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The Drapers Interview: Closet London CEO and founder Sajjad Baig

Sajjad Baig

Chief executive of Drapers Award-winning womenswear label Closet London Sajjad Baig is patriotic about manufacturing and preparing for future growth.

 

 

“It was a complete surprise,” says Closet London’s chief executive, Sajjad Baig, of winning Young Fashion Brand of the Year at the Drapers Awards 2015.

“It’s something we were pursuing. We’re very fortunate, as I’m sure there are many companies that deserve it. It’s very encouraging – it gives you more confidence as a business and it makes you want to keep pushing on to do what you want,” he adds.

When we rebranded we became a different firm, it allowed us to create what we wanted to create

Pushing forward has been at the heart of the business over the last 18 months. In May 2015 the label Baig founded 20 years ago rebranded, adding “London” to its name. At the same time the number of collections was increased from six to 10 a year, each with 30 to 40 pieces, focusing on quality with a renewed vigour.

“The product has gone from here to here,” says Baig, gesturing from the floor to the ceiling at the company’s head office in Mile End. “We still have that core identity but we’re using better fabrics from the top mills in Italy, which work with designer brands such as Prada.”

Upping its game

Baig says working with brand consultancy People Made helped the firm clarify its position in the market and perfect its handwriting, as well as upping the quality of the product and its price architecture: “It helped us understand our business and made us believe in what we were doing. That, in turn, improved customer perception of who we are and what we do.

“Before, we were stuck in one spot and couldn’t break out of a certain price bracket. When we rebranded, we became a different firm, it allowed us to create what we wanted to create.”

As well as improving the quality of fabric, Closet London has increased the quantity it uses in skirts and dresses to create a fuller, more voluminous look.

The price range has rised: wholesale prices now start at £12.50 for tops and peak at £53 for occasionwear dresses. Historically the most expensive dress in the collection was £14.

Now we are at a comfortable place and our customers’ perception of the brand has changed

Baig says the price increases were phased in over several seasons and have been welcomed by its 225 stockists in the UK and Ireland, which include Asos, Simply Be, Zalando and Next Label, and more than 200 internationally.

“At times we reduced our margins to blend it in but now we are at a comfortable place and our customers’ perception of the brand has changed. They can warrant [the price increases] because of the quality of the product coming through.”

Baig plans to exhibit at trade show Pure London on 12-14 February for the first time since 2004 to show off Closet London’s new offer and more premium positioning.

“We’re always looking for more customers. The kitty can get empty if you don’t keep topping it up,” says Baig. “We also want to show how the brand has changed. People saw us a long time ago and I don’t think they will recognise us. Independents, in particular, are still an important part of the business as they give you honest feedback.”

Independents, in particular, are still an important part of the business as they give you honest feedback

Closet London is currently investing in the back end of its systems to enable wholesale customers to order online. The new system should be up and running within the next few months.

Direct line

From a retail point of view, Closet London launched its transactional website in November 2012, giving the brand its first taste of selling direct to customers. It had started selling online through Dorothy Perkins two years before and the team noticed rising demand from shoppers. Online concessions with House of Fraser and John Lewis followed.

Online sales from Closet London’s own website currently makes up 10% of total sales, but Baig say that will eventually grow organically to 50%.

A bricks-and-mortar presence is on the cards, although there has been talk of Closet London opening a store – Shoreditch in east London has been mooted as a possible location – for several years. Baig says he is “definitely planning” to open a London flagship in the future, but he would not be drawn on dates or locations.

The brand is also growing its international presence and is stocked in independents and etailers across Europe and worldwide, including ModCloth in the US, The Iconic in Australia, Tangs in Singapore, Reliance in India, and stores in South Africa and Nigeria. International sales make up around 45% of Closet London’s turnover, which Baig declines to reveal. He says sales in France, Germany and Spain are “strong” and will continue to grow given the brand’s British heritage, which is popular with customers in Europe.

Closet London autumn 16

Closet London autumn 16

Closet London autumn 16

East Enders

Closet London’s British pedigree is genuine: it designs and manufactures all of its products in east London, using seven local factories, most of which work exclusively for the label.

Baig describes the relationship with its suppliers as a “partnership”: “I’ve always been very passionate about making in the UK. It’s very important that we are loyal to our factories. It’s a partnership and we work together.

“There are a lot of benefits of having control,” adds the entrepreneur. “We are based in London, we design in house, we sample in house, we fit in house and our factories are less than 20 minutes away, so we are very efficient. Our factories can make two deliveries a day if they need to. We work closely together and the flow is very easy.”

If we expect more from our factories, we need to pay them more

Baig dismisses the idea that higher costs are a barrier to manufacturing in the UK, but he adds that a lack of skills is a worry for the future: “It’s a big issue. I’m encouraging the guys in our factories to get their children interested in the business so they can carry it on. If someone is looking to retire, we need to manage that and find someone to replace them. We always need to make sure we have enough people coming through.”

And Closet London has invested to ensure continuity: in 2014 Baig took the decision to increase what it paid to factories by 20% to encourage growth and maintain high product standards: “We wanted more stringent quality controls in the factories, so I decided what we were paying needed to be pushed up. If we expect more from our factories, we need to pay them more because if they aren’t in business, we’re not in business.”

Baig says the “jury is still out” on the impact Brexit will have on British manufacturing and brands, as many fabrics are imported from Europe and are now more expensive following the devaluation of the pound.

He adds that many of the skilled workers in the factories are from Europe, but for the time being he is not worried that they will leave the UK: “We have to cross that bridge if and when we come to it. We can’t predict what will happen. I have to ensure I support the factories. If the workers are getting paid well and it’s a reasonable earner for the owner, it will stay in business.”

Jenny Holloway, chief executive of north London clothing factory Fashion Enter, does not work with Closet London, but says the brand was “well ahead” of its womenswear peers in realising the advantages of producing in the UK: “They understood the benefits of staying in the UK rather than offshoring in terms of transparency. A lot of retailers and brands are really concerned now about the lack of control with regard to subcontracting. Working in the UK with local factories puts the business back in control.”

British born

The roots of Closet London are firmly cemented in supporting British manufacturing, as Baig began his own business sourcing fast fashion from factories in London for retailers in Scotland, after giving up his job at the age of 29 and after stints on the shop floor in both Marks & Spencer and Austin Reed.

“It grew very slowly. I hunted through factories for product. I didn’t know what margins were and I wasn’t very experienced,” laughs Baig. In the mid-1990s he observed a sharp increase in the number of factories folding in London as production off-shored to eastern Europe. Market conditions forced the CEO to take matters into his own hands.

“One day I went to buy from the factories around London and half of them had closed down,” he recalls. “I realised that, if this carried on, I would be out of business in two weeks. I felt I had an eye for fashion so I decided to buy some fabric, get someone to make patterns for me and put them into the factories. That’s how Closet started.”

Every year we have a challenge, but we are building customer by customer

Twenty years and three office moves later the business has gone from one-man-band to a 38-person team. The headquarters will expand into the space next door in the coming months.

“Every time we move, our business grows, both in terms of sales and staff numbers,” he says, adding: “I’ve been very fortunate to have a great team around me, many of whom have been here for several years.” Baig wants to double the size of the team in the next five years.

“We expect that growth in terms of team members and sales to continue. It’s a tough market but we’re quite a young brand, we’re energetic and we want to get our message out there. Every year we have a challenge, but we are building customer by customer. Let’s see what next year brings.”

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