Fashion forward

 By Cheranka Mendis

How does one go about setting up their own fashion and design related business catering to and empowering young designers around the world? Ask Stefan Siegel, Founder of the infamous ‘Not Just a Label’ brand which is among the most successful global fashion brands today.

Giving up his job at Merrill Lynch in New York to pursue a dream which was then a new concept for the industry, Siegel today empowers a large number of young designers from around the world based on their creative power, precision and quality. Founding what is known as the biggest cutting-edge fashion platform cum online retail store, he has taken fashion beyond the elite in Paris, New York and Milan to a broader platform easily accessible by all.

“Being a fashion designer or having a brand is about financial management. It is about product development, people management, business planning, marketing and sales skills,” Siegel said addressing a workshop which was organised as a fringe event of the HSBC Colombo Fashion Week held earlier this month. Siegel was invited by the British Council, the knowledge partner for the event.

Forming ‘Not just a label’

“The idea was to create a platform where young designers can simply showcase their collections,” he said.

Working for Merrill Lynch, Siegel was part of a team that was advising some of the major fashion power houses and financial funds behind the brands we know of today. “We could see an indication of the success emerging designers were enjoying. However the problem was that they would use huge brands like Alexander McQueen and Stella McCartney to introduce their work. Also a lot of investors were expressing their willingness to work with young designers but they didn’t know where to find them.”

What Siegel and his brother wanted was to bridge that gap and come up with a trend-scouting platform for fashion designers across geographical boundaries. “We had big plans to become the authority when it comes to fashion designers one day, where thousands of designers will join our platform and we will be able to make money.”

He noted that even though the expectation was to become ‘somebody’ in the industry in 12-14 months, it took them six months alone to get the website started.

Noting that becoming a retailer wasn’t their key priority, what drove them towards online shopping was running out of money in 2009. “We went back to our business plan and pulled out sections where we had listed ideas for the future. Online retailing was among that. It was the only revenue stream we could develop from our own hands without racing finances.”

Travelling to Paris that year for fashion week when recession finally hit the fashion industry leaving many young designers panicking and with buyers from Japan and Korea picking only a selected few shows to attend, Siegel noted the amazing creativity of the designers and thought of creating a one-of-a-kind online shop showcasing a selected few one-off unique designs: “We wanted to see if that kind of luxury works. It took us six months to develop the website and went to fashion celebrities such as Diane Pernet and asked if they could pick 50 pieces from our best designers for us to ship the picked designs to London and sell these items.”

That was the beginning of the success story Siegel enjoys today.

Not giving up

At the beginning we had the designers ship their chosen collections to London and we photographed them against a brick wall, he recalled. “I think it was one of the most unprofessional online blogs in the world; at the same time the most expensive one. There was nothing below US$ 300-400,” he explained, adding that success however wasn’t as easy to come by. Despite having multiple worldwide coverage in key magazines, Siegel managed to sell only two orders in the first day and none for the eight days following it.

Not giving up, they got another fashion celebrity a head buyer for Maria Luisa in Paris to create a collection which was modelled by top model Lara Stone two weeks prior to the launch of Louis Vuitton’s collection. She modelled 50 pieces and for the first time they were sold out.

Redeveloping online retail

The problem however was that the designers had to ship the collections to London and pay for delivery and ‘Not Just A Label’ had to organise the shoot, take pictures, store the items and deliver the goods to customers. When the end sum was collected and expenses paid there was only a little remaining.

“One day my mum bought a necklace from the website which a customer from NY really wanted. The designer was based in Barcelona agreed to make another provided she sends directly to customer. We begged her to find the best box she can find and send it,” Siegel recollected. A week later they received a call from the customer who was thrilled by the customer care and the personalised note from the designer. “She admitted it was the first time she was able to communicate with the designer and mentioned that this was the way to go,” he said. “Interestingly by connecting the designer with the customer we could step back a little; we did not have to spend money on photographing the dresses, no shipping and storing, so we went for a complete change to redefine online retailing. This allowed us to have not 50 items per month, but 5000. We could also connect a designer in India with a customer in Canada. We redeveloped the system.”

Lady Gaga who was already wearing a lot of NJAL designer pieces decided to do the next celebrity session and clothed herself in designs from the label for her ‘Poker Face’ music video released in December 2009. “Every piece she wears in that video including the eye mask were from our website,” Siegel said.

The website

A website is a central element for any company in the fashion industry today and the NJAL website focuses only the newest and most successful talent that is featured on the site’s cover page with separate sections for online shopping, designer’s blogs, editorial, and news. The website also has a community section where documents needed for start-ups can be downloaded.

“We help the designers with brand development, business services and support, which gives them exposure and if our team really likes the collection we put them on the cover page which changes daily to maximise their opportunities,” Siegel explained and added that they also send out a newsletter to over 50,000 people every week.

“Editorialising content is now very important. All the big online stores have their magazines and are creating stories around the product they are selling.”

 “We connect designers in an effortless and an apolitical way. We don’t want a platform that is elitist, or accept designers that come through PR companies or magazines; for us it all comes down to design, creativity and quality. We have all kinds of designers working in different eco systems around the world,” Siegel added.

Currently the company represents a massive 11,500 designers from over 100 countries.

Why emerging designers?

The key Siegel observed is individuality: “The whole market is shifting towards individuality.” He added that people are now realising that they want something other than what the mass market consumes. “A high end luxury Gucci showpiece gets produced some 30,000 times, so what is luxury there?”

Young designers on the NJAL platform have recognised their responsibility to create garments that are uniquely produced and inspired locally.

“We must stop promoting this false idea that we can only succeed if we go to Paris because Paris does not need any more designers. There are 2500 collections shown every season,” he said.

Digitising the content

The internet, Siegel believes, is the perfect democratic environment for fashion start-ups to grow quickly in; with the likes of Facebook, Tumblr, Twitter, Instagram available, it has shortened the length of the introductory stage for a new company; offering increased exposure and more access to markets.

“I think the world is growing and a key element that helps you to grow in a more democratic way is the digital channel. It makes the playing field even. Think about different ways of showcasing whatever you produce,” he reflected. “This is not only about fashion, films and social ad stream but it is about going away from the classic catwalks. Presentations are becoming more preferred.”  So why hold a fashion show for 300 people inside a ballroom, when a designer can make a presentation which could be static, dynamic and can attract a lot more people to see the show? “It is about doing things in a different way,” he added.

“Think about your target market. Of course a fashion show is very glamorous and fun and you can get your friends and parents to come and applaud but that isn’t the aim of showcasing fashion. Think differently and start structuring your business, it’s about going against the stream,” Siegel advised.

“My idea was to connect young designers around the world with the fashion industry and I didn’t want to walk the beaten path that was one of my personal statements. I always wanted to do something different. I want to walk against the main stream, I don’t want to be with them just because it is cool I want to be on my own and create my own party.”

Entrepreneurs then and now

Noting the difference between businesses then and now, Siegel noted that currently what is promoted is an open office with open communication and not an office separating people with rooms and doors and secretaries to take appointments.

Old firms were independent while the new are more synergistic. While firms back then maintained closed sources (protecting secrets and intellectual property) it is now a more open-source business concept. Old companies maximise and minimise while new age companies optimise. Old companies are linear where the new companies are more networked. “In old companies, function fits form, whereas now form fits the function. Old firms manage risk while the new foster resilience.” The old firms protects while the new adapts. New firms are also more social and ecological.

Financing your business

Listing this under key issues faced by entrepreneurs, Siegel acknowledged that in Europe banks are not lending as much as they say they do. “Banks live in a different environment now.” However, at the same time there are venture capitalists investing in start-ups. “The latter is more for scalable business and is a short term investment of 2-5 years. They also want to make 10 times the money they invested in your business, so you will be under pressure,” he pointed out.

Reality check

“If you want to become an entrepreneur after graduation you need to get experience, network and gain contacts,” Siegel said. “If you have an idea and that the business needs to start today because tomorrow is too late, then just do it. But a year or two working in a big company won’t hurt, and will give you a chance to write your business plan.”

Starting a new business is both exciting and rewarding but it is also full of challenges. Challenges that will affect you immediately are competition, loss of company perks and immense pressure on personal relationships. “You have to work 24 hours. Your business is not work anymore but it becomes life, and life becomes work and you start living that. This might result in isolation, so you should be prepared,” he warned.

Designers must also know the industry and the competitiveness in the creative sectors. Timing is also important, “you usually have one shot with one person – is now the right time or is the right time in a few years? Hold yourself back when necessary.” Siegel said: “When you pull out the ace card you have, play it at the right time. Understand your business; it is not a hobby, it should make money. Be honest about the costs. Shareholder agreements etc should be set up properly at the beginning. Think about the type of company you are registering and the protections it offers,” Siegel concluded.                       

     Pix by Upul Abayasekara