3 Questions for Anne-Laure Bourout-Oval
Coach for the Talents program
Anne-Laure Bourout-Oval has been a textile and fashion expert for 30 years. She started her consulting agency, Albo Conseil, in 2011, and has since helped fashion businesses with their financial and developmental challenges. In her role as coach for the Talents program, she’s dedicated to supporting young brands. She shares her observations and advice for these complex times.
How have the fashion brands doing business safeguarded their cash position during this crisis?
I hope that all fashion businesses with positive equity took steps to apply for a state-guaranteed bank loan (PGE)! That was a real breath of fresh air for cash flow and the best way get through these hard times. In fact, I’d now like to encourage our sector’s businesses to treat the PGE as a liquidity loan. This would safeguard their cash position, which is so important in our industry. The truth is that fashion requires a lot of cash. At least six and even 10 months can pass between the design of a collection and when the work is compensated. This cycle can be even longer with the accumulation of stock due to the drop in consumption. And during all this time a business has to hold on!
Overall, it’s been positive having access to all these tools created during the health crisis. For example, the Rebond loan in the Île de France region is for even smaller brands, and subsidies for digitalization for brands without e-shops also exist. And as part of the stimulus plan, on 3 May the government set up a participative loan that’s halfway between a long-term loan and equity participation.
Are there tools that are especially adapted to rapidly-growing fashion businesses?
There are overdraft facilities, which aren’t well known, since banks don’t promote them. Based on sales forecasts, they allow businesses to borrow for a very short period, for example for manufacturing costs. There’s also the Institute for the Financing of Cinema and the Cultural Industries (IFCIC), which is co-managed by Bercy [Ministry for the Economy] and the Ministry of Culture to finance the cultural industries, which include fashion. The organisation guarantees loans to cover working capital needs. This can be a solution when a business enters a phase of rapid growth and experiences cash flow strain. There aren’t enough tools, and that’s too bad since the fashion industry could appeal to young management and financial graduates who appreciate complex, high-pressure situations.
Is it reasonable to take off on an entrepreneurial adventure in fashion today? What advice would you give to young brands?
You have to be optimistic. Even if people are slightly less inclined to spend since the two most recent lockdowns, the situation is not as serious as during the 2007 financial crisis. Additionally, for the past five years I’ve noticed that emerging brands are more prudent, and that’s the right attitude. Being agile should also be a priority. Consumers have changed significantly: they’re better informed, and they pay attention to quality and price. So having an idea is no longer enough to get started. You need a comprehensive project and a mix of great products. You also have to be aware that the fashion business demands a lot of work and, as I already mentioned, enormous funds. That’s why it’s important to learn to function in new ways. For a long time, the big fashion houses opted for a “closed system”. But now the sector needs to function as a network, a philosophy that’s emphasized in the FFPAPF’s Talents program, the Institut Français de la Mode’s program, and other incubators. These projects are wonderful assistance tools that promote solidarity, another very important idea.