MAGIC Trip Report: Kathleen pt.3
Continuing from parts one and two, in this portion I’ll cover the three seminars I attended. One was How to start a clothing line, Understanding, exploiting and protecting your Intellectual Property rights in the fashion industry, and lastly, Organic Sourcing.
How to start a clothing line from Mercedes Gonzales was a different perspective on manufacturing; different because her background is in retail. In many respects, it was as though Miracle was doing the presentation because she’s said the same things many times here. Other things I’ve said as well but Mercedes has her own spin (funny too) and she was a lively and vivacious speaker. Speaking of speakers, my word, some of the presenters were awful. They should sign up with Toastmasters. Some were so bad (the attorneys -save one- and the green contingent) they inspired me to join Toastmasters in the interests of personal growth.
Mercedes opened it up by saying you have to decide whether you want to be rich or famous, you can’t be both, and she recited a list of famous designers (currently popular) who’ve all filed for bankruptcy. While this isn’t always true and not everyone wants to be rich, settling for nicely profitable, she made her point. She said you need three basic things, who you’re selling to, an operational plan and know why anyone should buy your line. She said you have to know who your line will hang with. She says that if a designer describes her line as so unique or unusual that it doesn’t compare to another line (I’ve heard this many times!), that she knows its unsaleable. And she’s right.
With regard to retailers and the market is where our philosophies diverged. Coming from retail, she’s all about creating brands and I totally understand why -I get it- but many DEs don’t want to be a brand, they’re inspired by product development, not brand development. She brought up some good points, look at the market, who’s selling the most stuff? Mass merchants sell the most (62%), followed by discounters (17%), then department stores (12%). Accordingly, since the numbers are there, that’s her focus. She also brought up the whole sizing thing which we’ve talked about plenty here. 58% of the market is plus sized, another 24% are obese and then, there’s the aging baby boomer market with pending anthropometric changes (my words, not hers) and very few producers are focusing on these market targets. Her argument is that if you want to make money, target accordingly. Not everyone is skinny and buys from boutiques. Another thing she mentioned was internet sales. It’s a total no-no to undercut your wholesale accounts by discounting your own stuff on your website. Miracle has said that till she’s blue in the face.
We also diverged when it came to product development and operations. Basically, again from a retail perspective, she says to get the trend reports for silhouettes, colors etc. Operations was relegated to finding an off shore contractor to do it for you. Operations was the weakest portion of her presentation, an example was telling people to grade their patterns before market. By the way, we traded materials. I gave her a book and got the slides of her presentation in exchange so I’m sure she’ll improve her seminar (and I can only hope she’ll tell her audiences about the book). Still, much of our advice was similar. I was heartened to hear her say to start with a small focused line with two or three good bodies and a signature piece, something you’re known for. I was also glad she reiterated to limit your fabric choices and colorways (really, some of you go overboard) and not to worry about minimums (as much as you do).
Other things she mentioned -that again, Miracle has said before but it’s good to hear another authority say it- was the whole issue of fulfillment and warehousing, the organizing and professionalizing of the mechanics of filling orders. She also mentioned that too few of you understand retail math and she’s got a point. To sell to stores, you must understand their constraints like mark up, sales to stock ratio, sales per square foot (how is your product merchandised), turnover etc. I was disappointed though that she tossed in returns at the end of the selling season as a cost you must absorb. This is untrue although retailers wish it were. She also recommends you support your stores, working the floor if you can; customers love that. She stressed providing your reps with all the tools they need, all the paper work stuff, line sheets and what not. It’s amazing how many designers expect reps to do that. That is an unreasonable expectation. All in all, other than the operational portion, this was a good seminar, sure to be an eye opener to starry eyed hopefuls. I think Mercedes would be a good person to consult with if you have the means. You can find out more on her website.
The next seminar I attended was Understanding, exploiting and protecting your intellectual property rights in the fashion industry put on by a whole passle of lawyers (Baker Hostetler). Boy, except for one woman who was a real pistol, these were not good speakers and their slides (not the pistol’s) were boring too. Since they’re representing 10 of the companies in the top 25 of the Fortune 500, you’d think they’d hire a consultant to advise them in these matters :). Also, I missed the last speaker Celine so I don’t know about the quality of her presentation.
They covered the basics of utility patents (most of you don’t qualify), design patents, trade secrets, trademarks, copyrights and the like. Again, this was hopefully eye opening to attendees. Unfortunately, I (personally) don’t think they stressed or differentiated the sorts of protections that are your best bet. They did discuss lesser known concepts you should know, specifically indemnities. You’ll need a lawyer for that. Big box outfits will want you to sign agreements that you haven’t stepped on someone else’s property rights. The discussion of hiring graphic artists and designers was very educational. Apparently, unlike the production side of manufacturing such as with patterns, you must get a work for hire agreement or it is assumed the artist owns the work. Somehow, that seems bogus to me. You pay somebody to do some work for you and you don’t own it automatically? What a rip off. I’d never be so arrogant to presume I owned a client’s pattern after they paid me to make it for them. No wonder designers these days are so paper happy.
The discussion of licensing was interesting but not detailed enough with respect to the ways that I know DEs to be interested, in other words, whether you can even get someone to license your product (extremely rare); what would be the circumstances under which another party would be motivated to take you on. Another thing they didn’t mention is that you really have to be specific with regard to products licensed in your name or you could end up with some really shoddy, poor quality goods that degrade your image in the marketplace. They did however mention ten critical elements that must be included in a licensing agreement.
[edited, errata from McDonald] The portion of the seminar on counterfeiting was a pleasure. The speaker was Heather McDonald, a real dynamo; she was very passionate about the whole issue of counterfeiting and who it really hurts. And no, it’s not just you. Still, she didn’t mention that it is highly unlikely that you’ll be counterfeited. You have to have a name worth stealing first, which is not to say people won’t copy your products but counterfeiting means subverting more than your products but your trademark as well. If you’re an unknown, your trademark or label is not a temptation to consumers who’d be tempted to buy the fake goods. She says “the standard for defining something as a counterfeit is if it is identical to or substantially indistinguishable from the genuine trademark”. However, with counterfeiting (as opposed to being knocked off; I wish they’d talked more about that too), you have more legal backing. For example, if you pay a $190 fee, you can register for the US customs trademark recordation program. Customs will put you in a database they’ll access when inspecting goods coming into the country. If you register, there’s greater likelihood that counterfeit goods will be seized when they come into port -although this is never a complete solution. Heather says that some companies hire private investigators and others that shop “the markets” presumably where those sorts of goods are sold.
By the way, another great resource for this topic is a blog called Counterfeit Chic written by Susan Scafidi, a law professor specializing in fashion IP. She was supposed to write an article for us a loooong time ago. Maybe it’s time to nag her again. I could contact Baker Hostetler but I doubt they’d take my calls. Nearly everyone ignores me. Or rather, I just like to complain that they do.
Organic sourcing the supply chain was the last seminar and (God, don’t strike me dead for saying so) the most disappointing and the presenters also need to do the whole Toastmasters thing, like those lawyers I mentioned. On hand was Parkdale Mills, Patagonia, the Vermont Organic Fiber Company and Anne Gillespie who spoke about labeling organic textile products. I should qualify “disappointing”. Mostly I was disappointed (and I suspect much of the audience was as well) because the topics covered were not how to source organic goods. No no. It was how to source your supply chain if you were a mill or fabric producer. I mean, of course, as the manufacturer, you need to backtrack through the chain as well -transparency is the key- but if you were looking for fabrics, you weren’t going to find it here. Another thing was, they stuck strictly to organic cotton and wools, no mention of other goods was made at all and I know that Bamboosa for one is producing organic bamboo. Judging from the responses from the audience, I think their next seminars should be more focused on sustainability. People were interested in a wide variety of goods. Similarly, I think a sustainability seminar would be more appropriate because far too many producers do not understand the environmental load of processing! All anybody is thinking about is organic this, organic that but they’re not considering the toxic contribution of their dyeing, washing, sanding and garment processing. It serves little purpose to do the whole organically grown thing and then have a dye lot muck it up with a huge fish kill. Just my opinion of course. I have to give them credit for sticking to the topic because their seminar definitely was sourcing your organic supply chain but it was of little value, considering what people wanted and needed.