Money Honies

London's designers are increasingly business-minded.

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London’s designers are increasingly business-minded.

This story first appeared in the February 5, 2008 issue of WWD.  Subscribe Today.

For the past few seasons, Danielle Scutt, a 2005 Central Saint Martins graduate, has been getting the sort of press attention that only exists in young designers’ fantasies. Since her first show, as part of Fashion East, she’s been the talk of London, and her bright, sexy, in-your-face clothing has been featured in titles including British and American Vogue, The New York Times Magazine, Pop, Dazed and Confused, i-D and W, WWD’s sister publication. Kirsten Dunst, who wore one of Scutt’s swimsuits for a fashion shoot, liked it so much she asked to take it home.

Instead of basking in the attention, however, Scutt is retreating from the London catwalk this season. Her reason is simple: She has to make money.

Despite her impressive media profile, the 26-year-old Scutt has just one wholesale account — the Shop at Bluebird in London’s Chelsea. So, this season, instead of staging a runway show, she’s opted to create a catalogue of her fall collection for buyers and the press.

“I want to create a collection that’s really good quality and wearable, whereas everything before was quite hard-core,” she said, referring to the ultratight, high-waisted jeans, Lycra spandex body stockings and peekaboo swimsuits with one breast exposed. She also wants to play catch-up with her media profile.

“When you have a lot of expensive press coverage, people get the impression that your business is bigger than it is,” she said.

Scutt is one of many London designers who are focusing increasingly on their businesses. And while they may still love media attention, designers know being on the cover of Pop or starring in the latest i-D spread doesn’t pay for the staff, the studio or the raw materials.

“These designers have seen others get hyped, and they realize they don’t want that,” said Yasmin Sewell, the former buying director at Browns, who has recently set up her own fashion and retail consultancy. “They want the right stockists, and the key department store. They don’t want to be in every magazine — and not hitting their sales targets.”

Richard Nicoll is one of them.

“These are less indulgent times. I think London fashion has moved from being conceptual to being real,” he said. “And if you want to survive, you have to play the game.”

For Nicoll, that means stretching himself beyond the catwalk. For fall, the designer known for his shirts and blouses has designed a separate line of all-white numbers especially for his wholesale clients, which include Barneys, Opening Ceremony, Browns Focus, Galleries Lafayette and Liberty. He’s also consulting for Thomas Pink, designing a range of women’s blouses for the British brand, and creating a capsule collection for Topshop.

Giles Deacon had business on the brain from the start.

“We’ve always been very aware of where we wanted to be pitched, and that the line wasn’t going to be purely London-centric. We wanted universal appeal, and we wanted to sell in America,” he said.

Deacon is one of the more established businesses in London, and is still looking to grow. He’s set to launch his first leather accessories range in September, and will unveil a small men’s collection next year. In addition, Deacon feeds his business with creative consultancies at New Look and DAKS and, as reported, is in talks with Diego Della Valle about consulting for his Fay brand.

However diligent these designers may be, they’re often handicapped by living and working in London. British labor and manufacturing costs are among the highest in Europe, and London — where many designers still produce their clothing — is one of the most expensive cities in the world. Erin Mullaney, designer wear buyer at Selfridges, said British designers are fighting battles on so many fronts. “It’s almost the end of January and I haven’t had a single delivery through yet. For many British designers, it is a constant struggle with cash flow,” she said, pointing to one designer who was forced to cancel a pre-collection at the last minute because of cash flow problems. “Also, designers like to control their production, so they make their collections in London, which is hugely expensive. It makes me sad. Maybe there is some way for factories to support them,” she said.

Erdem Moralioglu, who works in Hackney in East London, said one of his biggest challenges is overhead.

“Rent is expensive — even paying transport costs for the interns is expensive,” he said. “But it’s really exciting in Hackney, and I need to be here for the collection.”

Another challenge designers are facing is the strong pound, especially compared with the dollar. Julie Gilhart, senior vice president and fashion director for Barneys New York, said in December, “We’re in a period now where there is really good, interesting design talent coming out of London. But the new, emerging designers have become prohibitively expensive because of the exchange rates. It’s a perplexing problem: On one hand, we want to support and nurture young talent, and on the other, pricing is so out of whack,” she said.

But there is help from industry bodies, which are also becoming increasingly business-minded.

“We want these designers to build sustainable businesses,” said Hilary Riva, chief executive officer of the British Fashion Council, which owns and organizes London Fashion Week. “We’re not just about showcasing designers’ art. We are living in a commercial world, and we need to understand their business needs and plans,” she added. Riva pointed to two schemes supported by the BFC: New Generation, which is sponsored by Topshop, and Fashion Forward, sponsored by Westfield. Both provide financial support to designers at various stages in their careers. Riva said the BFC is now putting in place extra business guidance schemes to help the winners of both programs.

In addition, there is the BFC’s annual Fashion Enterprise Award, sponsored by Swarovski. The $100,000 prize recognizes winners’ business strategies and savvy, and provides further mentoring for them. Erdem was the winner in 2007. Beyond the BFC, there is also the annual Fashion Fringe competition founded by Colin McDowell, which provides winners with a grant to produce collections, access to technical staff and studio space at the London College of Fashion, and the chance to sell their designs on Net-a-Porter.com. The Center for Fashion Enterprise, based at the London College of Fashion, also provides funds, public relations, marketing, sales and business support to designers who have graduated from fashion college and have shown for three seasons. Scutt is currently receiving mentoring and help with her look book from the CFE.

“There is so much sponsorship and financial support in London right now,” said Nicoll, a winner of the latest Fashion Forward sponsorship. “It is a very nurturing city for young talent.”

And while London is most famous for its youth culture, the city is also filled with older, more established designers who are fixtures on the London Fashion Week schedule. The likes of Betty Jackson, Jasper Conran and Allegra Hicks may not always grab headlines or generate miles of magazine shoots, but they have all built sustainable businesses and are generating cash season after season.

“I was once Gareth Pugh,” said Conran, referring to the edgy media darling who until the spring 2008 season had no wholesale accounts. (Today, Pugh is stocked at Browns Focus, Colette, Maxfield and Barneys.) “But I woke up and built a business. It’s not very romantic, but I had to be commercial. That’s how you pay your staff,” said Conran, who has been in the business more than 20 years. All the products bearing his name — including his men’s, women’s and bridal lines, home collections, fragrance and jewelry — generate $900 million each year at retail.

Jackson, who’s been in business since 1981 and whose annual revenue is about $8 million, said “business” isn’t a bad word.

“You want to put your stamp on the world, but you still need to produce a skirt that people will buy,” she said. “People equate commercialism with dull and boring. But at the New York shows, if people like a collection, they’ll spend money on it.”

Pia Hahn Marocco, ceo at Allegra Hicks, also knows about balancing art and commerce. “We have fashion journalists who make tons of personal orders but who never write about us. Then again, we’re not trendsetting. Our dresses are meant to be pieces you can wear year-on-year,” she said. Hicks’ business, like Jackson’s, is small — under $10 million — but has been growing by 40 percent annually. In addition, the company has stand-alone stores in London and New York and is currently scouting space in L.A. “In London, is commercial a bad word? An insult? I think it’s a good thing.”

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