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- 20 Aug 2015
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The Luxury SME Survival Guide

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Surviving as a luxury SME is a game of smoke and mirrors says Clive Darby, former founder of luxury menswear label RAKE, and now Collections Director of iconic British brand Dunhill.

Our industry is one of smoke and mirrors. It is the illusion that is played out with all luxury companies through various stages of their development. All looks controlled and elegant from the outside yet scratch beneath the surface and what’s found will usually be a very different story.

I was both the founder and creative director of RAKE, a London based men’s lifestyle brand. My business wholesaled internationally and until recently had a store in Mayfair. I started my career as a buyer for Browns in South Molton Street, helped establish Richard James in Savile Row and then co-bought Kilgour and oversaw the re-branding and launch of what became a successful menswear brand before selling it in 2008.

This is an account of life as a luxury SME, with all its triumphs and tribulations.


 We quickly grew wholesale year-on-year, dressed celebrities, and presented catwalk shows at London Collections 


With all this aforementioned, accumulated knowledge and with the monies earned from the sale of Kilgour I established RAKE. Our first collection for AW10 was presented and sold to Lane Crawford, Boon The Shop, Minority Rev and Matches.

And just like that, we suddenly had an international label and had secured some of the world’s renowned names within the luxury retail sector.

I had a plan to establish a retail base as soon as possible and grow brand awareness through wholesale. Retail became key as you could control your image, retain stronger margins and present the collection with true integrity. The story of our RAKE man would be told in an environment that echoed his lifestyle.

We quickly grew wholesale year-on-year, dressed celebrities who chose and bought our clothes, presented catwalk shows at London Collections, Men’s. We wholesaled in either Paris or Milan, generated great press and swiftly established ourselves as the brand that pioneered the Mix and Match concept for the modern man.

All this was being achieved with a team of just four individuals, myself included. And this was when the smoke started to creep in…


 Once you start that ball rolling you have two choices – fight or flight 


The business reached a point where investment and additional expertise was needed. Suddenly I was being introduced to individuals who professed that they could help me secure the necessary funds and add the skills needed to grow the brand. I knew I was juggling too many balls and so trusted these individuals, believing that they would deliver on their promises.

If the illusion was that all was running smoothly, then the reality was a very different story. In my case I was trying to do too much. The challenge of running a business, designing, selling and promoting collections, whilst trying to secure monies began to take its toll.

Once you start that ball rolling you have two choices – fight or flight. Having invested not only all I had physically, but emotionally as well, I was in for the duration. I continuously wracked my brains to solve the problems and find solutions. Long days and sleepless nights as to how I was going to attract and secure investment became the never-ending cycle.


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RAKE Menswear


It is fair to say that RAKE was not without financial problems, but nothing – if intelligently approached – that could not be resolved and dealt with over time. Yes, we had cash flow issues especially when paying for fabrics, production, stock, shipping, storage and retail, sometimes with two different seasons being funded simultaneously.

Funding the production of the collection was a different story, and when told that we could not get a loan without guarantees and assets being signed over, then it has to beg a question as to who truly is supporting SME businesses?

SME Financing seems to be the new buzzword that is being banded around by banks and certain institutions to give hope to small and medium sized businesses that, for whatever reason, are battling to keep their heads above water. Reaching out to these banks, banging their drums about SME Financing, did seem to be one route


 I had to prove to potential investors that the customer was out there 


But trying to explain to the banks that you cannot sign any assets over, because any asset you had has all ready gone into building your company, brand or business, is a waste of time that falls upon deaf ears. What you can expect to hear back are one-dimensional textbook answers that require little to no understanding of what it is you are exactly going through.

We were then left with ‘angel’ investors or private equity houses, and for the sake of sanity I will not go into the number of meetings that were arranged and took place all with the words: “You’re not big enough.” Or: “You’re too small.”

I have been asked, on more than one occasion: “Why did you open a store if your situation was so arduous?” – and the answer is simple. Our business plan was weighted towards retail and as such we had no retail base. We had no proof of concept.

I had to prove to potential investors that the customer was out there, and they in turn needed to see the vision of the brand.


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RAKE Menswear


The RAKE retail operation was self-financed. Stock was ordered and paid for in advance. The fit out, lights, rails, hangers and a good team were found and we turned everything around and opened the doors in three weeks. In the short time we were open we had built up our customer database with over 800 customers and achieved sales that were nothing to be ashamed of.

By opening the store our wholesale orders increased and our partners, both old and new, could tangibly understand the RAKE concept and appreciate what we were trying to achieve. We found that we did indeed have a customer – and more importantly – a repeat customer.

Cash flow became the real killer. Add to this that our Japanese client went bankrupt, owing for not one but two collections, and the clock began to tick.


 Cash flow became the real killer 


We had confirmed wholesale order books from the likes of Matchesfashion.com, Barneys, Harvey Nichols, Maxfields (to name but a few) and our retail operation was gaining traction and resonating with the customer. However, the question still remained: how we were going to fund production?

Our backs were well and truly up against the wall and the pressure was huge. We simply could not find or secure the investment required. We tried every conceivable route but finally there was little choice left other than closing our doors.

I am not pretending to be the first, or indeed the last, to be in this position. Entrepreneurs have very little by way of support when caught between a rock and a hard place. If, as widely reported by our government and banks, SME finance is a priority to get businesses back on their feet then it has to go beyond solely financial input.


 Solid, grounded, infrastructures need to be put in place to support small businesses to achieve long-term growth 


Solid, grounded, infrastructures need to be put in place to support small businesses to achieve long-term growth and stability. A structure that brings knowledge, understanding, experience and guidance within the given sectors and by so doing so can underpin intelligent financial solutions with trusted, working relationships that add true, long-term, strategic value.

For all those entrepreneurs who are about to start new ventures or are out there in the fray then my thoughts are with you all. Hindsight is a wonderful thing and if I had truly had a chance to stop, take stock and think things through then maybe I would have played a few things differently.

I remain immensely proud of all that was achieved with RAKE. We built an international brand from nothing in five years, having started the concept in 2009 just as the global economy went into free-fall. We were massively underfunded for the ambitions we had, but we had the belief that the brand had a place in this competitive market.


 Since closing the doors on RAKE, the response from the industry has been enormously positive 


Since closing the doors on RAKE, the response from the industry has been enormously positive and quite humbling. I own all the IP for RAKE and should the correct partners be found then the brand could be resurrected.

CD Consultancy was founded to advise on business growth strategies, creative direction, brand image and many other facets connected within our sector.

While I’m now happily working as Collections Director at British men’s luxury brand Dunhill in London, my time working as a consultant gave me the opportunity to support other SME’s and larger corporations within our industry.

Talking to other business owners allowed them to gain both the benefits of my experience with RAKE but also discuss the pressures of running a brand with somebody who has been in their shoes and understands. Despite the challenges, RAKE remains an important chapter in my life and one that will influence everything that happens in the future.





To further investigate luxury business & strategy on Luxury Society, we invite you to explore the related materials as follows:

- Linking Talent & Technology For Success In Luxury
- 5 Lessons For Luxury Strategists
- Crossing Over: A Rising Trend In Luxury Recruitment?

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Clive Darby is Collections Director at British men’s luxury brand Dunhill in London. He also founded the CD Consultancy, a firm which provided strategic direction to luxury SME’s.

www.clivedarby.com

This article was originally published by Hudson Walker International, a global luxury recruitment firm, conducting luxury executive search services since 1993.

www.hudsonwalker.com