Just when we don’t need it bothersome new regulations have come to put a whole new wrench in the industry….

While it may be justifiable to be a little annoyed…it is not quite as ok to be ignorant. Violations of government regulations have been known to slam the doors shut of otherwise viable enterprises.

So what do you need to know about the Consumer Products Safety Improvement Act not to get put out in the cold?

Well first of all shipments of apparel whether imported or domestically manufactured will require a certificate of compliance regarding CPSIA. Every single shipment.

The details of exactly what compliance really means are a lot to get your arms around….so FBI has put together a seminar to lay out all the facts.

CPSIA as it relates to the apparel industry will be discussed by International Custom’s attorney  Roy Van Delbyck and Rick Horwitch of Solutions Business Development at Fashion Business Inc. this Monday December 15th starting at 4pm.

Attendance is free for FBI members and $25 for non members.

For those of you outside of CA we’re also doing a live taping so we can share these important new laws on our website soon.

Click here for more information and to register for the FBI’s upcoming CPSIA seminar.

These days Fashion is becoming a tougher and tougher sale.

Not only are people scared for their own pocketbooks in this tough economy, but they are sympathetic of others that may be even more adversely affected.

Also, contrary to perception of retail sales reports, job losses and industry bail-outs people are still spending money.

Case and point Barack Obama’s presidential campaign.  He raised more than any other presidential candidate in history…in one of the toughest economies in history.  Was it a miracle?  Maybe so.  But essentially people were buying into what they believed could be a better future.  To many people the ideas he presented were worth buying into in any economy.

That said…my point is that people who have money to spend want to spend their money responsibly.  They want to spend their money on not only things that matter but concepts and ideas that really matter to them.

As retailers and manufactures we have to ask ourselves…How responsible are we?  Are we keeping up corporate responsibility efforts in challenging times, doing the right thing and finding ways to support a greater good?

Whether you’re selling sweaters, sweatsuits or hope in a jar…find a way to use your products to make a difference. That difference could not only make a difference to society but to your business as well.

As we deal with increasingly sluggish sales across the apparel industry many companies are being forced to think of new ways to use their existing capacity for additional income.

One growing idea is subleasing extra space in your warehouse or office.

Almost no space is too small.  If you have an approved manufacturing facility you may investigate the option of leasing space to other licensed contractors.  Many independent sample makers or cutters can function with just a table and a small storage area.

If you’re a designer with your own studio you could put some feelers out to see if any other designers may be in the market for an away-from-home workspace.

Even on a temporary basis sharing space could give a new designer that professional touch of office space while they get off the ground…and help you with some passive income as the industry rides out this recession…

Need to sharpen up your retail math skills?

Want to Learn How to Properly Calculate Markdowns…Sell Through…and Analyze your Sales?

Whether you are a retailer or a manufacturer… understanding the concepts behind retail math are imperative to the financial success of your business.

Join Henry Cherner this upcoming Wednesday at the Fashion Business Inc. Resource Center in the Los Angeles New Mart….for:

Retail Math For the Apparel Industry

Friday, November 19th from 6:00-8:30pm

Click Here to Register and for More Information….

Ok lets face it…folks in the fashion industry can be very particular.  We create these brands and we care about them…we want to protect them and we don’t want to leave our “babies,” with just any ol’ retailer.

That means we have to discriminate a bit when it comes to picking the stores we sell to.  No matter how tempting it may be to imagine how black a new account could make our financial statements– selling our brand too short…too soon can have a detrimental effect that just won’t pay off.

Let me tell you a little story to illustrate my point….

A client of mine had these aspirations of creating a high end luxury lifestyle brand.  She imagined her stuff in the windows at Barneys, on the racks of the finest boutiques, on the homepage of international online retailer net-a-porter.com.  Her vision was crystal clear in her mind.  She believed in it and was excited to see it come to life….

But as she sat at her first trade show she watched buyer after buyer pass her by… they’d glance…comment, maybe even take a few pictures… They seemed interested but they weren’t buying….what was she supposed to do?

On the last day of the show, a slightly more mainstream department store paid her a friendly visit.  They were interested and ready to write an order.  I mean they were by no means a luxury brand….but one order from them alone could pay for the cost of her show, save her from hustling for more accounts when she needed to be designing and even allow her to give her consultant (me), a much needed bonus for all my dedication.. hard work, brilliant insight and commitment… (I know that’s right;).

And as much as I wanted and so deserved a little extra padding in my pocketbook I had to keep it real.  The department store deal didn’t make sense.  Of course we had the option of revising the strategy…adjusting our pricing, going slightly more mainstream— but it was only her first trade show.  Was it really the time to sell out?  Was an offer from one vendor offer enough to constitute a total change of plans?

Maybe eventually but not initially.

As you develop your brand you will sometimes have to resist the temptation of big business money…and just give yourself a chance to grow.

I advised that she stick to the program….the brand she wanted…the one she believed in….and the brand she worked hard to create with everything from imported fabric to the paper linen hangtags she loved that made for the perfect finishing touch.

So she took my advice and decided against the major retailer.  However, soon after the tradeshow she was able to acquire about 10 niche brand building boutiques that were interested in finding the next big thing…not just stuff that was sold in (nose in the air)… mid-tier department stores!

Now keep in mind the orders of those 10 stores didn’t even add up to the one order she turned down.

However–she wasn’t trying to host a thanksgiving day clearance sale–she was trying to build a brand.  That takes time.  And that means being strategic as well as pacing yourself.

Soon after she acquired her first 10 stores without a showroom she was picked up by one of the top international showrooms for her product category…who has since been able to place her in niche boutiques all over the world.  A lot more brand appropriate than being sold off to the highest bidder.

She’s since been featured as a top emerging designer in major fashion organizations and publications including Vogue…Not her hometown paper but…Vogue.

The moral of the story–If you have a vision for your brand let people help you refine that vision but don’t ever throw it out the window based on one tempting proposition.

If only for a little while…just believe–trust your gut and see what happens.  It could be better than you’ve ever imagined.

In my 30 plus years in the apparel industry, I’ve witnessed a number of  economic downturns.  The nature of the industry is both cyclical and rhythmic.  The seasons and styles represent the cycles of change and the industry expansions and contractions represents the rhythm of change.

Following each period of expansion, with new companies emerging and established ones growing, there is an inevitable period of contraction, during which some companies may fail and others consolidate. Whenever I’ve observed successful companies that emerge from a contraction stronger than before, it appears that they have one thing in common; they have adopted a positive attitude and not participated in the common conversation of doom and gloom that is pervasive during challenging economic times.

I hear many CEOs talk about finding ways to cut back on overhead during tough economic times.  Rarely do I hear them look for ways to expand on their sale, and when they do, they are invariably more successful and profitable.  Economic downturns are also filled with opportunity, and those who are flexible and have a positive approach will be better equipped to see and seize upon those opportunities.

Some tips to best survive and thrive during challenging economic times:

1. Get creative with marketing! There is always more business available in the market place than is currently being exploited. Explore ALL the possibilities.

2. Maintain a positive perspective.  Avoid the doom and gloom conversations (and the people, if necessary).  Surround yourself with positive people!

3. Remain in the present.  Pay attention on what  must be done today, and do it, rather than looking too far ahead into the future.

Most of the negatives attributed to economic downturn come from fear-based emotions or destructive negative thinking.  The ability to manage emotions and thoughts during such times will likely provide the internal fortitude necessary to survive and thrive during such times.

Robert Silverstone,

President

Silverstone Consulting (CFMS, Inc.)

Empowering Excellence in Business and in Life

www.robertsilverstone.com

Debra Stevenson, FBI board member and founder of BuzzFlikr.com offers some key tips on staying smart in challenging economic times.  Now is not the time to freeze and ride out the storm…Debra suggests taking some action can help your business thrive in the midst of it all.

1.  Understand what consumers want right now.  We’re feeling cash poor but we still crave style.  One of my fave brands, Meghan Fabulous ( http://www.meghanfabulous.com/) moves excess inventory by offering a chic Sale of The Week directly to her customer mailing list.  The prices are seriously discounted, all her fans get a great deal and she stays liquid.  Genius!

2.  Don’t sacrifice your lifeline. As you’re cutting budgets or staff overhead, don’t compromise on key tools for success.  This may be a time to get out on the road yourself to spike sales.  Look for more affordable ways to        continue marketing, PR and media outreach.  Buzzflikr PR offers affordable rates and effective new ways to get your brand noticed (http://www.buzzflikr.com).

As a manufacturer be leary of holding any inventory.  Get the habit of producing “Just in Time,” never “Just in Case.”  The last thing you want to show on your balance sheets to a potential or current investor is a truckload full of inventory you’re “trying,” to sell.

The more nimble you can be in adjusting your product to current trends and your customers needs the better off you’ll be as a company.  Your working capital should be used for working on this and not being tied up in goods that could or more importantly could not sell.

Once you start selling you should definitely take notice of your rate of sale and put in place an infrastructure for a quick reaction to a specific product.  You may want to have your materials on order or quickly accessible.

Keeping inventory may seem logical once you start noticing a clear rate of sale.

Did you know if you’re a California Company with at least one employee you and your employees may be eligible for Free Job Skills Training through Fashion Business Inc.— made possible by the State of California Employment Training Panel.

Although California companies are required to pay into the program as a part of their business taxes…few companies take the time to cash into the programs extraordinary benefits.

ETP job skills training can be completely contoured to the needs of your apparel business.  Including Photoshop, Illustrator, CAD, PAD, Sales and Marketing courses at little to no cost to you.

To see if you meet ETP requirement for free or low cost job skills training at the FBI give us a call at 213.892.1669

Is having debt in your company better than giving away equity?

Seemed like an easy question…I mean after all who needs more debt?

In the FBI Lunch and Learn seminar Debt vs. Equity, FTC Commercial Corp. President Ken Wengrod carefully explained the advantages and disadvantages of both financing methods.

My takeaway…. Giving someone equity in your business in exchange for financing is in essence making them a partner in your business. They’ll be concerned with the in’s and outs and have certain rights to your business and records that someone simply giving you a loan won’t necessarily have. They lose big when you lose big. They win big when you win big. This can be a very good or a very bad thing depending on who your equity partner is and what besides raw capital they are actually contributing to the business.

On the other hand, taking a loan from a person or entity is very different. They get their money back on a certain timetable no matter what. You do good…they get their investment and interest back…you do bad they are entitled to get their investment and interest back. It’s a lot more “hands off.” Again this can be a good or a bad situation. Especially bad if you do bad… Get it?

The main point….It doesn’t pay to make financial assumptions. In fact it does quite the opposite.

It’s important to understand what you need from both a human resources and financial perspective before making major financial decisions. Choosing debt vs. equity financing is too important to in any way be a caviler decision.

This crucial choice is an instance when working with a savvy financial professional could be worth it’s weight in gold….literally.