MEXICO CITY — Mexican designer brand Lorena Saravia could open as many as 200 doors by 2017 following a $2 million injection from a private investment fund aimed at taking the up-and-coming label to the international arena.
LS hopes to open its first flagship in Mexico City’s high-end Polanco quarter in October to expand its franchise to nine points of sale. The label sells in Saks Fifth Avenue and eight stores across Mexico and the U.S.
“Our goal is to have 60 points of sale in Mexico and 40 internationally this year,” the brand’s 30-year-old namesake founder said. “Then the plan is to open 60 POS a year [between both markets], depending on how sales go and market conditions.”
In coming weeks, LS hopes to approach Bloomingdale’s to boost its toehold in the U.S., where it is scouting for locations in New York, Los Angeles, Miami and Tucson, Ariz. So far, the label is present in three units in Los Angeles and Miami. Saravia is also hoping to launch in Paris this fall. In the medium term, she hopes to be present in major European markets and in Japan and China.
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The three-year strategy is a bold undertaking for a Mexican designer in a country where most peers are struggling to obtain financing to pursue large-scale expansion.
Saravia noted procuring the funds was not easy. “It took eight months of negotiations, but it’s a very good deal and I am very happy with it,” she said of Ventura Private Capital’s $2 million seed investment.
Ventura’s commitment followed Saravia’s win of Vogue’s Who’s Next contest in June 2013 and an enthusiastic reception at Mercedes-Benz Fashion Week Mexico’s latest spring edition.
“Lorena has an incredible drive and is very clear about what she wants and where she is going; she caused a great impression with our partners,” Ventura partner Christian Papayanopulos said in explaining the deal’s rationale. “The brand has a lot of very good press and recognition. We wanted to give it working capital to allow it to grow faster and open 100 POS in 12 months.”
Papayanopulos would not reveal Ventura’s stake, but noted the funds will be disbursed upon LS meeting certain financial and performance goals. He noted Ventura made a long-term commitment and may invest more in the company in the future.
Saravia has plans to launch a capsule collection in Liverpool, Mexico’s largest department-store chain, in October and is negotiating to enter its luxury rival El Palacio de Hierro as soon as this fall. The Liverpool deal could give LS an additional 17 POS, while entering El Palacio de Hierro should add some more, depending on the deal’s terms, she said.
Saravia conceded the next few months “are going to be very busy” with plans to open a 1,380-square-foot flagship on Polanco’s Masaryk high street and high-profile meetings with new customers in Mexico, the U.S. and Europe.
Saravia will also work to strengthen her competitive edge. So far, she has carved a niche by selling three lines of clothing to fit every woman’s wardrobe: high couture, ready-to-wear and basics selling from $50 to $1,000. They can all be mixed and matched to provide the right fit for any occasion, a “4×4 characteristic” unique to the brand, according to Saravia.
“I want my customers to be able to wear my clothes the whole year and for every occasion,” she explained. “My customers can mix fast fashion with high fashion by wearing an H&M skirt with an LS jacket, or they can use one of my dresses for a wedding or work meeting.”
This versatility is part of the brand’s DNA — and commercial advantage — setting LS apart from other Mexican designers focused on making short runs for catwalks or celebrities.
“I am really focused on the business part of things, in making wearable clothes in large volumes, in making something uniquely Mexican that can compete with international brands,” Saravia said.
That philosophy was on the money for Ventura, which is keen to deepen its presence in Mexico’s growing fashion and retail industry.
“Mexico has high demand for fashion from a growing middle class,” Papayanopulos said. “While many international brands have arrived in recent years, there is still a big space for brands that are uniquely valuable and Mexican at the same time.”
Saravia’s investment could pave the way for other Mexican designers to obtain funding at a time when the country is engaged in a major effort to internationalize its fashion industry, though experts claim more government and institutional help is needed to make that happen.
Another designer, Alejandra Quesada, procured funding from retail and fashion franchiser Grupo Axo last summer. Quesada, who markets her clothes in Japan, is also hoping to roll out her first Mexico City flagship in six to 12 months.