Entrepreneurial spirits were buzzing on a high amongst guests at a recent networking event, where Kathryn and I went to hear Neal Ghandi‘s inspiring talk about the entrepreneurial strengths of the moment. It was a refreshing contrast to the resounding phrases of “Credit Crunch” and “Banking Crisis,” putting a positive spin on the economy.
My next day unfortunately unravelled in stark contrast to the positive message of possible economic recovery.
My main fabric supplier was being extremely slow responding and I felt like I was flogging a dead donkey. Little did I know that that was literally what I was doing, as they had gone into administration without telling any of their clients. Thankfully, I had managed to secure existing stock meaning that my next season is secure, but I am having to look elsewhere for the future.
My factory who I am close to and who are a godsend, tell me that orders have consistently fallen and that they have needed to keep a very slim and slick operation to survive over the last 4 years. Obviously, China has been the cause for most of the European factories and fabric mills to close down, but the diminished retail environment in Europe has not helped.
I interviewed a fashion sales showroom, who had anticipated higher sales for the next season as shops gain confidence and need to top up their lower spends in the previous seasons. Retrospectively, the shops did place orders, as people still shop in a recession, but surprisingly with great aversion to higher priced products, which prior to Christmas they couldn’t re-order fast enough. Showing that 2010 marked the start of consumers finally adjusting their spending habits in line with the economic climate.
Furthermore, shops have been very slow to pay their suppliers, more so than in the past, added to which they are burdened with upward only moving existing high rents – showing that we’re all just hanging-on in there.
This leads me to conclude that if there are entrepreneurial opportunities in the retail arena then these need to cater to the price conscious customer, offering value for money and a product that beats the competition. In my view the luxury sector is going to struggle, and we are going to see the closure of many independent fashion brands in the next year, leaving a gap for mid market fashion essentials to compliment the high street offering.
Greetings from the Austrian Alps.