In Focus Risk
Credit in the fashion industry: timing is everything
Fashion retailers face unique challenges, meaning that credit needs to work together with other departments
Atul Vadher International credit manager, French Connection VadherA @
frenchconnection.com
Recently, I was asked to present in one of the streams at CCRInteractive, in association with Marston Holdings. After much deliberation on the subject, I thought I would give the audience an insight into credit within the fashion industry, which you will note involves much more than just collecting payments.
Ahead of time Back in October, while you were there debating whether to turn the heating on or not – albeit rather reluctantly – we, in the fashion industry, have already finished delivering our winter products to our wholesale clients, and as I write this our Christmas lines are now en route, just in time for those Christmas parties. Summer 2018 sales orders have already
been confirmed and production is in full flow. These order are expected to arrive at our premises by November or December, with the multinationals and department stores looking to receive and merchandise the range in store as of December. Samples for Autumn/Winter 2018 are
being sent to our agents and sales teams, enabling them to contact existing and new customers for appointments. Delivery dates commencing for Winter are expected to be early June or July. The design team are working on prototyping Summer 2019, looking at themes, shapes, colours, and design details. I am sure, at this stage, you are thinking of
The Devil Wears Prada, well you would not be too far off the mark. Incidentally one of my favourite quotes from the film is as follows:
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Miranda Priestly: You have no style or fashion sense. Andy Sachs: I think that depends on… Miranda Priestly: No, no, that was not a question.
While you were there debating whether to turn the heating on or not – albeit rather reluctantly – we, in the fashion industry, have already finished delivering our winter products to our wholesale clients, and as I write this our Christmas lines are now en route, just in time for those Christmas parties
Delivery windows Each year is made up of five seasonal blocks with specific start and completion dates; we refer to these as delivery windows. For the industry, this is one of the most important parts of the process to keep in mind, and control of. Deliveries after completion dates will affect your sales and margins. The season’s ranges are categorised as
‘Transitional’, ‘Summer’, ‘Midsummer’, ‘Winter’, and ‘Christmas’. The Midsummer and Christmas products tend to be items that are either lighter or heavier garments compared to the main seasons. The transitional ranges, on the other hand,
do cross over from one season to the next, the styles and themes tend to be more all- rounded allowing for the product to sit well alongside the season’s display. Orders are taken at fashion shows, by
appointments either at the customer’s premises or in our sales offices. The strategy is that each item has a product and occasion mix, such as weddings, parties, everyday casuals, and so on. By selling the story in this way, the business partner is able to represent the same to the consumer within their own retail outlets.
Varying strategies The types of clients that we trade with can vary from multi-department stores, online
December 2017
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