How We Grow a Fashion Company: Case 1

Our consultancy dates back to 1986, in Hong Kong. Our first clients were small and medium-size factories, middlemen and importers. Our role was to take them to the next level. However, over time as our projects grew larger, and our clients grew larger, our fees grew larger. By 2010 our client base had become limited to multi billion-dollar companies, government and international institutions. We had reached the point where we could no longer bring our clients to the next level because the small and even companies who needed our help, could no longer afford us.

We had reached the point where we could no longer carry out the work that had been the most interesting and rewarding.

Cynthia was a great example. Her company produced hand-painted silk scarves. I do not mean the ethnic stuff sold to tourists: pearl chasing dragons. Cynthia’s scarves look as if they were taken off the wall of the Impressionist gallery at the Louvre. She was an unbelievably talented designer, a great craftsman, a first-class marketer as well as a very good business person. Cynthia’s only problem was that she was the single employee in the company. She did everything, including the dishes and sweeping the floor. By working seven days a week, 12 hours a day, 365 days a year, Cynthia was able to produce almost 200 scarves a year and could not figure a way out. As you can understand, living and working in Long Island, placed severe limitations on her options. Let’s face it, in Long Island the entire pool consisted of qualified silk painters consisted of one person and that person was already in Cynthia’s organization or more to the point that person was Cynthia’s organization.   

I was introduced to Cynthia by her psychologist. It seems that her inability to move forward finally resulted in a chronic state of depression.

A strategy to Move Cynthia’s company forward was pretty simple. The first step was to locate a place to produce the goods. Hangzhou seemed to be an obvious choice, since Hangzhou has been in the silk painting business for the past 800 years. Hangzhou is also home the best art academy in the country, thus providing an inexhaustible pool of painters.

As you might expect, there were, of course, other technical problems:

• Someone had to supply the silk;
• No one could even estimate the cost until the work was completed;
• A 25% rejection rate would be considered reasonable, and of course, someone would have eat the damaged product.

The solution was basic Hong Kong Chinese. I took a few friends and formed a company. One friend has experience in silk printing and connections in Hangzhou. Two others went along for the ride. After all, in Hong Kong going into business is work than work, it is a vocation. Relatively quickly we worked out a formula, whereby the company took 100% of the production risk and offered Cynthia a fixed price for a 1-meter scarf, FOB New York, with quality guaranteed. Within a year Cynthia was delivering 50-100 pieces of a design.

Cynthia provided the talent, the hard work, and the marketing skills. We just took production. Everybody made money. Everybody won. 

More than ever before, the world is full of talented and committed people. People who have small operating businesses, are working 24 hours a day, but are trapped. They cannot move to the next level.

If I am writing about you, and you want help, contact me.

DAVID BIRNBAUM