Friday, September 07, 2007

Young fashion designers show uncommon wisdom in business matters

There are lots of reasons to be impressed by the designers at Proenza Schouler, profiled in today's Wall Street Journal (link - $$). I'm most impressed by their business savvy--specifically how they have been able to grow their business from a self-funded startup yet retain control, a difficult task in the fashion industry.

The group, consisting of designers Jack McCollough and Lazaro Hernandez and CEO Shirley Cook (ages 29, 29, and 27, respectively), has cut a series of deals that stand out for their vision and good sense. I'd also say that the group has been willing to grow more slowly than others in order to maintain control. (In other words, they haven't gotten greedy.) Here are some examples of what they've done to date:

  1. Created their first collection with money borrowed from their parents. That collection won a student competition at Parsons School of Design and was bought by Barney's.
  2. Created a brand using their mothers' maiden names so that they couldn't lose control of their own names. (Think Joseph Abboud wishes he'd done that?)
  3. Got venture capital to produce a second collection.
  4. Won a contract from Target for a limited-edition collection. Used the Target money to buy out their VC.
  5. Most recently, accepted $3.7MM of investment from the Valentino Group for a 45% stake in the company. The Valentino investment gives the group access to more advanced production facilities and Valentino's distribution channels in addition to capital.
These would seem like smart moves for executives twice the age of the Proenza Schouler team. That they could make such wise decisions so early in their careers is truly remarkable.

(Photo: a dress from the Proenza Schouler Resort 2007 collection.)