Our retail market is famed for its professionalism and sophistication around the world but, faced with huge costs from a dysfunctional retail and property market dominated by overseas interests and an “unbalanced” British economy”, most retailers dare not risk stocking the products of start-ups, designer brands or collections made in UK.
Every year the UK produces an estimated 4,000 design graduates and about half of these will want to launch their own business within three years of graduating. Unfortunately, that dream can turn into a nightmare, as most of them fail to understand how challenging and expensive launching a new fashion business is. Why? Because it is all about multichannel!
Gone are the days when all you had to do was design a collection, get it sampled and book a stand at a trade show where buyers would come along and place orders. This wholesale route to market is still important but it is now only half the picture. Many buyers no longer really “buy” at all, as designers and niche UK manufacturers are increasingly being forced online, either themselves or on other pure-play sites. Some will also invest in their own stores or temporary pop-ups.
Companies starting out now have to make huge commitments and financial investments that many simply cannot afford
As a consequence, they have to hold stock, and they now usually spend fortunes on PR and social media to get their brand message out there. They still have to attend the key shows and showrooms to meet customers, press and even investors in the first place but the business, in whatever form, will follow much later.
All of this means that companies starting out now have to make huge commitments and financial investments that many simply cannot afford. Access to “willing buyers with budgets” is the number one issue raised by every designer and manufacturer I meet. Another big issue is charge-backs: UK manufacturers in particular complain that retailers want to take all of the profit but none of the risk.
There are a lot of us who help designers chase their dream – from universities, to agents and even trade associations – but none of us can provide a solution to the fundamental problem: a lack of buyers who want to take a risk and buy.
There are no easy solutions here but I would encourage start-ups as many as possible to get a much better understanding of how the business has changed and what really is involved in setting up a brand in this industry before they start to borrow and invest. I would also urge the industry at large to be much more aware of the very delicate balance needed to encourage UK designers and manufacturers at home and abroad, as, without a supportive home market environment, the next generation cannot succeed.
Paul Alger is director of international business development at UKFT