Big Retail, Little Wholesale. Small steps & stories, Fashion Compass.

I have noticed quite a few larger retail brands and store groups that are experimenting with wholesale where in the past they didn’t. Here are a few wholesale stories.

I put large retail needing wholesale down to a number of facts but to me the most important is that it allows them to act small. The “Act Small Think Big” has always been my preferred approach whenever possible. In fact, small brands and start-ups, I often tell them enjoy the advantages of being small because they can do things the big boys can’t. (But they can).?Quite often also the smaller brands, so desperate to get seen do things out the box which later becomes a key part of their uniqueness and in turn success.?

8 years ago, I took a top Greater China partner/ distributor to a leading U.S. retail and shop-in-shop brand. I was working for the partner to advise/ negotiate new brands for their territory. The brand only wanted the partner to open stores and shop-in-shop, NO WHOLESALE they said, it’s not worth the time and money. The China partner went elsewhere as they felt it was key to be able to slowly feed the brand into the market and lay a foundation to open own stores further down the road. I think the China partner knew what they were doing, they did already have 2000+ stores under license with a brand barely known prior.

I got why the U.S. brand didn’t want to do wholesale, not only the fact it was small fries, lots of work and those number crunchers, no ROI. (I have seldom known a number cruncher to start a brand but seen many of them finish them off:) They also had a reason; they did not want consumers to be introduced to the brand in small wholesale presentation. So if a retailer only bought 3 to 4 styles the consumer would not really get the brand experience. Fair enough.

Well fair enough, but some is better than nothing and seeds grow. Also, most brands, retail or alike achieve around 70% to 85% of their sales via 10% to 20% of their collection so if you are putting your best foot forward then surely the whole purpose of fashion, follow your winners lets you get those in first.

In an opposite way I took a leading Indian conglomerate who also had retail/ distribution in their locker to one of the U.K.’s leading brands who did have wholesale and had already been doing some wholesale with quite a traditional Indian importer. Although small (around ￡200k wholesale), it had laid a foundation and caught the eye of the Indian conglomerate that opening stores with a brand already trading there made a lot more sense.

A presence, even in a small wholesale way in cool, busy stores can have a huge knock on effect with online sales. I won’t go on too much about wholesale helping ecommerce as despite highly important it is very obvious.

On a note of online it reminds me of when I spoke to a friend and former Managing Director of NEXT when he told me in around 2001 he asked their wholesale head of sales, “any appointments today?”, “yes” said the head of sales, some new company ASOS but they only buy about 12 pieces of a style and only around 10 styles max”.

In general, though with all clients that approach me to enter new markets especially where I am dealing with the original founders, I take them back to when they first started, when they would almost take any sales they could get. How tough, the struggle, everything and I try to get them as close to that as I can as it creates a realistic and determined mentality.

I also advise partners to go after good brands, who may not be the biggest. I did some work helping India’s massive online store I wont name who asked me to set up meetings with one of the U.S.’s largest retail brands. “Why Them? . Isn’t 70% of India’s population under 35 (I was quoting an article I recently read back in 20015). The U.S. brand average customer was well over 35. The only reason they wanted it was, it was a huge company, mind boggling.

Wholesale is good in any quantities! It may have lost its shine with all the hoi polloi of ecommerce but ignore it at your peril. I am often asked “what should I have as minimum quantity orders?” by brands of all sizes to which I always reply, “don’t have minimums”. In 1998 I sold two jumpers to a boutique in Stockholm I had never heard of and one was bought by the then Queen’s mother. That store over the season sold another 200. The problem is brands get too Billy big boots. A store local to me sold a lad’s brand for over 20 years it had a real loyal following as did the store. New CEO (former accountant) on behalf of new owners comes in. All stores must order minimum of ￡50k per season. The owner had to explain to his customers, Lads, they have got too big to serve the likes of me, the new owners are …..( you can guess what he called them). Now all those lads are lost to that brand.

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As for mantra’s they do count. In 2009 I was in a meeting with probably the largest UK retail brand and the head of international said (speaking of the owner) “we must not be seen to fail in new markets”. He said it very powerfully, hence I called it a mantra. Earlier that year I was with a large Swedish brand in Stockholm and a clear mantra came across “we always look at the best way to succeed in new markets and it is usually with a good local distributor/ operator”. Looking back the UK brand has not failed in any markets, but they haven’t really succeeded either. They are there. The Swedish brand is constantly expanding in the markets it is in.

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I have lived in Sweden and always admired their international approach. My opinion is this and it is in reference to small country populations v large, not a pop at the U.S. or bigging up Sweden. U.S. brands can grow into a massive business without ever leaving their shores. They don’t HAVE to go overseas. When many do they look at new markets and say to potential partners, this is how we do it and you will do it the same way. With Sweden, they know they HAVE to go abroad, and their approach is, as above how can we do this. In fashion, with partners/ agents/ distributors they work with them and help them in a less demanding more flexible way.

Another thought I have considered and would love to hear feedback if anyone is doing it, or more important wants to. Simply put, why don’t big retail brands work together more. I will keep this short, but for example if Brand A ( a French retail women’s brand with 300 stores and can’t grow the brand much more domestically), Brand B ( an Australian fast retail with 400 stores and can’t grow much more domestically). Both brands look overseas for growth but if they accommodated each other in their relative markets they could probably do a better job, less risk in their familiar market. So, for example imagine a brand like Ted Baker opening G2000 stores here, small steps to start of course and then G2000 opening Ted Baker stores there. (and don’t go on about margins etc please. Be positive).

One of my current clients is Unilever. They have some really cool new fabric care brands coming to market that will sell better among lifestyle and fashion than on a supermarket/ food store shelf. Even they are looking at new channels. Some big retailers are struggling so I hope to hear from at least a few who want to consider wholesale channels.

Major department stores are not really in the business of establishing new brands, unknown in their market but there are always some very good, sometimes edgy and cool or just a new kid on the block, online or offline store that could stock your fashion were it reasonably available wholesale.

To finish I am reminded of when I spoke to China’s largest sports training shoe brand about 6 years ago. They boasted 4000 stores I think and world’s 5th largest trainer brand at the time. They wanted me to get them a European distributor, but minimum order first season must be $500,000.00 USD. It was a really good brand and I advised them, why don’t you open a small store in Carnaby Street or get?quality agents and come in as a premium brand, showing only your best and watch a great brand grow from there. Today I still haven’t seen the brand anywhere in Europe.

Wholesale is still a tool. It allows for small steps.

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Thank you for reading and do get in touch if your brand wants to discuss new markets and/ or wholesale.

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Kind regards and Thank you

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Stephen Laundy

I am easily contact through: https://www.fashioncompass.co.uk ?