this level means that the brand has a certain reputation among consumers.

"a brand with a sales scale of only $10 million is not authorized to do business," said John Howard, chief executive officer of Irving Place Capital and John Schouler of Proenza Schouler.

"How much is there a chicken or egg?"

once a brand is big enough to expand other categories, there will be many ways to choose from jeans to shoes to bags.

"in the end, it's all about accessories," Howard said.

"There are very few fashion brands and luxury brands earning more high-end people's money.

It's really hard to make money by selling only what is ready to wear.

We are always confused by the number of LVMH, but in reality, especially in the US business, there are not many designers leading enterprises to achieve those figures.

then, for those designers who have reached the level of US $25 million sales and try to take the next step, what is the critical number for them? The answer is: $60 million.

"many private equity funds will target companies with sales of $60 million or more" for investment, Douglas Hand, a lawyer and co founder of Hand, Baldachin & Amburgey, works with designers.

At this level, you have already duplicated the framework of customers, and already have core consumers who will buy them every season.

Once you have completed the framework, it is hard for you to push them away.

Not only your customers will buy, but also retailers will know. "

and then waiting for you is boundless sky.

If a company continues to grow more than 60 million to 100 million dollars, and then 200 million dollars and higher, they can start to focus on the open market.

In 2011, for example, there are public offerings of Prada, Ferragamo and Michael Kors.

this way not only allows enterprises to obtain funds to expand their businesses further, but also another temptation: personal cash! Michael Kors has cash in the initial stock offering of her company by 117 million dollars.