Talking on financing is one of the most important decisions a fashion label will make. To have a chance to raise money from an investor, depends very much on the nature of your fashion business. It’s true that this is not an easy step but, if you keep on going for your goal, you’ll have many chances to reach it.
Designer Stephanie Rolland, Photo source: Arstcrylogique
If you have just started with your fashion label you might know from the beginning that it’s very hard to raise money from an investor. This happens because investing in a new designer is very risky. You don’t know if your business will work so that you must test it first and then, go to check out for investment. I’ve recently read an interview with fashion designer Stéphane Rolland who had the chance of being funded by some investors, and she’s saying that “nobody is ever being known to produce a first collection on break even. It’s an absolute risk. It takes at least a minimum of 2-3 collections to see the light.”
The best thing you can do when you are at the beginning with your label is to talk with as many advisers as you can. Investors may have advice to offer, and you might take this under consideration.
We highly recommend you to check out Astia which is an international, mentoring and training organization that prepares women-managed startups for funding, and then helps to introduce them to investors. Their track record is: over 60% of their graduates receive angel or venture financing.
The good news is that with your business plan in hand proving that your fashion business have a strong vision and makes profit, your chances to get finance to your fashion label increases.
When you are sure about your business profitability, it’s time to talk with some angel investors. There are active investors in fashion lines, but they are hard to find especially if you do not have a track record.
Here are some key investors who take chances to fashion labels.
1. Jeffrey M Aronsson - Aronsson Group - they are a group that restored Oscar de la Renta’s profitability, fixed the Company’s capital structure problem and paid off all debt, tripled its sales, while improving gross margin by 800 basis points. They also have returned Donna Karan International to profitability within 2-years of taking helm after 4 years of losses since the LVMH takeover in 2001. They initiate a strategy and pushed development for the Marc by Marc Jacobs accessories line.
2. Monica Mehta - Seventh Capital the New York- based investment firm main focus is small and middle companies. They focus on one to two acquisitions per year and maintain a long term investment horizon. They are interested of seeking investment opportunities in e-commerce, consumer web and financial service companies. So if you’re not a designer but have an idea for an online retailer, or if you sell your goods primarily on the web, it might be worth looking into.
3. Andrew Rosen - HM Capital Partners. The Theory founder and CEO, Andrew Rosen is an investor in Proensa Shoulder, and also he bought fashion house Helmut Lang from Prada. Henvests publicly and privately in brands.
4. Marvin Traub, Marvin Traub Associates - Traub is best known as a prominent business executive in the retail sector known for his impact on merchandising and marketing. He spent 22 years as a CEO at Bloomingdale’s. He mostly consults for big companies but he is also a partial investor in brands like Rachel Roy and Matthew Williamson.
5. Sage LLC - This Los Angeles based independent investment banking advises its clients on a wide range of mergers and acquisitions. Their trusted advisers are the people you reach out to when you’ve already built a successful business and want to take it a step further.
6. Trapezia Capital – is the Uk based fund investment dedicated exclusively to investing in high growth women-focused businesses.
Photo: Chloe & Isabel
7. George Bell - General Catalyst Partners which is a venture capital and private equity firm that invests mainly in entrepreneurs who are building technology-based companies but it recently invested in a few fashion and lifestyle companies including Chloe & Isabel.
8. Robert Bensoussan - Towerbrook Partners Robert Bensoussan formerly CEO of Jimmy Choo is raising a fund to invest in fashion businesses with sales of $30m. They are based in Europe and the USA and focuses on making investments in European and North American companies.
Designer: Marios Schwab / Photo Source: icon concierge
9. Wendy Malem - The Centre for Fashion Enterprise is a London based business incubator that supports and nurtures emerging fashion design talent. They identify and selects designers from the UK, to fulfil consultancy and collaborative roles for UK and international fashion and lifestyle companies, and negotiates licensing and sponsorship deals on behalf of designers. The CFE boasts a past and present roster of international designers includingErdem, Peter Pilotto, Marios Schwab and Richard Nicoll; iconic names known throughout the fashion industry for their innovation, creativity and desirability.
A good idea might be to take a look at all those designers who already raised finance and learn about their businesses, how a business should be to take a chance in front of the investors.
Once you have successfully raised your funding, you will need to think carefully prioritising key areas to allocate the capital across the business needs you have identified in your business plan.