If you're a young designer just starting out and you sell your collection to a reputable retailer, it's reasonable to assume that you'd receive timely payment in return, right? Nope, not necessarily.
Business of Fashion talked to some London-based designers who have had some pretty appalling experiences with retailers--late payments, unfair payment plans, and even no payments, leaving them and their fledgling businesses in bad shape.
Two concept stores, London's LN-CC and Milan's Corso Como, were cited as offenders, allegedly habitually making late payments to designers. While Corso Como wouldn't comment on the situation, LN-CC did. Fraser Harper, LN-CC's chief executive, acknowledged that there had been cash flow issues in the past--but they seem to genuinely want to do right by designers.
Still, late payments can cause a chain effect that can be devastating to a designer who's just starting out. Peter Pilotto knows about the situation first hand, though he declined to name retailer names. “On the one hand, you are so happy that [stores] have placed an order, but then they don’t pay you, which creates a chain reaction because you have promised your manufacturers that you will pay them when the stores have paid,” Pilotto told Business of Fashion. “It’s a terrible situation.”
To be fair, it goes both ways. Retailers say that new designers can be inconsistent--late deliveries and quality issues are sometimes an issue. But there are ways for both sides to protect themselves.
“The problem is that young designers are often required to sell their own collections and because of their lack of experience they accept terms that are risky for their businesses," Maria Lemos, the founder of respected London showroom RainbowWave said. "I think what they need to know is that it’s better not to take an order, than to take a risky order."
Thankfully this doesn't seem to be a problem that's as prevalent in the US. But young designers if you're reading this... have you come up against similar problems Stateside?