Fashion design retail
Historically, fashion design retail has often had a reputation of a set of people who spent most of the time drinking expensive wine and eating rich food at swanky parties. Fashion designers were sometimes perceived as creative but lacking business acumen. The fashion industry no longer has a perception problem. Today it is recognised as serious multinational corporate business. The global fashion industry is reported to be worth more than $1.5 trillion, employing millions of people. The British Fashion Council published a report titled the “Value of the UK Fashion Industry” in 2010, figures updated in 2014. According to that report the UK fashion industry contributed a staggering £37.2 billion or 2.7% of total UK GDP in 2009 (*Please note these figures vary depending on the sources).
So that being said, here are my top 10 tips for a fashion designer or executive running a fashion design retail business from a legal perspective:
1. Brands matter
A prior condition for the success of a fashion design retail brand is an unusual and easily recognisable trademark. Consumers have grown to identify with brands and can easily recognise their brand preference of a product or service in the presence of competing brands. The brands themselves have become things to buyers. Therefore only those businesses that understand how to identify and manage their intellectual property have a hope of success in the fashion industry.
It’s a given that you will be copied. Fashion design retail is full of knock-offs. Although there is no such thing as 100% protection, some degree of protection is preferable to none. Intellectual Property law offers a limited degree of protection for your creations. Generally you cannot protect fashion designs (this differs depending on the jurisdiction). You can protect your logos’, images, jewellery designs, fabric, prints and innovative fabrics and materials. One of the problems is that the practice of taking pictures of designs on the runway and sending them directly to a factory overseas to be copied is almost routine. It’s very difficult to monitor copying and to enforce your rights.
Know and utilise the value of licensing. Through licensing, a fashion label can exploit new markets in different countries, whilst protecting the quality of its brand name. An effective licensing strategy means complimenting licensing with a thorough anti-counterfeiting plan. There are several well-known companies specialising in anti-counterfeiting.
4. Company structure
Surprisingly this is often ignored by fashion start ups to their detriment. Ensuring that the business is properly incorporated, and has an appropriate legal structure is a priority. You should get specialist advice on incurring debt finance, selling equity and/or other types of finance. It may not make much sense to you as a start-up, but if you should want to raise money to grow the business or even to take money out for personal use, having a well organised corporate structure will be vital to the success of the deal. You will need to have well arranged systems and have properly complied with all company forms and formalities. The deal between LVMH and Nicholas Kirkwood wouldn’t have happened without a well organised corporate structure and properly following company formalities.
Dealing with retailers can be complex. An unwary fashion business can easily get a bum deal from a shrewd retailer. Make sure that you have good commercial sale agreements with retailers.
Make sure that your employment agreements are in place and up-to-date. You should ensure you comply with all the various laws and regulations regarding employee rights. Having a staff handbook is essential.
Fashion design retail brands are using celebrities to influence perceptions of their brand more than ever. But if you are going to use celebrities and/or star models as part of your marketing campaigns, make sure that you have an endorsement or sponsorship deal in place. You don’t want to end up like Gaga jeans sued by Lady Gaga for trademark infringement.
8. Digital media
This is our area of specialisation. Although many brands are still delaying a full embrace of social media and digital technologies, this is without doubt the most explosive area of growth for fashion business.
The success of Nick Robertson’s ASOS expected to turnover £1bn by 2015; or Natalie Massenet’s Net-A-Porter, which attracts more than 14,000 new customers a month; or Sophia Amoruso’s NastyGal reputed to be valued at more than $100 million dollars, has rightly sparked huge media interest. NastyGal which started as an eBay boutique for vintage clothes, launched in 2008, is a digital media phenomenon.
It’s not just the start ups that are pioneering fashion retail and technology. There is no fashion house more integrated with social media and the digital era than Burberry, whose entire SS14 fashion show was shot with Apple’s iPhone5S, using only 14 phones.
If you are starting or are in the fashion business today you need to seek advice regarding the use of digital images and other internet centric challenges. The dominance of social media in the advertising space has made this a crucial area of importance for fashion businesses. Make sure images are cleared and that there are no privacy issues regarding the people portrayed in those images. Additionally you might want to obtain clearance for images shot in particular locations or creative works depicted in those images.
The international sourcing of material, expertise and labour, and the movement of money and garments across various national borders is now run-of-the-mill. Relatively small businesses have caught on to the savings that can be made from sourcing low cost materials, skills and fabrics overseas. You will need international advice regarding import and export duties and regulations. The other aspects of international law include local consumer, employment and other various laws and codes that govern trade in the countries in which your garments are sold or manufactured.
Obviously these tips are not exhaustive either in content or depth. However they deal with most of the main considerations to bear in mind. Of-course, as well as these basic tips, you will also need bags of confidence, tenacity and a super tight business plan that bets correctly on the direction the fashion market is going.
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To book a face to face consultation for commercial legal advice you should contact a specialist fashion solicitor (charge rates may apply and may vary).