Hole in One (Published November 2003)
This
is a story about haute couture, not golf. Sometimes "less" means "more". Less
material. More money.
Haute seems to mean "lower", like lower cut and lower slung.
We offer trade finance, often without the use of much money. That can be a
finance facility that is good value. But why am I writing about holes and haute
couture? Read on.
Our business is to provide working finance to our SME clients. We do this
in lots of ways. For example, we offer debt factoring, but we prefer to do more
complicated things. There are many independent factoring companies and banks
competing in the factoring market place, but not offering our specialised solutions.
We often work with factoring companies to offer a combined solution.
Robert Cary Williams came to see us with his orders for his haute couture "collection".
Robert is getting famous for the clothes he designs. Did you see his collection
on the front page of the London press recently? He is now in his fourth season
– his fourth collection.
But Robert had an unsolved financial need. He had shown his autumn collection
in London and Paris and had floods of orders, but he had to buy the materials
and make the garments.
He is not a man of financial substance; he has designs. And he had lots of
orders from retail customers all over the world. These retailers had paid him
substantial deposits and would pay the rest before delivery. Robert had a business
partner with business and administration experience. Our prospect client seemed
to have the essentials for our funding support.
"He buys a standard T-shirt, drops it in tea . . . shoots holes in it
with a shotgun(!) and then sells it as high fashion."
The customer's deposits had been used to pay for the clothes shown on the catwalk.
Robert still had to make the clothes for which he now had orders. On one remarkable
design he buys a standard T-shirt, drops it in tea, fixes the resulting colour,
shoots holes in it with a shotgun(!), and then sells it as high fashion at substantial
mark-up. Jackets, trousers, outer garments; they all had to be made.
Crucial for us was the fact that he had done this four times before, he had
orders with deposits, his customers would pay before delivery and he had one
major supplier who would assemble all of the main materials he needed, but they
would not give him credit.
But they did give credit to us. We also pay the man who does the tea stains
and the one who shoots the holes. The customers pay us and Robert takes his
profit. He has just shown his spring collection for 2004 and the orders are
flooding in again, but now he has no holes in his finances.
Haute Couture; Haute Finance.
Written by David Ross Director
Download
the Article 'Hole in One' at www.fairfaxgerrard.co.uk/docs/BusMon 1103
Hole in One.pdf
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