NEW YORK — Andrew H. Tananbaum, president and chief executive officer of Capital Business Credit, has always focused on forging entrepreneurial relationships, whether overseas or here in the U.S.
Tananbaum was appointed ceo of Capital by Perry Capital when he and Perry acquired the firm from Region’s Financial Corp. in 2005. He started his professional career as a lawyer at a big firm, but quickly found a niche in the emerging market finance business. He joined Century Factors when it was a family-run public company, and then took it private in 1987. When he sold the company to Wells Fargo, which became Wells Fargo Century in 1999, he said it was the seventh-largest factoring company in the industry with a deep focus on trade-related importers.
Capital is the fourth-largest factoring firm in the industry, Tananbaum said. He sat down with WWD to discuss his entrepreneurial take on factoring.
WWD: What is Capital’s typical customer profile?
Andrew H. Tananbaum: My emphasis has historically been on identifying growth opportunities — companies that are undercapitalized, but have a higher probability of growth and that require more entrepreneurial support as they build out their businesses….Most of our clients are importers. We’re also seeing that more of our client base is derived or arises out of the vendor or supplier side of the equation as they move into the United States to sell their products directly to the retailer. That’s why we opened a Hong Kong office in 2006.
WWD: What criteria do you look at when you’re evaluating a company to be a potential client?
A.H.T.: I feel very strongly that you need to look at the experience of the management, how they handled themselves in their business, how hands-on they are about their business. Because we finance a lot of importers, it’s really important for us to know about their competency in sourcing and buying and all of the other aspects of the business that can drive their margins.
WWD: What trends will the apparel industry face in 2007?
A.H.T.: One obvious trend is that, with the various acquisitions of trademarks by brand management companies, like Iconix, there is a premium placed on product-bearing brands. I also see companies, like Li & Fung, which are acquiring importers and distribution companies to gain greater penetration into the distribution of product and trying to possibly disintermediate some of the traditional importers.
WWD: How can a factor help companies face these trends/challenges?
A.H.T.: I think the question is different: There was a special business relationship between the factor and their clients. That relationship between the factor and the entrepreneur in the apparel business was one based on trust, quick decisions and deep knowledge about the client’s business, [as well as] the ability to support them in a way bank-owned finance companies aren’t prepared to support their clients. It’s not their business to be entrepreneurial.
WWD: How is Capital different?
A.H.T.: Entrepreneurship. Essentially, we believe we are filling a need for a return to providing entrepreneurial capital. That was consistent with what my reputation was at Century. People can call me up and not be surprised that I’m engaged and hands-on. With all of our experience in the business, whether in New York, Charlotte [N.C.], Hong Kong or Los Angeles, we’ve been there and done that. We are able to find solutions for our clients and create and support opportunities, while also being thoughtful and consultative. Capital can be proactive, as opposed to being reactive, and hopefully catch opportunities and bring prospective issues to the attention of clients earlier rather than later.