How the fashion retail business works? Trade the shirt off your back to hang your shirt in a store

Yesterday evening, I stumbled on a fascinating post on the ‘Style Cravings’ blog. It featured captured tweets of popular blogger/photographer Terence Sambo of ‘Onenigerianboy’ fame, expressing his complete irritation of how L’Espace, a clothing retail store, currently run their retailing business. Terence’s sister and her fashion line, Wana Sambo Clothings had prompted the tweets.  The blogger also posted the tweeted responses from L’Espace, and there is also an official statement.

I decided to touch on a very critical and important angle of fashion: marketing. Before I share my views, let me first brief you about the retail company, L’Espace. It is a retailing store situated off Karimu Ikotun St in Victoria Island, Lagos. According to an agent, the store, which sits on 670sqm, was an expensive acquisition. Like New Look in the UK and Macys and Target in the US, L’Espace offers opportunity to designers to market their products at a cost, i.e. they, for all intents and purposes, “rent”  the right to be in the store. According to L’Espace and from information I have been able to gather, for a designer to have his/her designs in their store, they have to fulfill these terms and conditions:

1. Minimum of six pieces from his/her line

2. N50,000 naira monthly rent
3. N15,000 as monthly service charge (Choose from either a 3 months or 6 months upfront payment option)
4. L’Espace gets 20% weekly on designer’s total sale.

So the bare minimum a designer would pay (for 3 months) is N195,000, plus the 20% sales cut. In my opinion, there is no way a designer will break even with such a deal. In all honesty, I feel that what L’Espace put on the table for designers is just wrong, and may be hostile to young, up and coming fashion labels. Designing is notan  easy job, especially when your ideas are original. You’ve been through sketches, patterns, prototypes, samples, more prototypes, more samples and finally, the finished product. You’ve spent months, maybe even years turning your idea into a real, shelf-ready creation. Then after all that work, the retailers pulls a stunt on you.

I spoke with my cousin Funke who presently works at Macy’s fragrance section (she still owes me about 4 bottles) store in the US. She told me Macy’s mostly buys goods or products in large quantities from manufacturers or directly or through a wholesaler, and then sells smaller quantities to the end-user. I know you’ll come up with, “this is Nigeria”, “it’s an infant company”, “the store is situated on the island”, “Environment is different” “Office space is killing”, “Baba Suwe hasn’t been paid”, blah, blah, blah. Okay! I can defend my point again. I know a business venture’s goal is to maximize profit so as to keep the business alive. But should keeping your business alive mean killing others? The same reason company’s like L’Espace can’t afford to buy products from the manufacturer is the same reason why the manufacturers can’t afford to pay that much.

Let’s take this from another angle. If I design an item and retail it for N20,000 apiece, retailers will include their cut (let’s say 10%), and I still pay monthly charges to them for retailing my products. They however, make 20% of my sales weekly, use my products for fashion shows, music videos and so on. They get paid for that—I don’t receive a penny from that, and might not even be aware of it until I see my designs on Tiwa Savage in a video. Where do you think my fashion line is heading? I’m working for the retailing store all in the name of trying to sell my product.

Please note that I am not against retail stores; they are something the fashion industry really needs. They should not, however, take advantage of the need of the designers/manufacturers. Nothing fashionable about that.

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One comment

  1. This was a great and informative piece. Honestly the rent in Lagos is way to expensive for people to really thrive in the retail industry. I believe the only way it can work for now is a moving truck which some people in the US have done. Also a weekly to monthly exhibit of the items. This way people do not have to worry about the overhead in electricity and rent. Hopefully soon someone will get the right formula I just believe LESPACE missed the mark.

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