"Leading fashion brands emphasise, right people, proper funding and strong brand values are the key factors that help a small start-up to grow into a booming business. Cornish fashion brand Seasalt and Kent-based kidswear retailer Childrensalon both started as single, independently-run shops but now have multi-million-pound turnovers. New companies, from fast fashion specialists In The Style and House of CB to women’s wear etailer Sosandar, seek to make this transition."
Leading fashion brands emphasise, right people, proper funding and strong brand values are the key factors that help a small start-up to grow into a booming business. Cornish fashion brand Seasalt and Kent-based kidswear retailer Childrensalon both started as single, independently-run shops but now have multi-million-pound turnovers.
New companies, from fast fashion specialists In The Style and House of CB to women’s wear etailer Sosandar, seek to make this transition. However, there are several challenges on the way, points out Emma Jones, Founder of start-up support network Enterprise Nation and co-chair of the government’s recently formed Small Business, Scale ups and Entrepreneurs Council.
Finding and managing the right people
The first challenge is finding the right talent, managing their recruitment and motivating them. Arranging the funds required to expand operations is also a huge challenge. Thirdly, production is a key question besides managing the financial pressure and requirements of an ever-expanding team.
A five-year business plan to counter investment issues
One of the earliest and ongoing considerations for expansion is investment. Some advice against jumping into the process too quickly, and risk becoming distracted or giving up control. Womenswear etailer Sosandar was launched in September 2016 with £2m in start-up capital from private investors. A year later, it raised £5.3m through an IPO on the London Stock Exchange’s junior market Aim. In October, it raised a further £3m through a placing arranged by Shore Capital. This week, it revealed a revenue growth of 219 per cent for the three months to December 31.
Julie Lavington, who co-founded Sosandar with her friend, Ali Hall believes brands need to have a five-year business plan as unless a business is immediately profitable, it will have to raise enough money to sustain through unpredictable conditions. Entrepreneurs also need to find the right source of investment from a range of options including crowdfunding to angel investment and venture capital.
Sufficient profit margins needed to fund growth
Patrick Dudley-Williams, Founder of men’s clothing, swimwear and accessories brand Reef Knots and Chairman of UKFT Rise, a network for fashion entrepreneurs, advises brands to factor in enough profit margin to fund their growth. According to him Cashflow is the key to keeping small businesses in the fashion space alive. Jones from Enterprise Nation advises brands to hire the right people to cover sales and business development, operations, and finance. Neil Chadwick of Seasalt argues that a fashion business needs to combine creativity with operational excellence.
Upholding company values
Independent children’s wear retailer Childrensalon has grown at a phenomenal pace in recent years. Originally founded as a shop in Tunbridge Wells in 1952, it made £76 million in sales in 2017. Its culture centers around the simple statement: People before profit. This ethos remains today. The company team speaks 32 languages, allowing the retailer to better serve its international customer base. It also provides garment measurements and personal shopping tips to make the experience easier, and, when possible, hand delivers orders if there has been a delay.
Though entrepreneurs have confidence in their own abilities and vision, they face periods of enormous self-doubt. At such times it is important to seek advice, believes Jones. In short, the most important thing for brands to avoid pitfalls is to be prepared with the right investment, team and culture.