Fashion and Feeding the Financial Food Chain

Miles Socha wrote a great article in Friday's WWD about the problems designers face when trying to raise money to launch a label. Everyone knows fashion is a risky business, but I was surprised to read that even those with a proven track record, like Phoebe Philo (who made Chloe a hit) and Hedi Slimane (who built Dior Homme from pretty much nothing), won't find it easy to get backers for their own lines until they're in the $5 to $10 million sales bracket. Lars Nilsson (formerly Nina Ricci) Patrick Robinson (Perry Ellis), Proenza Schouler, Narciso Rodriguez, Hussein Chalayan and, even Jil Sander are, according to WWD, among the other designers looking for -- and finding difficulty getting -- backing.

Then I was reading Portfolio (newly landed in London) and was thinking about how little of this new business magazine was actually about business, as in making something and selling something -- it's all hedge funds and private equity making news today. (Yes, I recognize this is not a huge revelation).

Of course, it's absolutely right for institutional investors investing on the behalf of others to insist on both a threshold of sales and a track record -- they've got targets to hit and clients to answer to. But we wouldn't have all these hedge funds and private equity firms if there hadn't been some little person somewhere who, once upon a time, had an idea for a widget and formed a company that would later be merged, acquired, de-acquired and so on. In fashion we're scraping the bottom of the barrel when it comes to new names that can be relaunched.

So I'm urging anyone reading this who spends most of their day tracking numbers on a computer screen while making loads and loads and loads of money to reconsider your fourth holiday home and decide instead to back a start-up. Pick something close to your heart, be it a designer, a literary magazine, or a new web site. Find someone who has talent and a strong work ethic, and make a donation. Don't insist on 50 percent equity (but by all means make sure someone is on board to watch how the money is spent), don't worry about your exit strategy. Consider it philanthropy. (Hence the word "donation.") No, you won't get a tax break. But, hey, you can afford it. Remember that without a steady stream of new businesses in the incubator, the financial food chain will simply run dry. And Phoebe Philo, if you're reading this, please get in touch. I know of an interested party.

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