Claret Showroom

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

2006


Location

London

Industry

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. Partners include the likes of ASOS, Urban Outfitters, YOOX Net-a-Porter and Selfridges. Claret runs quarterly sale campaigns in both London and Paris showrooms, inviting retail buyers to see new styles and pre-order for the upcoming season.

Founded nine years ago, Claret has been growing quickly over the last four years. Appearances at Sydney Fashion Week were among many pivotal moments for co-founders and directors Alex and Claire. However, Claret's growth was putting a strain on cash flow. Alex and Claire didn’t want cash flow to throttle their growth - so they set out to find a solution.

Claret Showroom
Claret co-founders
The challenge

As a distributor for brands in new markets, Claret buys stock direct before re-selling to retailers. Expansion led to strong gross margin increases, but Alex and Claire began to 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 Claret 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 Alex and Claire's requirement for working capital. 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, including an invoice discounting facility from HSBC and private equity investment. They found that invoice discounting would require them to discount all of their invoices, which didn’t give them the flexibility they were looking for; in addition, they would have been charged for services they wouldn't necessarily have used.

Like many other small business owners, Alex and Claire were reluctant to give up control of their business in the form of equity. Another associated issue was the finance options that insisted on personal guarantees. For most people who want to keep their business separated from their private life this is a major issue. But then 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 personal guarantee requirement 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 after becoming a Growth Street customer, Alex and Claire began to need further funds to support their cash flow and grasp new investment opportunities. Claret's success required 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 future, including further expansion online 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 accompanying Alex and Claire on their journey.

Claire Spencer-Churchill

Co-Founder & Director

www.claretshowroom.com

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