With stock market dealing screens turning red on a seemingly daily basis and the rolling news channels breaking bad news almost hourly, these could be the seen as the worst of economic times.
Over the summer, thanks to the efforts of Central England Business Angels and Business Link in the West Midlands, we signed an investment deal.
The money began arriving ahead of schedule and the bank renewed our overdraft facility. Perhaps we would not only weather the financial storm but have the funds to grow too.
Investment has created a bigger workload.
Birmingham fashion designer Jacob Kimmie developed a catwalk collection for London Fashion Week and a commercial pre-collection for boutique buyers for Spring Summer 2009. We’re already sampling for Autumn Winter 2009/10 and designing February’s catwalk collection.
An online retailer is interested in developing a capsule collection at a lower price point so the workload looks like it will never ease.
London Fashion Week was a blast. Spending a little more we were able to make a bigger impact by showing independently and booking supermodel Alek Wek. Despite being “optioned” to work on pretty much every show, she only modelled for Jasper Conran, Aquascutum and us. There has been nothing more satisfying than receiving calls from other designers asking how we pulled that one off!
Within days we had received orders from several private clients and Kuwait. Whilst our focus has been the UK, there has been more interest from overseas.
Retailers here are finding times tough, falling back on tried and trusted labels. So it’s hoped we’ll write more orders when we head to Dubai with a number of other West Midlands design based businesses next month. Our website has become e-commerce enabled so that people can actually buy our clothes rather than just say, “I’d love one of those where can I buy it”, suddenly we’re selling to the world. It’s another drain on resources to manufacture the stock but one that will increase turnover.
Every silver lining, however, has a cloud and the fact remains I’m still having to spend time making sure we have the capital for day to day needs, rather than focussing on strategically developing the business.
The crunch has hit us directly with the investment funding temporarily stopping. “The cheque is in the post”, but that doesn’t help us. We could begin looking for a new investor, but in the meantime I have to find ways of making sure we have the liquidity in place to put orders into production.
This raises an important question about the fashion industry in the West Midlands and the black hole it needs to negotiate – from development to finally receiving money from a customer can be as long as nine months, yet the best I can negotiate from a supplier is 30 days. In fact many suppliers are so concerned with cashflow that many won’t release goods without advance payment.
With newspapers full of articles about illiquidity clogging the banking system and the government needing to be doing more for small business, I can’t be the only one saying the government needs to stop pontificating and start acting.
Yet one mechanism that already exists to supposedly help small business is the government-backed but useless Small Firms Loan Guarantee. The major banks operating the scheme have used it to mitigate commercial risk and charging higher fees in the process instead of using it to provide credit to those it would otherwise be unable.
We continue to manufacture garments in the UK; it’s not the cheapest option but Made in England still carries weight.
I’m confident we’ll get through this downturn, but there is little doubt that the next few months will see many small firms going bust.
It will be a disaster if the burning entrepreneurial spirit that drives creative business in this country dies with it.