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Apparel industry seeking new business strategies
24
Oct '09
Apparel companies, still feeling the effects of constrained capital, are seeking new business strategies to help them prepare for success in a changing economy , said Bibby Financial Services which specializes in providing accounts receivable and purchase order financing to small and medium-sized businesses, including those in the apparel industry.

"Apparel companies must still get their clothing and shoes manufactured and distributed to the stores," Bibby Financial Services Managing Director Nick Hart said. "Given limited access to capital in today's bumpy economy, we are working with a number of apparel companies to help them find viable options to keep their firms growing."

A major trend, Hart said is for designers to license production of their goods to other companies.

"That shifts the cost of production to the licensee. The brand might be created by a highly visible designer or performer, so personal reputation is at stake," Hart explained. "Designers like this arrangement during times of reduced liquidity because it allows them to concentrate on the design and brand management without spending time on financing and manufacturing issues."

Despite the still precarious economic environment, a second trend in the apparel industry is the burst of many new start-up companies in the fashion world.

"Designers are leaving existing houses to start their own businesses," Hart explained. "Business disruption always creates lots of opportunity and that's what we are seeing. It used to be that start- up companies would use home equity lines or credit cards to finance their businesses. Now they have a variety of flexible and excellent financing products, including purchase order financing which can be provided when there are confirmed orders for merchandise."

A third trend is a slowdown in payment from overseas distributors, further reducing liquidity in the system.

"Because of our global presence we can work with distributors in different parts of the world, bridging those cash flow gaps to keep sales moving and ensuring payment. Additionally, as an approved lender with the Export- Import Bank, we can guarantee U. S. manufacturers that they will get paid," Hart added.

Bibby Financial Services is a worldwide market leading specialist of business cash flow solutions to small and medium-sized enterprises. With offices in 10 North American cities and 27 countries around the world, its product portfolio includes receivables finance, factoring, export finance, purchase order finance, specialist solutions for the staffing and trucking sectors, and is an approved lender for the Export-Import Bank's working capital guaranty delegated authority program. Bibby Financial Services is a subsidiary of The Bibby Line Group, a 202 year-old privately held company based in the United Kingdom.

Bibby Financial Services

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