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Posts from the ‘Behind The Scenes’ Category

Jun 15

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Full Transparency

We mentioned a while ago that we might be doing this, and here you have it… the completely transparent costs involved in producing a Bento garment.

The t-shirt shown above will be available from Spring/Summer 2011 – 2012 onwards. It is produced in Australia from 100% cotton which is also made in Australia.

As a small clothing label that prides itself on using manufacturers that have all the right paperwork and pay employees fairly in appropriate working conditions, our manufacturing costs are a lot more than, say, a larger company that produces offshore.

Anyway, here are the development costs:

Pattern & toiling – $500.00
Sample fabrics – $50.00
Sampling in 2 colours – $80.00

Total for two samples: $630.00

The sample itself then needs to be photographed and so forth, but we’ll overlook those costs for the moment.

When the t-shirt goes into production, we need to ‘grade’ the original sample pattern to other sizes. Our samples are  a size 2 (8-10), which then needs to be translated into our full size range (1 – 6). The cost of this part varies on the number of pattern pieces for each garment – that is, how fiddly it is. Grading can cost a fortune if you have a large size range (one of the many reasons lots of designers don’t do an extensive size run).

For this t-shirt, it’s about $400.00

The fabric itself isn’t actually terribly expensive (approximately $3.50 per meter). Out of interest, most labels use fabric under $10.00 a meter… ours is usually more like $18.00 – $25.00 a meter. This t-shirt fabric is by FAR the cheapest we use! Average fabric allocation for the t-shirt is 1m.

Manufacturing costs are $25.00 per t-shirt.

Happily, there is no haberdashery on this t-shirt (buttons, zips, etc.) so we “save” money there, but it still has care labels and a swing tag, which account for another $1.50 per t-shirt.

So, each t-shirt costs a grand total of $30.00 to produce. We sell them to stockists for around $40.00 and they sell them to you for around $80.00.

To be clear, we’re making less than $10.00 per t-shirt. Given it cost $1030.00 to just sample and grade the t-shirts, we’d have to sell more than 100 of them to even cover just those costs alone, without paying our team a salary or covering those lookbook costs.

Sure, we could charge more for each t-shirt, but for every $1 we add to our cost, the retail price goes up $2. And really, $80.00 for a t-shirt (even though it’s amazing quality, ethically produced and entirely made in Australia) is really more than enough, don’t you think?

So there you have it. Next time you’re thinking clothing labels must be raking it in, think again.

 

Edited to add: Manufacturing costs do go down as our volumes increase, but it’s a bit of a catch 22 – if we were producing 500 t-shirts we can have them made for as little as $13 each, but we need to be able to fund the production and have orders for that number first.

May 30

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Payment Terms

Since our blog post about non-paying stockists (and a special thanks to Ragtrader for republishing it – we were so thrilled to read all the varied responses), we’ve been talking a lot here at Bento HQ about payment terms. In most cases when you’re dealing with goods, payment terms are pretty straightforward – you want something, you buy it. In fashion, this just isn’t the case.

It isn’t the purpose of this blog to get into a long-winded monologue on the financial culture of the fashion industry in Australia (at least not today). What we want to share is the fiscal reality of a new clothing label and the options as far as payment terms go.

When Bento started in April 2010, the first dollars were shelled out to get things going. At first they were minimal – business registration, patternmaking, etc. Then they got more serious – sampling, photography, fixing the patterns that weren’t right, models, lookbooks, trade shows and so forth. Within six months, we’d outlaid tens of thousands of dollars and production had commenced on the first collection. By the end of the year, we’d also sampled our second collection and photographed that too (goodbye another five-figure sum).

In February 2011 our first collection – Autumn/Winter 2011 was delivered to stores. Some of our stockists chose to make this collection available for preorder and with our support presold more than 50 units at full price, before the items were even available in store.

We have two types of stockists. The vast majority are full-paying (that is, they choose their stock and pay for it and decide how to sell it) and consignment (they only pay for goods retrospectively once the stock sells).

In the first season our full paying stockists were supposed to pay their first instalment on delivery of the collection in February 2011. Several have not. (Even those that presold all those pieces.) The consignment stockist pays us at the beginning of each month for the goods sold the previous month.

Right now, we are producing stock for our second collection (Spring/Summer 2011 – 2012), sampling for our third collection (Autumn/Winter 2012) and chasing payments on our first collection (Autumn/Winter 2011).

The biggest issue with this model is that we have to pay for production and sampling well in advance (9 – 12 months) of getting paid ourselves. Financially, this is obviously quite a burden for a new business.

The options available as far as payment terms go can be roughly split into three categories:

1. Self-funded production. This is what retailers like Scanlan & Theodore do – pay for what they want to make. The advantage that retailers have is that they start getting paid the day the item goes on the shelves, and their profit is approximately 75% of the price on the swingtag. From a wholesale perspective in payment terms this means the label takes the orders from retailers, produces the stock and then seek payment at some stage after production has finished. This means that the full cost of production is worn by the label and as such the risk – if the retailer changes their mind or goes out of business, they have unallocated stock for which they need to find placement, and they’ve outlaid money for the goods.

2. Partially-funded production. This means that the cost of production is at least partially funded by the retailer the goods are being made for. Most wholesale labels make to order, so this means that the retailer pays a deposit up front to cover immediate production costs and then make further payments at agreed intervals. For example – 40% of the order upfront, 30% before delivery, 30% within 30 days of delivery. This means that the retailer and the wholesaler share the risk – the label hasn’t yet made any money (actually, they’ve made a loss – the production costs have been covered, but not the development costs or the mark up).

3. Fully-funded production. We can’t actually imagine an instance in which this would occur (unless the retailer seriously wanted the label), but in this version of events the retailer pays the full amount of their order upfront – both the cost of production AND the mark up. Realistically though, this means the retailer wears all the risk. If the label goes out of business they’re going to struggle to get their money back, and they’ll be short stock for the season.

It’s no big secret that fashion is an incredibly competitive industry. With this in mind, labels are willing to take ever greater risks – that is, fund production of items with absolutely no downpayment. With substantially fewer retailers than labels and a culture of hyper-secrecy, retailers can get away with being extremely lazy with their payments. Conversely, with far fewer suppliers than labels, suppliers can be excruciatingly strict with their payment terms. As a result, the label ends up acting as the bank for the industry.

Without doubt, if a retailer really wants a label they’ll pay the required deposit, or negotiate terms they can afford. If the retailer however feels they’re taking a bit of a risk on the label or they’re somewhat on the fence about their order, why make a deposit when there are ten other hungry labels who don’t want a deposit just itching to take an order?

Naturally, no one wants to be in a ‘good times’ business relationship – a relationship in which there is no flexibility to account for the tough periods. Likewise, every good business should want to work with their best customers to ensure a mutually beneficial relationship. As we enter our third season we now have relationships with suppliers where they are willing to give us a few weeks breathing space to make payment – but of course this is something agreed to upfront. Moreover, we’ve earned that flexibility by paying very promptly in the past.

What is very clear is that this model isn’t sustainable. If the global financial crisis has taught us one thing, it should be that no business is immune to collapse.

Put simply, fashion labels need to toughen the heck up and start operating more like businesses and less like hobbies.

May 17

The Cost Isn’t Just About Dollars…

… or Euro, or Yen, or Renminbi, or Pounds…

I’m sure it won’t surprise any of you to know we’re having trouble with non-paying stockists.

It’s just who I am that I inherently trust people. I believe they’ll do the right thing. I believe that if they place an order and agree to our payment terms, that they’ll pay… and that they’ll make it a priority to pay on time. I also work very hard at building meaningful relationships with our stockists, suppliers and manufacturers.

With this in mind, it absolutely crushes me when we get messed around. I AM this business. I gave up my job to pursue this dream. I’ve had sleepless nights, shed tears, worked crazy hours and made HUGE sacrifices to do this. When someone tries to take advantage of Bento – and by association me – I take it personally.

Originally, I thought it was because I was a new addition to the industry. That people felt they could treat Bento like dirt because we weren’t big enough or important enough to have an adverse impact on them.

This morning however, I happened across this post by Isaac Likes, talking about how a fairly significant talent agency in New Zealand has been fined for not paying talent for jobs they’ve been booked for. (The true irony is that the fine was $10,000 for failing to pay just $258).

This afternoon, I was with one of my manufacturers and we got talking about finances. She mentioned in passing that tomorrow is the VCAT hearing for one of her clients who is a VERY substantial Australian label (trust me, you’ve heard of them). They still haven’t paid her for two seasons ago… nor have they paid their denim manufacturer (whom we also share). Obviously they still have stores open, so they’ve got someone else making their stuff.

Although this won’t surprise many of you, it seems to be a revelation to some – WE ALL NEED EACH OTHER. My stockists actually need me as much as I need them. Ditto our suppliers and manufacturers. Now if such ‘important’ players in the industry can go around messing businesses about, is it any wonder everyone is so distrusting of new folks?

Anyway, that’s not really my point. My point is that, the fashion industry is a small and close-knit place. And anywhere that is small and close-knit is typically gossipy. My manufacturer isn’t shy about telling people who isn’t paying. From now on, I’m going to be asking for trade references, so I hope other people aren’t going to be shy either. (Although sadly the industry seems to be too scared to say anything negative about anyone.)

The bottom line is that the actual $ figure isn’t the only cost associated with not paying someone. Your reputation can easily get damaged and you’ll end up with a bunch of people unwilling to do business with you. Moreover, those involved are likely to remember your actions and you never know where they might end up. (Side note: I had the deep pleasure of removing an agency from consideration on a multi-million dollar project during my bank days due to them completely, consistently and continually failing to deliver on a project I’d managed in a role with a previous organisation that was worth substantially less). To paraphrase an old saying – doing the same thing over and over and expecting a different result is a key sign of insanity. If these businesses can’t manage their finances well enough to pay their bills… well, something needs to change. Because that $ figure on the bottom of the bill won’t be the only thing that they end up paying.

I’ll finish this with one last thought: for those businesses who think it’s OK to mess around with talented, honest businesses like my manufacturer mentioned above… just remember: if they go under because folks like you don’t pay, they won’t have anything left to lose by telling the world and each and every one of their contacts about your poor behaviour. And an angry person with nothing to lose is not someone you want to have upset. Haven’t you SEEN those horror movies?!

May 6

5 Truths About Fashion Week

True to my ongoing promise on this blog, I’m not going to try and be cool about this (turn away now, fashion folk). Allow me to confess: I LOVED GOING TO FASHION WEEK. It’s everything you see in the pictures. Sure, there’s a lot of waiting around, and I saw several rather underwhelming shows, but if you love fashion like I do, you’re permanently surrounded by a swarm of like-minded people… and then there’s the promise that the next show you attend just might be amazing.

Anyway, 5 things I noted about the week that seem rather contrary to what you may have heard…

1. Magazine Folks / Media And Models Are NOT As Stylin’ As You Expect

In fact, they seem to dress more like they would every day than treat fashion week as a good excuse to dress up. But hey, they have a job to do. I’m not suggesting they didn’t look good, I just anticipated more of a spectacle… and I was there for the spectacle. Personally, I regarded fashion week as a damn good excuse to wear whatever the heck I liked. Vintage kimono? Check. Turban? Check. Hilarious fake anime-style eyelashes and drag-queen heels? You betchya.

Having seen pictures of fashion weeks around the world over the years, I suppose it’s fair to say that I was a bit disappointed that the editors of Australian fashion mags hadn’t gone all out, but there were plenty of others that had.

Oh, that said – Meg Gray (Vogue) and Kelly Hume (InStyle) both looked extra sensational every single day I saw them.

2. Fashion Types Aren’t All Super Skinny
They come in all shapes, heights and sizes… just like the rest of the population.

3. Fashion Designers And Media Aren’t All Lovely, Friendly And Down To Earth
This isn’t to say that they’re mean, nasty and snobbish, they’re just no more or less likely to be delightful than anyone else. And like everyone else in the world, if there’s a reason they SHOULD be wonderful to you, they will be.

4. Fashion Shows Don’t Always Run Late Because The Designer Is Being Pedantic Backstage
Perhaps it’s just me that thought this was why they ran late. Mostly they seem to run late because they’re a) using the same venue as someone else and the people before them ran late or b) the key attendees are late so they hold the show and wait for them.

5. The Media Rarely Have Bad Stuff To Say
I overheard staff from several major publications reviewing shows amongst themselves this week, and there were some shows that were clearly pretty blah. I will eat my words what I heard ever sees the light of day as a review, because I bet they will either say nice things or nothing at all.

If there’s anything you’ve been wondering… let me know!

Feb 8

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10 Things You Never Knew About Bento*

*And never thought to ask.

Some useless, but mildly interesting facts about Bento…

  1. Every single Bento item goes from concept to creation within 20 kilometres of our studio.
  2. Speaking of our studio, it’s powered entirely by water energy!
  3. Our studio is also in an old toy factory. It’s nearly 100 years old.
  4. From sketching an idea to delivering it to a store takes about 12 months.
  5. Each item in our AW 2011 (Volume One) collection was named after the child of a friend or family member born the same year as Bento.
  6. It’s our dream to dress Fifi Lapin.
  7. Our head designer (that’s me!) chucked in her job in senior management at a bank to start Bento. We never ever tire of getting emails from people telling us what their dreams are.
  8. We often listen to French radio in the studio, for no reason other than ads sound way more appetising in French.
  9. Our relationship with technology is very love/hate.
  10. Bento’s official birthday is the 1st of April.

C’mon now… tell me you don’t feel enlightened.

Feb 1

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Fabric 101

It’s come to my attention that a lot of people don’t know about fabric. Not really a problem, until they use their fabric “knowledge” to make purchase decisions.

In a store last week, I watched in amusement whilst another customer told her friend she loved the dress she was trying on but wouldn’t pay the amount on the price tag for ‘fabric made from plastic’. Her friend asked what the fabric was, and she replied ‘rayon’. I considered interjecting at this point, but when the sales assistant appeared and concurred that ‘synthetic fabric isn’t worth much because it doesn’t breathe’ I gave it up as a lost cause and left.

So, in the book I’ve written for our stockists I’ve included a section on fabric. Here it is for you, too…

Contrary to popular belief, fabrics do not fall into two categories of “natural” and “synthetic” but rather three – natural, manufactured and synthetic.

Natural fibres are found in nature in fibre form. The four basic natural fibres are silk, wool, cotton and linen. Other examples are cashmere, vicuna and hemp.

Manufactured fibres are made from natural material that requires manipulation to become fibrous. They are made by processing plant cellulose - the very same basic material as cotton and linen. Examples include viscose, rayon, acetate, bamboo, cupro and modal.

Synthetic fibres are created by forcing a liquid chemical through a small hole to produce a continuous strand or filament. Common synthetics are nylon, polyester and acrylic. Many people don’t like the idea of synthetic fibres, but they are great for creating fabrics like tulle.

So there you have it! Try looking at the fabric labels in clothes next time you’re shopping and see if you can tell which category it falls into.

Sep 21

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Location Location

Due to the Christmas / New Year downtime, I’ve decided I’d feel a lot more comfortable about Spring/Summer 2011-2012 if I had it photographed in December. This leaves about six weeks for lookbook design and printing before I start selling (and have a preview / launch party!) in February. Yes, it’s pretty early but whatever. Have you ever regretted being organised?

So… obviously whilst designing the collection, I thought extensively about how it would be photographed. The mood, the look of the models, the makeup, the hair and whatnot. Of course the problem with this is that you get very specific ideas in your head about what you want, which can make them almost impossible to match in real life.

I wanted something light (as in daylight), bright, a little imperfect and beaten up but not grungy. I love the nostalgia and history of warehouses (the bento studio is in a converted toy factory), but whilst I really enjoy the contrast of beauty with old dilapidated factories, that’s not what this collection is about.

It’s a huge relief when you find something that equals or betters your vision. For me, that was Thirty Thirtyone studio in Kensington.

Isn’t she gorgeous?

Current No Project Tally = 2

Aug 18

Behind The Scenes: Meet Julia

I’ve decided to kick off a new category on the blog where I’ll tell you about the people who make up the Bento “team”. They don’t work solely for Bento, but without them it wouldn’t be possible to go on the journey I am. They’re both product and service providers.

Today I’d like to introduce you to Julia. Julia is the owner and founder of The Sample Room. The Sample Room provides services to fashion labels like:

  • patternmaking (turning your sketches and drawings into a commercial pattern that can be used by machinists);
  • grading (making said pattern into different sizes);
  • sample making (a product made in the proper fabrics and whatnot that is used to quote with and photograph).

All designers employ patternmakers, graders and samplers, whether in-house or externally (like Julia). I’ve heard that some people go to patternmakers with pictures out of a magazine or simply a description of what they want. I’d argue that unless you’re at least sketching you can’t claim that you designed the finished product any more than you can claim you cut your own hair merely because you tell your hairdresser what you want. That said, some patternmakers are okay with this, others will simply refuse to do the work.

There are lots of people out there that provide all these services, but I like Julia because it doesn’t bother her that I’m new to the industry. It also appeals to me that, like me, she’s started her own business from scratch. For me, it’s also super handy that she does all these things in one place, because the more places you go to, the more stressful it becomes as there are more cogs in the machine that might break.

Julia has a very shiny background too, having made patterns for all kinds of labels from Portmans to Anthea Crawford.

I’ve found that picking a patternmaker is a lot like choosing a friend or partner. They need to be someone who understands you and really ‘gets’ your style. Someone who comes from a really frivolous patternmaking background like Alannah Hill for example, would struggle containing themselves for the simplicity and structure of Bento.

So far though, I like Julia a lot and I hope that we’ll be together for a long time to come :)

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