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News Dec 23, 2008 @ 9:57am

The Recession Makes a New Job

by Natalie Hormilla

lutzandpatmos bobble top.jpgThis might be the first interesting thing we’ve read about the recession since it started to take over the country’s news flow:

Some design companies, like Lutz & Patmos, have started hiring factors - people who assess boutiques’ credit worthiness so that designers can decide whether they’re willing to accept an order from a particular vendor in order to avoid last-minute order cancellations, a rising problem in the current economic state. These factors will also act as sort of collections agencies, to make sure that retail buyers pay their bills to designers on time.

So, good news: Higher job demand for people who want to be factors, and better order security for designers.

Bad news: It sounds like it’s going to be tough to get cool, smaller designers into your boutique - especially if you’re a cool, small boutique.

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Posted in News and Economy, Factor, Lutz & Patmos, Recessionista, Wall Street Journal

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Comments

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1

posted by guest

Dec 23, 2008 12:52PM

dooh, and forget to mention the 7% or bigger fee that factoring companies typically take. Which means if you can't think out the math, if a company makes gross margin of 20% that is going to now be 20-7 = 13%.
So a lot less money to go around. Except to the banks who run most factoring companies and did their best to get us into this siht, and now they get to profit from it. Hooray.

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2

posted by guest

Dec 23, 2008 1:14PM

it is quite fitting that lutz and patmos are one of the brands doing this. their stuff is waaaay overpriced for what it is, and i bet with the current economy it is a brand that stores might have trouble selling at full price.

if stores have to mark stuff down below cost, they are going to have less money to pay for their orders and may have to cancel some, or they might go out of business entirely.

imo, what brands like lutz and patmos SHOULD be doing is lowering their pricepoint. the price of contemporary clothing has gotten out of control in recent years. by making it more affordable, it is more likely to sell at full price, and stores will be less likely to cancel orders.

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3

posted by guest

Dec 23, 2008 2:25PM

the price of contemporary clothing has gotten out of control in recent years...


Guest #2 you are 100% right!

It's no question their stuff is not selling, unless severly marked down these days...

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4

posted by guest

Dec 25, 2008 2:35AM

we use factors all the time, there are so many stores out there that just DONT pay their bills!! Factors are a necessary part of the business in a world where people try to get out of paying for goods. If you pay your bills on time anyone will sell to you... so if you have a cool small boutique just make sure you can pay for what you order!

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5

posted by guest

Jan 08, 2009 8:57AM

i own several lutz & patmos pieces and believe that lutz & patmos is considered a designer brand, not a contemporary brand. they sit on the floor at barneys with stella mccartney, miu miu, marni, etc...and they are very well priced for that area. they make very beautiful handmade pieces from high quality yarns that probably can't be sold for the same price as something of lesser quality from a contemporary boutique. last time i was in barneys, i noticed that they do have a contemporary brand called leroy & perry that sells in barneys coops. http://leroyandperry.com/
for really affordable lutz & patmos designs, check out the stuff they did for west elm. http://www.westelm.com/online/store/KeywordSearchCmd?storeId=17001&langId=-1&catalogId=17002&firstIndex=1&lastIndex=8&keyword=lutz&x=0&y=0

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