Perhaps a bit unorthodox on our end, we’ve done a little news reporting. Enjoy.
When business was booming, Jake, a Chicago-based retail chain consisting of three boutiques and a website, garnered a robust reputation for scouting out emerging labels like Burkman Bros. and Engineered Garments and propelling them into the mainstream. But barraged with dwindling sales figures for the past several seasons, Jake has had to cease risk-taking on the young guys, and start to sell the better-known labels at cheaper prices.
“We’re certainly not trying to go as mainstream as some stores, but we really have to look at what our customers are buying and what they’re telling us,” Lance Lawson, the co-director of Jake, said.
Lawson says that his job is now more a post concerned with selling what customers like than the once esteemed position of selling what Lawson thought customers ought to buy.
Part of the reason boutiques like Jake are less willing to take risks with labels stems from the way the payment process has changed since the recession.
In past years, stores had contracts with the labels to pay them back in time-spans like 30 days, but with the onslaught of economic strife, “every designer,” as Lawson puts it, “is so burned by people not paying them or bounced checks that they are pretty much operating on prepayment.”
This means that startup labels want the security of payment as soon as their collection goes out to the stores, which takes a chunk out of the traditionally entrepreneurial, almost thrill-seeking tendency of boutiques in selecting their labels. Because boutiques have to pay for whole collections up front, they do not have adequate resources to order new garments from tons of new designers and they risk losing a lot, so instead, they have to stick with the companies that are more mainstream.
Lawson acknowledges that on the designer’s side of things, it makes sense to want payment right away – after all, they should theoretically be getting paid for their product, so it makes little difference when.
“I think everyone thinks we get a box of clothes in and suddenly we forward them the money. And the reality right now of us turning merchandise quickly enough to pay people at that point, it’s just not there,” Lawson said.
Worse yet, prepayment endangers the boutique when the merchandise is poorly manufactured or ill-fitting.
Last July, The New York Times published a piece claiming that Jake – whose original owner, Price Allen, went under bank foreclosure – had altogether failed to pay back certain designers.
But as Lawson put it, “there’s a naïveté among these young designers that we just get their clothing, but that woman quoted in the article, Emma Fletcher of Lyell, her stuff was so ill fitting, it was insane.” Lawson believes that to prepay Lyell would have been unfair given the quality of the garments.
While Lawson believes “there is no way to get stuff going well on prepayment,” ultimately, he says boutiques will have to adapt by being more conservative in the quantity they sell. Instead, he believes stores should be buying small quantities, for which they will inevitably prepay, and restock midseason.
“The conspicuous consumption of the 80’s when people were walking out of stores with 3-4 thousand dollars worth of stuff is really over and I don’t think that’s going to come back for a while,” Lawson said. “I think that even people who have lots of money and are safe are really thinking if what they’re buying is at a good value or not.”