How I fashioned a new cashflow from unwanted stock

my-best-mistake-trelise-thumbBeing a fashion designer means having the ability to transform fabrics into bestselling items. But what if the fabrics you’re working with aren’t always what you imagined them to be?

This was the predicament of fashion designer Trelise Cooper.

Cooper is the founder of three fashion labels – Trelise Cooper, Cooper by Trelise and Trelise Cooper Kids – which boast a clientele including Julia Roberts, Liv Tyler and Miranda Kerr.

Born and raised in New Zealand, Cooper established her business with no formal training. She now employs around 120 staff in Australia and New Zealand, with 12 boutiques and more than 300 stockists worldwide.

In 2004, she was awarded a New Zealand Order of Merit for services to the fashion industry. And while her achievements are impressive, Cooper is quick to highlight her best mistake.

“I began my business originally in 1984… By 1988, I was finding business difficult and I had my son at the beginning of 1988 as well,” Cooper says.

“I had a new baby and a hard business, so I closed down. I started up again in 1997.”

When Cooper initially established her business, she would purchase her fabric “mostly from agents and from Italy”. However, she would only receive a small swatch of fabric to go off.

“You had to commit to like 300 metres or 500 metres before they would mail you the sample,” she says.

“In 1997, the swatches had got bigger but when the whole roll would come, I would say, ‘That’s not anything like what I thought’ or ‘My direction has gone another way and this no longer feels like it belongs in the collection’.

“I’d be in denial and it would go under the cutting table.”

But Cooper soon found she couldn’t deny the unwanted fabrics forever.

“I came to realise I was ignoring rolls of money sitting under there, not rolls of fabric,” she says.

“I realised that was where my cashflow would be if I didn’t cut it and make it and sell it. My cashflow was tied up in those rolls of fabric.”

“If I order it, I need to add value and sell it on. I made sure that what felt like a disaster would become the bestseller.”

Just recently, Cooper faced this challenge with velvet, which, according to her, is beautiful but hard to work with. She managed to turn a mediocre piece into a standout.

“We had a multicoloured velvet but when we made it up as a coat, it looked like a dressing gown. I loved the fabric but it wasn’t working,” she says.

“I realised the velvet needed to be cut in a thoroughly modern way, so we cut it into a bomber jacket and tea-dyed it to make it look vintage… Now, everybody wants one.”

“It was about taking something that we loved but couldn’t make it work. The minute we tea-dyed it, it became very vintage.”

“We pared it back and dressed it down instead of trying to make it into a duster coat, which was our first idea but it wasn’t working.”

While Cooper’s expertise lies firmly in the fashion industry, she believes the lesson she learnt is one that all entrepreneurs should take note of.

“You have to think about where your money is sitting,” she says.

“I don’t make stock but if I have stock sitting on the table, I don’t think of it as a garment but as cashflow – that is where my cashflow is.”

“I can’t use that money for the next season if it’s still sitting on a hanger. I look at it as rolls of money and hangers of money.”

As for all the unused fabric, Cooper decided to open a fabric store.

“We cleared 10 years’ worth of fabric out of it. We just closed the fabric store because we have no more fabric left. We’re putting the money back into the business,” she says.

“In fashion, a lot of people who are retailers hang onto something because they don’t want to discount it or get rid of it. My mission is to turn it back to cashflow as soon as it’s viable.”

“It’s better to get something back for it and turn that back into cash.”

“I think if you are [overly sentimental about stock], you get enveloped in garments and there becomes no room. Every season, we have to have everything cleared out.”

“If we’ve got last season’s stock sitting there, it really quickly piles up. We must deal with it.”

Article source: http://www.startupsmart.com.au/my-best-mistake/how-i-fashioned-a-new-cashflow-from-unwanted-stock.html By: StartUpSmart presented by RetailStartupInABox

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