Claret Showroom

Growth Street helped ease the stress on Claret Showroom's cash flow as they scaled up their business into new markets





Fashion distributor

Who are Claret Showroom?

Claret Showroom is a fashion distributor representing Australian and American brands to retailers in the UK and Middle East including the likes of ASOS, Urban Outfitters, Net A Porter and Selfridges. They run quarterly sale campaigns in both London and Paris showrooms inviting retail buyers to see new styles and pre-order for the upcoming season.

A company that began 9 years ago, the company made the switch from sales agent to distributor. The company has been working with some great designers and brands, and has been growing quickly over the last four years off the back of that. Appearances at Sydney fashion week are only one of many pivotal moments for their business over the past years. However, their growth was putting a strain on cash flow. Co-founders and Directors Alex and Claire didn’t want cash flow to throttle their growth and set out to find a solution.

Claret Showroom
Claret co-founders
What was their challenge?

As a distributor for brands in new markets, they buy stock direct before re-selling to retailers. By doing this, they achieved a strong increase in gross margin but require more working capital, to fund their wholesale model.

The company pays its suppliers well before they collect payment from their retail customers. A typical arrangement would have the company pay its supplier on delivery of goods, and after selling that stock to a retailer, they would wait 30 to 60 days for payment. As the company’s order book grows so does their working capital requirement. At the point that Alex and Claire came to Growth Street they could see that without access to finance, they would have to slow down their rate of sales growth.

Finding a solution

Claire and Alex investigated several options for financing this need including an invoice discounting facility from HSBC and private equity investment. They found that the invoice discounting required them to discount all of their invoices, which didn’t give them the flexibility they were looking for, and also would have charged them for a service even when they didn’t need it.

Like many other small business owners they were not willing to give up control - in the form of equity - of their business. Another issue was other finance solutions insisting on personal guarantees. For most people who want to keep their business separated from their private life this is a major issue. This was when Claret came across Growth Street.

Claret showrooms
Claret showrooms
Claret showrooms
Banks tightened their purses just at the time we needed their support. Growth Street proved to be the most simple and effective solution for us.
Working with Growth Street

Growth Street was the perfect solution to Claret's "growing pains". No need for personal guarantees or give over their sales ledger meant that Claire and Alex remained in full control of their business, all the while having a flexible source of capital to invest in growth.

Crucially, as Claret's success and growth continued throughout 2015 they required further funds to support their cash flow and grasp investment opportunities. Along with success came a renewed need for more capital to support growth. Claret came back to Growth Street for an increase in their facility and they were able to quickly access the extra cash they needed.

What does the future hold?

Claret Showroom has big plans for the coming year including further expansion online through Grazia Shop, and into European and Middle Eastern markets. Further down the line they have their sights set on New York and LA. At Growth Street we are looking forward to being on the journey with them.

Claire Spencer-Churchill

Co-Founder & Director

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