Restyling the old patterns
Last month Ben Sherman, the British fashion brand beloved by 1960s Mods and endorsed by Liam Gallagher, was sold for ￡80m to the American giant Oxford Industries, which produces clothes for the Tommy Hilfiger and Nautica labels.Ben Sherman was rescued from receivership in 1993 by a management team backed by 3i and Irish venture capitalist firm Enterprise Equity. The Oxford deal netted Enterprise ￡11.6m profit - the most successful return on any of its investment in its 17 years. Yet it is the only clothing brand Enterprise has backed.”Fashion is too dangerous,” says Bob McGowan-Smyth, Enterprise’s chief executive. “Ben Sherman was a quality brand based on solid foundations and it had three top-quality managers in place. You cannot afford just to be flavour of the week which is what ‘fashion’ is seen to be.”Bluntly, the notion that the fashion sector represents an unpalatable investment risk is the single biggest obstacle between fashion businesses in need of capital and investors who could provide it.Keith Benson, a fashion industry veteran, now working for the DTI Business Link’s Access to Finance initiative, says: “The fashion sector has a lousy reputation for attracting private investors of any sort. Few angels are willing to even invest the ￡15,000 to ￡30,000 required by a fledgling designer.”So what are the issues that fashion entrepreneurs need to address to close the culture gap with the City and/or other investors?First is the quality of management. This applies as much to designers straight out of college as to companies with years trading in an industry traditionally built around owner-managers. “Fashion is unlike other industries - the road map is less clear,” says Karen Frank, who is eyeing UK fashion brands on behalf of private equity investors. “Often strong management is missing, even when a company gets to have ￡15m turnover. Or companies do not have a growth plan in place before they set out.”Suran Goonatilake, entrepreneur-in-residence at The London Development Agency-financed Centre For Fashion Enterprise, says: “The failure is usually on the management side, which is easy to remedy by training.”Second, there is the appropriate source of funding. Benson says: “The first port of call is the banks, but they are completely risk-averse. Generally, they are not even interested in the DTI’s own small firms loans guarantee scheme, when it comes to fashion.”Friends and family, and successful industry names who have subsequently become angel investors are other obvious early resorts. However, this is considerably easier for serial entrepreneurs who already have a reputation and a network of contacts. The more ambitious, or those with some record of trading, might be tempted to approach smaller private equity and venture capital groups. But it will not be an easy sell.Even the venture capital group 3i, which has stakes in more than 1,800 businesses, has less than half-a-dozen fashion investments. Patrick Sheehan, managing director of technology at 3i, says: “When we’re looking at a company starting up it is a very risky proposition. So there has to be a large opportunity for us, but also we have to understand why that large opportunity exists.”To underline the low-risk approach, when 3i co-led the ￡72.6m buy-out of Swedish concern Gant a year ago, 3i cited Gant’s “strong brand proposition based on a stable design concept and low fashion risk” as factors.Hugh Lenon, managing partner of Phoenix Equity Partners, has a different take: “People say that venture capitalists ignore this sector but it could be lack of supply not demand. The number of companies we’ve looked at must now run into three figures. There are a large number of surprisingly small companies that are unprofitable. Others are large and profitable but too expensive. Companies in the middle ground with real potential are few and far between.”There are around 300,000 people employed in the UK clothing and textile industries, producing ￡16.5bn worth of goods annually, of which ￡6bn is exported. Most of the 11,000 companies in this sector are small, with an average size of 25-30 employees.Because of the funding gap between the start-ups and the mid-sized companies, Graham Hitchen, head of Creative London, part of the LDA, has been in discussions with mid-size private equity fund managers. The aim is to knit together the first development seed capital fund for the fashion business.Another LDA-funded business initiative, the London Fashion Forum, has taken a short-term let off Carnaby Street to showcase new designers and manufacturers. Two of these have since struck a deal with House of Fraser. And Nesta, the National Endowment for Science, Technology and the Arts, offers early-stage funding to a cross-section of science, arts and other creative industries.Benson says that of the 30 start-ups he has on his books, only two are in a position to approach a medium-level venture capitalist, hoping to raise ￡120,000 each.The third issue for funding is that fashion businesses are advised to be clear about the integrity of their brands and how they could be grown. Goonatilake says: “Venture capitalists think luxury goods are not good returns. In fact, there can be a 95 per cent margin on good luxury brands.”Timothy Maltin, the entrepreneur who raised private equity to acquire British fashion house Hardy Amies in 2001, says established fashion brands that can be expanded across a range of products can be attractive. “However, a lot of British fashion brands have been created from scratch recently, then spread out too quickly.”Phoenix Equity Partners created Equinox Luxury Holdings to acquire luxury branded businesses, including shoe brand Jimmy Choo. Lenon says: “We look for strong brands that have the ability to grow globally. Brands imply stability and durability. We’re not interested in ‘fashion’ companies.”Overall then, the climate is probably tougher for fashion funding than for other creative sectors. Investment can be raised, but both sides must go into it with clarity.Maltin adds: “Investors in the fashion sector need to take the medium-term view. It needs significant investment - not just money, but time. But with fashion they can at least see a well-made garment and appreciate what they are investing in.”
boydfarrow@hotmail.comThe essentialsExperienced management is your strongest asset Start-ups are probably better off targeting specialist development funds, rather than private equity houses Brand extensions are attractive, but riskyFinal Thought”If they truly believe there’s a market for what they are creating they must work with the financial people or whoever they have to get the product out there. Historically, too many companies fail because the creative and the corporate sides don’t communicate” - Karen Frank, Private equity investor
时尚业得换一件“衣裳”
上个月，深受60年代摩登派钟爱并由利亚姆?加拉格尔(Liam Gallagher)作为代言人的英国时尚品牌本?舍曼(Ben Sherman)，以8000万英镑的价格被美国巨擘牛津工业公司(Oxford Industries)收购，后者为汤米?赫尔弗格(Tommy Hilfiger)和诺蒂卡(Nautica)等品牌生产服装。
1993年，一支由3i和爱尔兰风险投资公司Enterprise Equity支持的管理团队，将本?舍曼从破产管理人手中拯救了出来。这次与牛津公司达成的交易，使Enterprise净赚了1160万英镑，这也是它17年来回报最丰的一项投资。不过，本?舍曼是它惟一支持的服装品牌。
“时尚太危险了，”Enterprise的首席执行官鲍勃?麦高恩-史密斯(Bob McGowan-Smyth)说道，“本?舍曼是一个有着坚实基础的良好品牌，而且它还有三位顶尖的管理者。在商业界，你不能只满足于做当前最受欢迎的人，就像‘时尚’给人留下的印象。”
坦率说来，时尚业代表难以消化的投资风险这种看法，正是横在需要资金的时尚企业与能够提供资金的投资者之间的最大障碍。
基思?本森(Keith Benson)是一位时尚界的老将，他目前就职于英国贸工部(DTI) Business Link的金融资源部，他认为：“时尚界在吸引私人投资方面有种种恶名。很少有天使投资者愿意在初出茅庐的设计师身上投资，哪怕只是区区1.5万到3万英镑。”
而时尚业的企业家们又该注意哪些问题，以缩小与伦敦金融城以及其他投资者之间的文化差距呢？
首先是管理的质量。这不管是对刚从学院毕业的设计师，还是对那些有着多年从业经验的企业都同样适用。传统上，时尚业是由业主管理者建立起来的。“这一行业的发展路线图不像其它行业那么清晰，”为私人股权投资者关注英国时尚品牌的卡伦?弗兰克(Karen Frank)说道，“它们往往缺乏强有力的管理，即便企业的年营业额已经达到1500万英镑。还有一些企业在投产之前根本没有发展计划。”
舒兰?古纳第雷克(Suran Goonatilake)是由伦敦发展局(LDA)资助的时尚企业中心(Centre For Fashion Enterprise)的常驻创业家。她表示：“失败往往源于管理，而这很容易通过培训来弥补。”
其次是合适的资金来源。本森介绍说：“最先的求助对象通常是银行，但银行是完全厌恶风险的。一般来说，只要涉及时尚，银行甚至对DTI的小企业贷款保证方案都不感兴趣。”
亲友以及曾经是业界名人的天使投资者，是另一类明显的早期求助对象。然而，这对那些已经有了一定声望并有一个关系网的多次创业者来说会容易许多。那些更加雄心勃勃或有一些交易经验的设计师，可能希望接触一些更小型的私人股权投资和风险资本集团。但要说服它们投资也不容易。
就算是像3i这样在1800多个企业拥有股份的风险资本集团，也仅投资了寥寥数个时尚项目。3i科技部执行董事帕特里克?希恩(Patrick Sheehan)表示：“当我们审查一个新创办的公司时，这是一件风险很大的事。因此，对我们来说，其中一定要有很大的机会，而且我们还必须明白，为什么有这么大的机会存在。”
为了强调它的低风险策略，一年前，当3i联合其它投资者以7260万英镑收购瑞典品牌Gant时，它援引Gant“建立在稳定的设计理念和低时尚风险基础上的强大品牌”作为因素之一。
Phoenix Equity Partners的执行合伙人休?列农(Hugh Lenon)则有不同的看法：“人们总说风险资本忽视这一行业，但或许缺的是供而不是求。我们接触过的企业肯定已经超过3位数了。有大量令人惊讶的小公司毫无利润可言。而另一些较大的公司虽能盈利却又太贵。真正有潜力的、处于中游的企业少之又少。”
英国大约有30万人受雇于纺织服装业，他们每年生产的商品价值达165亿英镑，其中出口商品占60亿英镑。该行业中的1.1万家企业中，大多数企业的平均规模在25至30名员工左右。
鉴于新创办的企业与中型企业之间在融资方面的差距，LDA旗下的“创意伦敦”(Creative London)负责人格雷厄姆?希钦(Graham Hitchen)与一些中型私人股权基金管理人讨论了这个问题。其目的是筹措第一个面向时尚业的发展种子资本基金。
由LDA资助的另一个商业项目“伦敦时尚论坛”(London Fashion Forum)，在伦敦卡纳比街展示新设计师与制造商。其中有两位已经与弗雷泽商行(House of Fraser)达成了交易。而英国科学技术与艺术基金会(Nesta)则向各种科学、艺术及其它创意行业的项目提供早期阶段的资助。
本森表示，在他接手帮助的30家新企业中，只有两家能与中等规模的风险资本家接触，每家有望筹措到12万英镑。
第三个问题是，建议时尚企业清楚其品牌的完好性以及如何发展这些品牌。古纳第雷克表示：“风险资本家们认为奢侈品的回报不高。事实上，好的奢侈品品牌可以达到95%的利润率。”
蒂莫西?马尔丁(Timothy Maltin)曾于2001年以私人股权收购英国时尚企业赫迪?雅曼(Hardy Amies)。他表示，那些已经建立起来的时尚品牌，如果能够将产品系列扩充到其他领域，可能是具有吸引力的。“然而，最近许多英国时尚品牌是从头开始创建的，随后又扩张地太快了。”
Phoenix Equity Partners设立了Equinox Luxury Holdings以收购奢侈品企业，其中包括皮鞋品牌Jimmy Choo。列农表示：“我们寻求强大的、有能力在全球发展的品牌。品牌意味着稳定和持久。我们对那些‘时尚’公司不感兴趣。”
从总体上看，时尚业的融资难度很可能要大于其它创意行业。投资还是可以获得，但双方在开展合作之前都必须明确相关事项。
马尔丁补充说：“时尚业的投资者，需要有一个中期的眼光。这一行业需要大量投资，这不仅仅是钱，更是时间。但无论如何，投资者们步入时尚界，至少可以看到一件做工考究的上衣，欣赏自己的投资成果。”
