Blog/News

Express to Partake in Philadelphia Fashion Panel

David Estrakh, Senior Vice President

Express Trade Capital, Inc. (ETC) is a founding sponsor of the theBrooklynfashionincubator (“BFI“– #thebrooklynfashionincubator) at Berkeley College, one of five fashion incubators spearheaded by Macy’s. In its inaugural year, BFI chose four candidates and provided them with access to work-space, supplies, and advice from leading experts in all facets of the fashion business, including sourcing, production, marketing, e-commerce, and finance. The businesses range from African-inspired designs to clothing for infants and toddlers. ETC specializes in financing apparel businesses through programs including, but not limited to, factoring, purchase order funding, letters of credit, and asset-based lending. ETC’s participation with BFI is part of a larger effort to give back to the fashion community through education, funding, and outreach, in addition to its daily commitment to provide quality service at the most competitive market rates for designers and small businesses.

As the incubator’s sponsor and leading expert on finance, ETC will participate in a seminar on financing for the apparel industry hosted by Philadelphia Fashion Incubator (PFI), on Wednesday, July 13, 2016. Like BFI, the Philadelphia Fashion incubator selects promising designers to partake in a twelve-month residency as the 2016 Designers-in-Residence (DIR) where they attend business workshops with industry leaders to help build their brands, sustain their businesses, and obtain resources to help them break into the fashion marketplace.

ETC’s participation in the seminar is an extension of its role as financial advisor and educator to BFI and PFI. The role of educator is especially important because finance is too often neglected by designers who are understandably focused on design, manufacturing, sales, and general operations. Express’ goal is to educate participants about various lending options so they can most efficiently manage their production growth. Too often new businesses struggle to balance mounting production and operating costs with current cash flow projections. The purpose of the seminar is to help clarify some common misconceptions so that participants can avoid pitfalls of obtaining improper financing.

For designers who manufacture goods to fulfill customer purchase orders, purchase order funding is targeted to solve precisely this issue and the cost is usually three to ten times cheaper than other non-bank options that many designers obtain. For designers who sell on open terms, factoring is a cheap and efficient option that usually combines collections, insurance, and lending into a single, seamless service that also improves operations and makes them more transparent.

Cost is not the only concern when considering lending options. Do you have to leave collateral? Are personal guarantees necessary? Is it a good idea to give a lender access to your bank account? Do you want a partner who can help you navigate the pitfalls inherent in the apparel industry? Is it better to borrow funds or to raise capital by selling equity?

These are the questions ETC helps designers answer and they are important because the answers may make the difference between a business that thrives and one that fails.

ETC is proud to give back to the fashion community by educating designers and serving as a yet another BFI and PFI resource that designers may use to reach their fullest potential. We are honored to serve in this capacity and look forward to growing together.

David Estrakh has an extensive background in international financial transactions and advises large multinational clients from a wide-range of industries including commodities, textiles, furniture, foodstuffs, and consumer goods. As an executive at Express Trade Capital, David is involved in operationsand legal matters, as well as business development, consulting, and management.  You can visit Express Trade Capital at its website www.expresstradecapital.com or you can contact David via email david@expresstradecapital.com. 

 

Philadelphia Incubator Flyer - July 2016_revised

 

Visit our site here.

Contact us for more information.


East Africa’s Used Clothing Ban

Sadie Keljikian, Express Trade Capital

Clothing donations may be banned in East Africa in the next few years.

Recently, it has become clear that clothing donations sent to Africa from the US or Europe may actually be hurting local manufacturers. The manufacturing industry in East Africa has gained a head of steam in the last few years, recovering from the massive hit factories took during the debt crisis in the 1980s and ’90s. With technological advances and a rapidly growing workforce, a local supply chain could be an important step for the region’s developing economy. Progress, however, has been so remarkable that given the right circumstances and leadership, the East African manufacturing district could compete with Southeast Asia in quantities exported to Europe and the US. This progress is being dampened, however, because clothing donations from the US and Europe are sent to East Africa in massive quantities and sold for very little money in local markets. The prices are so low, in fact, that domestic manufacturers cannot compete.

While clothing donations are obviously given with the best of intentions, they are sent to East Africa in such staggering quantities that the donated garments make up nearly 80% of the clothing sold in markets. Of course, impoverished people from Kenya, Uganda and surrounding countries want to spend as little as possible on clothing, but the region’s economic future depends largely on employment and economic stimulation provided by the manufacturing companies. As a result, donations actually keep the local economy from improving and blocks progress in East African manufacturing development. The effect has been so devastating, in fact, that Kenya alone has gone from a manufacturing workforce of approximately 500,000 people to only about 20,000 workers today.

In response to the continuous stunting of the local manufacturing industry, officials are considering a ban on charitable clothing donations in Burundi, Kenya, Rwanda, Tanzania, and Uganda.

New clothing will still be imported to supplement locally fabricated goods, but hordes of used clothing will no longer trample the potential of East African manufactured garments, should the ban go forward as planned.

Learn more about Express Trade Capital here.

Contact us for more information.


Express Trade Sponsors Brooklyn Fashion Incubator

The Brooklyn Fashion Incubator (BFI) at Berkeley College will hold a ‘Grand Opening & Ribbon Cutting Ceremony’ on March 8, 2016 at 5:30 PM.

Ashley Orlando, Assistant Vice President, will attend and present at the ceremony on behalf of Express Trade Capital, Inc., which is one of the BFI’s proud sponsors.

Additional information below:

Brooklyn Fashion Incubator Welcome Event

Learn more about Express Trade Capital here.

Contact us for more information.


Unmade Makes its Mark

Sadie Keljikian, Express Trade Capital

Unmade, a London startup, has a unique approach to sustainable, high-end knitwear. The company — as the name indicates — allows customers to customize colors and pattern arrangements before the garment is manufactured. Founded in 2013, the company has already received significant support from investors and consumers alike. The firm’s big-name backers include Connect Ventures, Felix Capital, and Jose Neves (CEO of Farfetch).

Each piece is specifically tailored to the customer’s exact specifications. This results in a method that involves almost no waste, leaving minimal off-cuts and no surplus merchandise.

Frédéric Court, Founder of Felix Capital said in a recent Forbes article “[Unmade] is a formidable enabler for creative talent to design and produce knitted garments that just couldn’t be created before, mainly because of supply chain and design technology limitations.”

Pieces are manufactured using the same type of industrial knitting machine that is used to mass-produced garments, meaning that the knitwear is high quality, but not nearly as expensive as a typical custom made garment. Each piece is created using recently developed software, called Knyttan, which automates the production process.

The plan is to eventually establish production facilities internationally, making the process even simpler by limiting shipping distances to allow customers to create their custom garments and receive them faster. If the investors involved with Unmade are as confident as they appear, we may see Unmade expand beyond its London home into the U.S. soon.

Click here to learn how ETC can help you fund your design firm.

Contact us for more information.


American Apparel’s Rehab

Sadie Keljikian, Express Trade Capital

It’s been a complicated year for American Apparel.

Founder and former CEO Dov Charney was fired following an internal misconduct investigation involving sexual harassment, defamation of a colleague and misuse of funds back in December of 2014. Since then, the company’s resilience has been repeatedly tested by Charney’s character, internal issues and declining sales.

American Apparel (“AA”) posted consecutive annual losses since 2010 (long before Charney was fired) and filed for Chapter 11 bankruptcy protection in October. During the company’s time under Chapter 11, new CEO Paula Schneider faced an insurrection of employees who were loyal to Charney and felt that new management was not living up to the standards that had been set in AA’s Los Angeles manufacturing facilities. Schneider responded with a memo asking staff “not to be influenced by unfounded personal attacks.”

Since his (very public) removal from the company, Charney has made numerous attempts to win or buy his way back to corporate control. He filed a $30 million dollar defamation case against the hedge fund controlling the company last spring, further depleting AA’s resources.

More recently, Charney and his allied investors from Hagan Capital Group and Silver Creek Capital offered to buy American Apparel in a $300 million bid last month, but were rejected in favor of one that gave control to the company’s debtors.

Schneider has attempted to rebuild the brand since she took over last year and is confident, despite recently mounting difficulties, that the company has a bright future. A Delaware Bankruptcy Court judge approved the new reorganization plan and rejected Charney’s bid, allowing AA to exit Chapter 11 and begin to rebuild without Charney. Schneider says she is relieved to be in a position that will allow stabilization of the company. She plans to address and improve e-commerce operation, the wholesale business, and other “foundational” concerns. In a recent interview, Schneider said of the upcoming changes, “These aren’t sexy things. It’s making sure a size 6 is a size 6 in every pair of bottoms.”

Although American Apparel has had a rough go of it for the last five years, with Charney truly gone and the company refocusing on limiting overtime and creating a consistent product, it’s looking like the brand might finally be out of the woods.

Visit our website to learn about ETC’s financial solutions.

Contact us for more information.


Gap Goes Green

Sadie Keljikian, Express Trade Capital

As a result of the recent Paris Climate Talks, Gap Inc. announced that it will reduce its absolute greenhouse emissions by 50% by the end of 2020. The White House said of the gathering that “[t]oday, more than 190 countries came together to adopt the most ambitious climate change agreement in history.”

Though the ultimate extent of the agreement’s impact is still undecided, the Climate Talk’s proposals singled out the apparel industry as a particular industry of concern. In terms of manufacturing, the participants were particularly concerned about the wasted and polluted water, toxic chemicals in dyes, and massive quantities of landfill produced by more disposable clothing in recent years.  Moreover, the industry relies on significant power usage and packaging in manufacturing and delivering its goods.

In response, Gap Inc., owner of Gap as well as Banana Republic, Old Navy, Athleta and Intermix, issued a report mandating halving emissions over the next five years. Representatives from the company claim that the reductions will be made throughout all of its subsidiaries, meaning that retail stores and factories alike will be revamped with a more conscientious model.

A significant part of the changes to take place will be measures to save electricity in the retail locations owned by the company, of which there are more than 3,000. Gap Inc. plans to replace light bulbs with more efficient LED lights, use smart thermostats, turn off unnecessary lights at night and use an industry shipment program to limit fuel wastage.

With a large portion of these improvements coming from energy usage, Melissa Fifield, senior director of sustainable innovation at Gap Inc. says: “The beautiful thing about energy savings, unlike some other areas, is it’s very directly tied to cost, and as the cost of energy goes up, there’s an incentive in the business to save that energy as well.”

Gap also plans to divert 80% of the waste from its domestic facilities away from landfills by recycling clothing materials as well as boxes, hangers, and plastic packaging used to ship merchandise.

But Gap isn’t stopping with environmental responsibility. Shoppers have shifted their focus away from cheap goods and have begun to gravitate toward companies with more ethical practices. Consumers consider whether factory employees worked under fair and safe conditions. Gap says they also plan on making a more concerted effort to manage the safety and well-being of factory employees abroad as they enact their new, kinder model.

Visit ETC’s website for financial and logistical solutions.

Contact us for more information.


Cambodian Factory Pactics Breaks the Mold

Sadie Keljikian, Express Trade Capital

Dutch factory owner Piet Holten, president of Pactics, a manufacturing company in Cambodia, is creating a modern, conscientious model for manufacturing companies in Southeast Asia.

Cambodia has the second highest number of non-government organizations (NGOs) which aim to stimulate local employment by supporting workshops that make goods for tourists. Unfortunately, Holten says the “NGOs are trying hard to do good. They have a good heart, but in the end the effect is minimal.”

Pactics manufactures soft cases and microfiber cleaning cloths for glasses, sunglasses and goggles. Their clients include several high-end brands including Oakley, Rayban, and Tiffany. Contrary to the unfortunate standard of manufacturing in Southeast Asia, Pactics places a high-emphasis on employee well-being as well as the environment.

The naturally lit, wheelchair accessible factory derives 40% of its power from solar panels. Power is supplemented with a backup generator, which runs on biofuels. Rainwater is collected and used for plumbing purposes and there is a purification plant for drinking water on site. The workforce, which is mainly young women, receives a daily subsidized lunch, four months of paid maternity leave, health insurance and accident insurance. The facility also contains a daycare with rooms for nursing mothers and a first-aid room with a staff nurse.

Interestingly, Pactics pays its employees based on productivity, a practice which has allowed factories to pay their employees as little as possible historically. However, Pactics staff not only have a minimum guaranteed income of $125 a month, far more than the national average of $1,000 a year, but they also receive 44 days of paid vacation per year. The business also offers genuine upward mobility, with training programs that not only address basic things like machinery operation, but also relations within the workplace, sexual harassment education and prevention (Pactics has a very strict policy against harassment), and hygienic use of restrooms.

Pactics also contributes $50 per year toward each employee’s education and pays for half the cost of a crash helmet for each. The crash helmet is a necessary safety accessory for the workforce, as they commute primarily via motorized scooter in a country notorious for its highly dangerous traffic.

Creating an efficient and happy workforce means that employees are more likely to stay and improve, allowing the factory to run better and the staff to become better acquainted with this type of work. With the factory running smoothly, Holten says his next mission is to convey the importance of responsible business management to his clients, in hopes that they will make more active choices to support ethically run factories.

Visit our website to learn about ETC.

Contact us for more information.


Express Client Featured on The Steve Harvey Show

Urban Intimates, a company founded and operated by wife and husband team Psyche and Vontoba Terry, is being showcased on The Steve Harvey Show today (EST 3pm – WNBC). Express Trade Capital has financed and supported the growth of Urban Intimates since early 2014.

Psyche will appear and represent her line on the show. Today she is a successful designer and entrepreneur who rose from humble beginnings in Michigan to build a brand that is now sold in over 3,000 retail locations. Her lingerie brand, Urban Intimates is tailored to women with curves, a traditionally under-served group in the lingerie category. Among other topics, Psyche will discuss her keys to success. A short blurb is available directly on Steve Harvey Show’s website.

In NYC market you can watch Psyche and Urban Intimates on the Steve Harvey Show today at 3pm EST on WNBC. Showtimes in your other regions are available here.

In addition to lingerie, Urban offers a line of skincare products.

Express is proud to be part of Psyche and Vontoba’s success.

 

Visit our website to learn more about Express Trade Capital.

Contact us for more information.


Macy’s Announces Cuts After Brutal Holiday Season

Sadie Keljikian, Express Trade Capital
With overseas markets in turmoil on Wednesday Macy’s announced that approximately 4,500 jobs will be eliminated, roughly 3% of its total workforce, as part of a significant restructuring move. According to Macy’s, a surprisingly weak holiday season has hurt the business’s bottom line.

The struggle to keep sales up has been felt throughout brick and mortar retail businesses this winter, particularly at Macy’s, with sales falling 4.7% in November and December. With temperatures higher than they’ve been in years, consumers were not looking to buy outerwear as early in the season, or in as large quantities.

In addition to unseasonable weather, Macy’s faces fierce competition from heavy discount retailers like T. J. Maxx and “fast-fashion” brands such as H&M and Zara. Fast-fashion refers to brands which produce and sell garments at an accelerated rate, allowing for mid-season merchandise adjustments when necessary. The shift to predominantly online shopping has also hurt the business, with online giants like Amazon gaining increasing market share. A stronger dollar is taking some of the blame as well, as Macy’s claims that international tourists have curbed their spending as a result.

Cutbacks will be distributed among some 3,000 store employee positions, 650 back-office positions, and 165 senior executive jobs, as well as a call center in St. Louis, which will be closed.

Along with downsizing the workforce, Macy’s plans to eliminate 36 of its department stores in favor of new off-price locations known as Macy’s Backstage, introduced last year. The company also plans to open new Macy’s and Bloomingdale’s stores in Abu Dhabi in 2018.

Visit our website to learn about ETC’s financial solutions.

Contact us for more information.


Vietnam Climbs Garment Supply Chain

Sadie Keljikian, Express Trade Capital

After a prolonged malaise, Vietnam’s manufacturing industry has re-emerged as a significant player in the global clothing supply chain. For years, the Vietnamese garment industry has suffered a shortage of local raw materials stymieing opportunities for growth. For instance, its garment economy requires 400,000 tons of cotton for production per annum yet only 3,000 of it is supplied by the local market. As such, the industry has had to rely costly imports.

Previously, Vietnamese manufacturers focused on developing and showcasing their specific strengths in the field, rather than devoting to develop a competitive advantage in the field. As a result, a combination of a lack of raw materials and minimal systematic assistance led to underwhelming profits and very little business growth.

No more. Industry analysts have proclaimed that Vietnam’s manufacturers have entered the “cutting and sewing  stages of the global supply chain, meaning that the need to import raw materials will no longer limit the growth of the local garment industry. Supply chain integration will allow Vietnam to join other countries in the process of turning raw cotton, wool, etc. into finished garments while diminishing costs.

Several new factories and sewing plants will be built to accommodate the newly expanding industry, but it will be quite costly. The plan will, in all likelihood be easier to accomplish if the Trans-Pacific Partnership is fully passed, as the deal promises to eliminate or dramatically diminish tariffs and other trade-barriers among members.

Click here to learn how ETC can help you manage your supply chain.

Contact us for more information.