One look at me and my duds and you instantly know I am no fashion plate, at least where my own apparel is concerned. However, I do feel I have a good enough fashion sense where others are concerned. None of which means a hoot when it comes to the fashion stories I write, and I’ve written a whole bunch of them, mostly in connection with Omaha Fashion Week, because I go the experts who know fashion for my information. This story for Metro Magazine (http://www.spiritofomaha.com/Metro-Magazine/The-Magazine/) is the latest OFW piece I’ve done and where in the past I’ve focused on designers and shows and trends, looking sometimes back and other times forward, this story examines a burgeoning business relationship between emerging designers and a local lending-financial institution, SAC Federal Credit Union. The idea being explored by this pilot program and thus by the story is the importance of desginers having access to capital to grow their lines, their brands, their businesses if Omaha is to ever foster a true design community and industry.
The next Omaah Fashion Week is August 17-22.
ecosystem: Omaha Fashion Week & SACFCU
Building the fashion eco-system via business focus
BY LEO ADAM BIGA
Originally published in the August-September-October 2015 issue of Metro Magazine (http://www.spiritofomaha.com/Metro-Magazine/The-Magazine/)
When Nick and Brook Hudson aren’t caring for their new-born girl they nurture their other baby, Omaha Fashion Week (OFW). The couple cultivate the local fashion eco-system through a multitude of showcase events, educational experiences like Omaha Fashion Camp and fashion sales organizations such as Design Parliament LLC. They were the inspiration and catalyst for the developmental organizations Fashion Institute Midwest and Omaha Fashion Guild.
This infrastructure gives area designers venues to show their work, experts to advise them on aesthetic and market matters and a support system for resources and professional development opportunities.
Now, with SAC Federal Credit Union as a partner, the Hudsons are bringing designers together with bankers to maximize commercial potential. Thus, the new financial support program gives designers the financial acumen and services to put their creative pursuits on a business basis. As SACFCU members, designers have access to credit lines for purchasing materials or equipment, for expanding into new spaces or for doing anything else to enhance and grow their business.
Banking on potential
The test program may eventually work with other kinds of designers as well as visual artists, filmmakers, photographers, playwrights, et cetera.
SACFCU president-CEO Gail DeBoer opted to work with fashion designers to initiate the program since her institution already had a sponsor relationship with OFW. She shares the Hudsons’ vision for building a sustainable fashion community.
“We really saw the potential of the designers and what the development of that industry could do for our region,” she says. “We wanted to be part of an event that’s not just entertainment but also adds to the quality of life here by nurturing these young entrepreneurs. We felt this was a niche nobody else was addressing from a business perspective.”
DeBoer says her credit union is well-positioned to work with the micro-size businesses most local designers operate.
“They’re small and so there’s not a lot of profit at the beginning for a financial institution and that’s probably the difference between a credit union and another financial. I don’t have shareholders to satisfy, so I don’t have to show necessarily a return on every deal we make. The return on the relationship isn’t our motivation.
“Our mission is people helping people, so we have a passion for helping them reach their goals and hopefully someday they will grow. But that’s not our ultimate goal. Our ultimate goal is just to help our members. This is not just giving back to the individual designers but it’s giving back to the whole community because if we can foster that entrepreneurial spirit then it’s an economic benefit to our community.”
The Hudsons see close alignment between OFW’s goals and SAC’s.
“One of the things the team at SAC is very passionate about is helping people get started. They’ve got that mission,” Nick says. “And we have that, too,” Brook says. “We’re a social enterprise.”
Nick says, “I’ve never come across another financial institution willing to put the time and effort into all these small businesses, because we’re talking about tiny loans – a thousand dollars or two thousand dollars.”
Getting up to speed
A typical designer who shows at OFW requires assistance with everything from establishing a business checking account to devising a business plan. But there’s much more they need to learn, including
understanding finance, buying, pricing, sales tax and various legalities.
“There’s a whole set of skills around doing those things,” Hudson says. “You might have it all worked out but then you need access to money – you need some money to make some money. Designers might have an opportunity to sell $10,000 worth of clothing but they don’t have the money to buy the $1,000 or $2,000 of fabric they need.
“We still have a lot of designers we deal with who don’t have bank accounts or credit cards.”
The Hudsons regard the financial literacy entrepreneurs have to gain as empowering and critical to their success.
Nick says OFW and SAC are committed to “help people turn their passions into businesses or to help their existing businesses go further to make them self-sustaining. We’ve got wonderfully talented people having to fund their passion by working in a coffee shop during the day and then spending all night doing their passion.
“We’re trying to help them get to the next stage.”
He says with the skills development that goes on now informally through OFW and formally through Fashion Institute Midwest “more and more are now making a living – some are even employing people.”
Brook Hudson says it’s all about giving designers the tools required to reach more customers and find financial stability.
“In this day and age it’s a lot easier for an artist to turn their passion into dollars because of the Internet. They have a worldwide community they could potentially be selling to. So part of our challenge is helping them unlock that opportunity,” she says.
It’s important designers have the right mindset by being, what Nick calls, “more commercially-minded and thinking what customers want.”
“It”s a totally different ballgame to go from custom pieces to something designed from the beginning to be mass-produced,” Brook says.
Tailoring financial services to designer needs
The Hudsons introduce designers to SAC they consider ready to take the next step.
“Not every designer is ready for that,” notes Brook, who adds that some are intimidated by the prospect of working with a lender.
Bryan Frost and Erica Cardenas, owners of vintage-inspired boutique Wallflower Artisan Collective and designers of their own Wallflower apparel line, are excited to see how SAC can help them expand their apparel production capabilities. They say money’s critical if they’re to grow their business and if Omaha’s to grow a fashion hub. They’re encouraged that designers and lenders are finding alignment.
Samone Davis, owner-designer of the luxury streetwear brand Legalized Rebellion says she’s worked “diligently” with the SAC team to establish a line of credit for her label. She adds, “I definitely feel financial help is key to growth as long as there’s a solid plan and execution behind it. As designers we tend to get lost in our own minds. Sometimes we have to make sure we are focused and know exactly who we want to market to, otherwise there won’t be any progression.”
For designers like these, Gail DeBoer says, “we’re offering a kind of a concierge service,” adding, “We’re walking them through this journey. That begins by really developing a relationship with them to know what each one needs because they all have different needs depending on their business stage. We do look them in the eye to gauge how serious they are, how committed they are. We do talk with them in order to understand the uniqueness of their business and their challenges.”
SACFCU vice president of operations Keli Wragge is that concierge figure working with designers.
“Some are ready to take their designs to the marketplace and others are just getting started and wondering what they need to do in order to be ready for financing down the road,” Wragge says. “One client needs to expand and is looking at buying a commercial building. Another is about to open their first business checking account. Prior to this they transacted in all cash. There is a big gap between what the first member needs and what the second member needs.”
There are also many common issues designers face.
“Supplies and the cost of production are large expenses, especially if the designer isn’t a seamstress and has to hire outside talent,” Wragge says. “One of the big issues faced by designers is irregular cash flow and finding a way to live a comfortable life while trying to perfect their craft, innovate new designs and get a collection ready. Many designers have to have another income or job in order to support themselves.”
DeBoer says, “Just getting started and getting them to think about things they’re not even thinking about – often you don’t know what you don’t know – is huge. We bring in the right person at the right time from the credit union to help them through that next decision or that next product they might need. We want to make sure they have a business partner holding their hand, walking them through the process.”
There’s no guarantee any designers will make it.
“Whether they will all be successful, that’s up to them,” DeBoer says. “But we can certainly help them by taking away the challenge of writing a business plan or getting some early money to realize their dreams.”
Growing a design community and fashion industry
Nick Hudson is heartened by the way the metro’s fashion eco-system has evolved in less than a decade.
“There’s just so many more people and organizations involved and that’s what makes it grow,” he says.
The Hudsons have been planting seeds to see what takes root.
DeBoer says if a true fashion industry is to emerge here it must take the same intentional, step-by-step path that OFW has followed.
“You don’t start out with everything all at once. It has a life cycle and I think this is an exciting next step for Omaha Fashion Week and for us. I think everybody’s excited about taking it to that next level.”
Nick says, “The next stage is going to be helping with marketing and bringing the customers and sellers together.”
Increasingly, he says, designers sell their wares before and after OFW events.
He and Brook envision a brick and mortar base to anchor a dedicated design district. Having a critical mass of designers in close proximity to each other would provide access to shared spaces, facilities and services for sample making or material production and to economies of scale, efficiencies of operation and synergies of creativity.
“We’ve got to have everybody together working in one place and all that collaboration going on in order to reap some of those other benefits,” Brook says.
Ultimately, the Hudsons say if enough capacity is built a factory would be needed to manufacture the garments and accessories of not just local designers but of some select national and international designers.
Brook notes several major designers already have or are looking to move manufacturing from overseas to America, but many U.S. cities make that cost prohibitive. She says Omaha offers certain advantages, such as “great work ethic” and “low cost of doing business and living.”
Should fashion manufacturing ever happen here at scale, she says, “it would be powerful because that positions Omaha on a whole different level as a national player on the fashion scene, plus it’s creating jobs.”
Meanwhile, the creatives behind Wallflower and Legalized Rebellion say they appreciate the financial support system SAC offers as it propels their dreams and strengthens the design community.
The next OFW designer showcase is August 17-22. For details, visit omahafashionweek.com.
“We really saw the potential of the designers and what the development of that industry could do for our region. We wanted to be part of an event that’s not just entertainment but also adds to the quality of life here by nurturing these young entrepreneurs. We felt this was a niche nobody else was addressing from a business perspective.”
~ GAIL DEBOER
“I’ve never come across another financial institution willing to put the time and effort into all these small businesses, because we’re talking about tiny loans – a thousand dollars or two thousand dollars.”
~ NICK HUDSON
“This is not just giving back to the individual designers but it’s giving back to the whole community because if we can foster that entrepreneurial spirit then it’s an economic benefit to our community.”
~ GAIL DEBOER