Claret Showroom

Overview
Growth Street helped ease pressure on Claret Showroom's cash flow as the founding team scaled the business
Established

2006


Location

London

Industry

Fashion wholesale and distribution


Who are Claret Showroom?

Claret Showroom is a fashion wholesaler and distributor. The business predominantly works with brands in the UK, Europe and Middle East, and helps brands grow their awareness and commercial performance in new markets. Partners include the likes of ASOS, Urban Outfitters, YOOX Net-a-Porter and Selfridges.

Founded in 2006, Claret has grown quickly, and now boasts showrooms in London and Paris. However, Claret's growth had begun to put a strain on cash flow. Alex and Claire didn’t want working capital issues to throttle their growth - so they set out to find a solution.

Claret Showroom
Claret co-founders
What was their challenge?

As a distributor for brands in new markets, Claret tends to buy stock direct before selling on to retailers. Over time, Claret’s growth meant that Claire and Alex were able to increase Claret’s gross margins - a real accomplishment in a competitive marketplace.

But success created new challenges. Typically, Claret’s supplier payments go out before payments from retail customers are collected. Thus, as Claret’s order book grew, so did Alex and Claire’s working capital requirement. The founders could see that without access to finance, they might be forced into slowing down their growth.

How did they find a solution?

Claire and Alex investigated several options for financing, looking at invoice discounting facilities and private equity investment. They found that invoice discounting might require them to discount all of their invoices - that wouldn’t give them the flexibility they were looking for. And like many other business owners, Alex and Claire were reluctant to cede control of their business by giving up an equity stake.

But then Claret came across Growth Street, and the potential fit seemed clear. GrowthLine, Growth Street’s flagship business finance product, works much like an overdraft; once a business is given a facility limit, business owners can draw down funds and make repayments as often as they like in any given month.

Claret showrooms
Claret showrooms
Claret showrooms
The banks were fairly unaccommodating even though we had a business that was showing good profit.” - Claire Spencer-Churchill
How was working with Growth Street?

Growth Street provided a solution to Claret's growing pains. The team at Growth Street were able to move quickly to progress the deal, minimising uncertainty for Alex and Claire.

Reflecting the strength of Claret’s partnership with Growth Street over a number of years, Claret’s GrowthLine limit has increased by 16x since they first became a customer.

What does the future hold?

Claret Showroom has big plans for the future. An e-commerce offering is now live, creating an additional revenue stream. The pair’s entrepreneurial streak is still alive and well, too: in 2016, they established Splash Paris, a European trade show focusing on resort wear, which continues to grow. At Growth Street, we couldn’t be more excited about what lies ahead for Alex and Claire.

Claire Spencer-Churchill

Co-Founder & Director

www.claretshowroom.com

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