TRICKY BUSINESS 2
PROGRAMME 3: BELLE & BUNTY
The entrepreneurs
Alice Shreeve and Hannah Coniam are the designers behind Belle & Bunty. Their childhood nicknames inspired the business name – Alice answered to Belle and Hannah to Bunty. Graduates of the London College of Fashion, they set up in business together in April 2003 and launched the Belle & Bunty label. Since then they have been slowly building the business, supported by their manager, and Alice's partner, Toby Meadows. Alice and Toby have a young daughter called May.
The business
Belle & Bunty's turnover is £112,000 a year. Its core product is designer womenswear. It produces stylish clothing at a price accessible to most working women. Production and marketing cycles follow the two fashion seasons – Autumn/Winter and Spring/Summer. Each season around 800 garments are hand made in India. Sold in small high-fashion boutiques, they retail at £220 each. The profit on each garment is £70 or 30%. Although average for the sector, this profit margin barely covers basic business costs. The business relies heavily on 'a family of support' and regularly 'pulls in favours'. Alice, Hannah and Toby pay themselves no wages and have part-time jobs to make ends meet. Alice and Hannah work as freelance designers. Toby is a part-time lecturer.
The business problem
Although it has been trading for three years, the business has yet to make any money. Alice, Hannah and Toby want to secure investment so that they can expand, pay themselves a wage, and concentrate fully on developing the business. The problem is that it will be difficult to find an investor willing to buy into a small fashion label that is worth very little.
The business solution
John advises the team to secure a licensing agreement with a major retailer. This will:
- put them in the commercial arena and demonstrate that they have long-term growth prospects
- help them to increase sales, gain publicity and build their press profile
- locate production responsibilities elsewhere and allow Alice and Hannah to concentrate on design
- boost their profits and business value, enabling them to retain a bigger share of the business when they find an investor.
The outcomes
The Belle & Bunty team follows John's advice. Developments are relatively slow but things look promising. The label has celebrity endorsement. The business has a clear strategic direction and the team is negotiating for a licensing agreement with a leading retailer.
