Leading hospitality and spa uniform designers Fashionizer welcomed two senior government ministers to its London headquarters on Monday. Deputy Prime Minister Nick Clegg and Secretary for Business, Skills and Innovation Vince Cable were visiting Fashionizer as part of a new government initiative to provide funding to SMEs. The visit coincided with the announcement that the government is to fund the British Business Bank to the tune of £250million, in addition to the £1 billion announced last year.
Fashionizer couture uniform designers, who are headquartered in Chiswick, West London, specialises in the creation, manufacture and distribution of luxury uniforms in the hospitality and spa sectors. The company was one of the first to benefit from British Business Bank funding last year through peer-to-peer lenders Funding Circle.
Nick Clegg said yesterday: "Small businesses are the lifeblood of the British economy. We must not forget that the majority of people in the private sector are employed by small companies, and they are playing a vital role in helping our country on the road to recovery. In order to grow, succeed and employ more staff, smaller companies need access to finance, and unfortunately they too often struggle to get the investment they need. This is why initiatives from the Government like the British Business Bank will make an important difference.
"Companies like Fashionizer have to be able to grow through trying new ways of borrowing. Fashionizer is a superb example of how small businesses are investing, growing and demonstrating excellent British quality on the world stage. The team are incredibly proud and enthusiastic about what they do, and rightly so."
Fashionizer's Funding Story
Three years ago Fashionizer identified a gap in the market. At the time, the company's focus was largely European, but they realised that the requirement for top-quality, stylish uniforms with a high level of account management across the hospitality and spa sector was a worldwide opportunity. They also knew that in order to penetrate the global market successfully they needed to invest a substantial amount of time and to conduct significant development work. They had to be in for the long-haul, but the rewards would be there if they did so.
In challenging economic times, many banks are risk-averse and are reluctant to invest in businesses, especially those that are slightly unconventional . For a business such as ours to grow securely, they needed a financial commitment that was in line with the realities of our market – and that meant agile finances and a longer-term investment.
As a business-to-business company they are driven by clients' and potential clients' schedules and budgets. This means that the best time to pitch for business is when a client has strategically planned to refresh its uniforms – and this could be as much as every five years or more. They need time to secure new business, from identifying potential clients, to meeting them, presenting proposals and eventually working with them on a project. This process can take a few years.
Although they had a clear strategic growth plan, this unfortunately coincided with the economic slow-down, and they found ourselves treading water. They approached their bank, and even though they could offer security, the bank was only able to look at the past and not to the future. In order to consider any further support for the company, they would have been required to provide extensive information and invest in a time-consuming process which did not have a guaranteed result or end date.
They then became aware of the concept of crowd funding and of the government-supported Funding Circle in particular, which was set up in 2010 to facilitate lending to SMEs. Their application to the Funding Circle was a swift process: within two weeks of applying, they had secured funding, becoming one of the first companies to benefit from the government investment scheme. They were able to continue the campaign to grow Fashionizer into a worldwide brand.
An example of this is the new contract they have just secured with Six Senses Hotel Resorts Spas to provide uniforms for their staff worldwide, which is Fashionizer's first global deal. They first started talking to them in June 2012 and are now on track to complete the supply of uniforms to them by the end of 2014, so the whole process has taken more than two years.