FGI Panel Discusses Making Money in a Down Economy
There is still money to be made if businesses are smart about their strategic planning.
That was the message at a March 26 panel of industry experts that candidly discussed strategies by which brands can ensure profitability, even as the economy continues to flounder.
Organized by the Fashion Group International–Los Angeles and hosted at the accounting office of Stonefield Josephson, the “Staying Alive: The Fundamentals of Making Money in a Down Economy” panel was moderated by Ilse Metchek, president of the California Fashion Association. “In an economy like this, [business owners] have three options: strategize, reinvent or moan,” Metchek told attendees. According to the panel, there are several opportunities for businesses to save money and make money in this recession.
Know thyself. Business owners don’t always have a keen understanding of what exactly defines the financial health of their company, the panelists said. After cash, inventory—or lack thereof—is key to a business’s health.
“Inventory is a killer,” said Ron Friedman, head of Stonefield Josephson’s Apparel and Textile Division. He advised designers to make only the garments that have been ordered and no more.
Roni Miller Start, an expert in retail marketing planning and the department chair for the Fashion Institute of Design & Merchandising’s Apparel Manufacturing and Special Programs, agreed and cautioned brands from holding onto their inventory for too long. “Don’t fall in love with your inventory. Sell it,” she advised.
Maintaining credibility and the value of a brand, panelists said, can be difficult when a business is experiencing financial hardships. But mitigating the fallout is important. Business owners need to pay bills as close to on time as possible and keep vendors and business partners abreast of their situation to build a good reputation.
Cutting business costs is also important, panelists said. Miller Start recommended paring down a brand’s design room and product-development department. “Buy less yardage and work with your vendors. Focus on who buys your brand,” she said. “Find ways to streamline your production time. Speed to market is key.”
Other ways to trim costs include negotiating rates and payment schedules with lenders, factors, banks, suppliers, landlords, customers and utility companies. “They want to get paid, not be surprised [when you don’t pay],” said Benjamin Seigel of Buchalter Nemer, an attorney who has represented numerous types of interests and significant parties in bankruptcy cases. Lynne Sperling, a retail and manufacturing consultant with Sperling Hileman, advised manufacturers to learn from costly mistakes as a way to save money in the future. “Chargebacks, shipping violations and fit problems all cost money. Don’t make those mistakes twice,” she said.
The panelists agreed that now is the time to reach out to experts and consultants. “Talk to your accountant, talk to your lawyer, talk to everyone,” Seigel said. “Get help. Things aren’t going to get better quickly.” —Erin Barajas
