Without Showrooms, Most Fashion Designers Would Remain Unknown

In just a few years, fashion designers, buyer stores and the showrooms that connect them have all reached an all-time high. How did it happen?

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On the afternoon of April 13, Lin Jian was at Shitang when a text arrived from Huang Zhifeng, CEO of the clothing brand ZUCZUG. It was a "congratulatory message." Huang wrote: "Shitang's products fit the market better and better." Shitang is a short-run fair held during Shanghai Fashion Week. You could loosely call it a showroom, but the more accurate term is trade show. Since April 2014 it has run for three consecutive seasons. Lin, a fashion critic and one of its co-founders, has more or less copied the format of showrooms abroad: during fashion week, designer brands exhibit in the showroom, and buyers come to talk and place orders.

Shitang

Lin was glad to share the message because ZUCZUG, which Wang Yiyang founded in 2002, is one of China's earliest designer brands. ZUCZUG stores now fill mainstream shopping malls. It has made it. The Wall Street Journal once described Wang as "a designer with a head for business." Showrooms such as Shitang and Ontimeshow want to repeat that commercial success for more designer brands. Their method is to build an offline marketplace that brings designer brands and buyers together. Brands get a chance to explain their clothes; buyers can find suitable products in a crowded space and touch the fabrics themselves, which feels nothing like watching a show from beside the runway.

During this season's Shanghai Fashion Week, showrooms including Shitang, DFO, Ontimeshow, FDC, VDS and T to the Power of n all drew sizable crowds. The fashion week's organizers joined in too, setting up their first official trade show, "MODE Shanghai," and inviting several showrooms to take part. They said they hoped to "build a commercial platform that promotes trade connections and cooperation for buyers and industry professionals from around the world."

One reason people have started to think about how money moves through the fashion business is that China's pool of designers is deeper than ever. After Wang Yiyang and Ma Ke came Du Yang and Xander Zhou, whose names appeared in 2008 in the British style magazine Dazed & Confused. Uma Wang, Haizhen Wang, Zhang Na (Fake Natoo), Helen Lee, Vega Wang and others followed close behind, appearing in all kinds of fashion magazines, many of them Chinese-language titles.

Their names are all recorded in Fashion China, a new book by a British author, but the book does not say whether any of them has turned a profit in their markets. When we interviewed Haizhen Wang last week, he said the brand he founded five years ago had only just broken even. And that was after he had won the Fashion Fringe prize, become famous and found sponsors.

In fact, they have a good chance of making money. The market is moving so fast that people used to buying big-name labels soon wanted designer brands too. "We saw designers' clothes in fashion magazines back then, but we couldn't buy them," said Tasha, one of the people who run Dongliang. So that she could buy them, she helped found Dongliang in 2009: a concept store stocking many designer brands, with the goods chosen by buyers, which is why such shops are called "buyer stores." According to 2015 figures released by the property consultancy RYD and Guanchao, China has nearly 300 buyer stores.

For now, buyers are still the people best placed to help designers make money, if only because they are willing to sell clothes whose styles and prices are not easy to approach. At this year's Ontimeshow, Tasha and Lorenzo Hadar, founder of the Los Angeles buyer store H.LORENZO, told the media together: "Compared with designers, buyers are more like the people who create trends. It isn't the designers telling the story; it's the buyers who put different brands side by side and tell the story to consumers together."

These stories can give a brand influence, and in the end turn that influence into sales. In 2011, after Lane Crawford stocked Valentino's "Rockstud" shoes in Beijing and Hong Kong, customers formed long queues. In an interview two years ago, Lin Jian praised Lane Crawford for balancing "taking in the work of important international designers" with "picking out the most practical goods." In other words, it understands designers, and it understands the market.

So it goes: buyer stores hope to become the next Lane Crawford, and designers long to become the next Valentino. Showrooms intend to introduce them.

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What kind of setting suits a meeting between brands and buyers? Despite some criticism, Lin Jian and his partner Yang Jiong still believe Shitang has built a good one. It is a more open, short-run trade show that any kind of brand can pay to join. A year-round showroom is different: most of the brands DFO shows, for example, are ones it represents all year. "We want to make something inclusive," Shitang said at the outset. After last season, people complained that all this inclusiveness had turned the fair into a mess.

Things have changed. Shitang says that, a year and a half in, it has become the smartest choice for buyers, because it now screens brands by style and accepts 50%-60% of applicants. Beyond a brand's credentials, the screening rests mainly on a reading of today's market for designer fashion, so that even a newcomer who has just opened a store would rarely go badly wrong buying here.

Yang Jiong believes that 60%-65% of the brands shown at Shitang have styles that suit the mainstream market. The core customers of that market are what Lin Jian calls "people who used to wear LV." Zhu Weiming, founder of another showroom, T to the Power of n; Jiang Hao, founder of the Chengdu buyer store Sihe; and Zhang Na, designer of FAKE NATOO, all described the core customers in similar terms.

The other 30%-plus of brands are there to test new styles, and naturally the orders they win at the fair may disappoint. In October 2014 the designer Yili brought her women's wear brand, recently launched in London, to Shitang. She found that the important buyers still headed for the booths of well-known brands. Even after the fair ended, only a handful of buyer stores told her they were interested in working together.

Figures Shitang published in November 2014 put the total value of orders placed at its previous season at 77 million to 90 million yuan. But a British agency-style showroom, Project Crossover, and the Taiwanese designer brand Daniel Wong both said they doubted where that number came from. After Shitang ended, Daniel Wong set up another booth at DFO, a year-round showroom. Drawing on its year-round experience, DFO has dedicated staff who introduce the brands on show to buyers, so the brands need not worry about it.

Asked how many orders the fair produces, Lin Jian said that Y's, Yohji Yamamoto's diffusion line, took 200,000 to 300,000 yuan in orders within an hour last season. Shitang has since become Y's agent in mainland China. "But some brands are not mature," Lin said. They should treat a showroom as a business internship, he said: learn from buyers' rejections, and use the deadline to make themselves finish the new season's collection on time.

Seen this way, what a fair actually does for a brand varies widely. The most organizers can probably offer is better service on the surface: lighting, décor, internet access and fuller feedback. Another fair, Ontimeshow, keeps collecting feedback from brands and buyer stores after it closes. Its founder, Gu Yeli, says this takes a great deal of time, but the collection is fairly casual and, like the order figures, has no statistical value.

Designers also want somewhat larger standalone booths so they can show as much of a product line as possible. Space limits usually make this hard, as at this season's "MODE Shanghai." The showrooms that exhibited there, "Alter" and "DFO," each showed only a token handful of distinctive looks, while working hard to promote the addresses of their year-round showrooms.

Since its first season, Ontimeshow's Gu Yeli has tried fully open booths with no partitions at all. This also makes efficient use of the floor. "For buyers, browsing is a real pleasure, and every angle is clear," said Gu, who besides running the fair is art director of a film and television company. A senior buyer who asked not to be named said Ontimeshow's mix of brands and its size were both comfortable, but that he preferred Shitang's partitioned booths because they make it easier to talk with brands. Partitioned booths are also standard practice internationally.

Another approach is to charge less rent or lower service fees without letting service slip. Both Showroom had planned to join Shitang this year, but chose "MODE Shanghai" because Shitang charged too much. Lei Yun, who runs Match, a Hong Kong showroom that exhibited at Shitang, said a booth in Shitang's international section cost four to six times as much as one at the fair held alongside Hong Kong Fashion Week, yet she found the service unremarkable and the basic facilities rather poor.

This year's newcomer, "T to the Power of n," is free for designer brands, and quite a few brands that showed at Shitang last season moved there. (By coincidence, both fairs chose the same venue, Building 3 of Corporate Avenue in Xintiandi, and Xintiandi gave both the space free as sponsorship.) Its founder, Zhu Weiming, said that when he invited the designer Masha Ma, she was sorry to decline: "Why didn't you say so earlier? We've already signed with Shitang," Zhu recalled her saying.

Designers need to understand that in the market, demand at the end of the chain usually has the final say. So although showrooms charge designers, they depend more on buyers. Shitang uses this to justify its high fees: the money may not show up directly as service to brands, because it goes to training buyers. In May, Shitang will run a free buyer course lasting more than twenty days. "Relatively speaking, our most important customers are buyers, not brands," Lin Jian said.

DFO's founder, Ye Qizheng, said the same. "Whether it's a showroom or a trade show, the quality and number of buyers is what you compete on," he said.

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The odd thing is that top buyers may not need showrooms much, and neither may top designers.

Jiang Hao, founder of the Chengdu buyer store Sihe, describes his Shanghai trip like this: on the first day he watches shows; on the second he visits designers' studios or showrooms, then wanders through other showrooms to see new brands and to see how this young industry is doing in China. But like most buyers from abroad, he does not order on the spot, and those foreign buyers may watch a brand for a whole year before ordering.

Without extra services, the traditional trade fair will struggle. At the very least, the internet has made it far less necessary as a way to exchange information. Designers have more ways than before to find buyer stores' contact details, and can send an email with their lookbook attached at any time. On his busiest day, Jiang Hao received eight emails from designers pitching themselves. Wuhao, a Beijing buyer store founded in the spring of 2010, was tucked away in a courtyard house in a hutong until the end of 2013 and since then has mostly run pop-up shops. It too has gone from "Wuhao looking for designers" to "designers looking for Wuhao." "Quite a few brands and designers now approach us on their own, hoping to work together," said its founder, Virginie Kompalitch.

Wuhao

Even when both sides do attend a fair, they often bypass the organizer and arrange to meet in advance. Match Showroom and Project Crossover invited their own key clients rather than relying on Shitang. Yang Jiong said Shitang indeed sent no formal invitations to any buyers, relying instead on registration. Lei Yun was a little unhappy about this, but she also knew perfectly well that the event was more of a client get-together that fashion week happened to make possible. Chen Rong, founder of Project Crossover, said: "We need to show clients that we are keeping the brand active."

More established designers prefer to open their own showrooms, even though they also turn up at fairs. Zeng Siyu, a buyer for the store Bohe Nuomi Cong (BNC), went to Shitang specifically to see Ban Xiaoxue's work, but said she would not place her order with Ban there; she would go to Ban's showroom in Guangzhou, which carries her full collection. After Shitang's international section ended, Haizhen Wang set up a four-day personal showroom on Yongjia Road, which he thought would bring in more of the visitors who matter.

In theory, a personal showroom serves mainly to keep up relationships with existing clients and follow up on orders, while a large fair lets a brand meet more new faces. The two complement each other. The problem is that there are not many good buyers worth meeting. Beyond a few well-known buyer stores, it is hard for a designer to tell from a single fair what these scattered new outlets really mean for the brand.

Imran Amed, founder of The Business of Fashion, has listed what designers need to know about a buyer store: a clear customer base; other brands of matching standard and style; the services the store offers beyond selling; and a guarantee that the store will pay. None of this can be learned at a fair. If designers do not find out, "it's still the same as wholesale," said Zhu Weiming. A designer need only picture Qipu Road in Shanghai or the Zoo wholesale market in Beijing to see how one careless move can cheapen a brand.

For buyers who are still growing, fairs may matter more. "Showrooms (fairs) are for buyer stores that are just starting out, not for established ones," said Dongliang's founder, Tasha. Counting these new buyer stores, Yang Jiong estimates that China has more than 1,000 of them; he has more than 600 of their contacts on WeChat alone. They need more information about brands, and a showroom is a good way to get it. Its biggest advantage is that it puts a dense concentration of real products in front of them, and designers are usually eager to find them.

Dongliang rarely works with domestic showrooms. As one of the first buyer stores to grow up in China, it got to know designers before the domestic showrooms did. To keep track of emerging designers, especially Chinese designers who launched their brands abroad, Dongliang usually places its orders in Paris, which comes earlier than Shanghai Fashion Week in April and October.

Two seasons ago, Dongliang held its own "Dongliang Day" during Shanghai Fashion Week with six designers it works with. This May, it will take several designer brands from its store to the Los Angeles buyer store H.LORENZO for a pop-up shop. Lane Crawford is also building a platform outside the showroom system. In May it will hold an "open day" in Hong Kong and another in Shanghai, where designers can bring their work to meet Lane Crawford's buyers and creative team.

For a fledgling designer brand that wants a "business internship," a showroom is not the only choice. An established buyer store can also serve as a testing ground. Bohe Nuomi Cong and Dongliang both scout emerging designers and show their work in store from the first collection they make before graduating, so the designers can learn from the market what they need to improve and where they fall short. Of course, the bar is high. "Each year we can only throw everything into promoting one or two newcomers, as a whole package," Tasha said. Consignment, where the store takes a commission instead of buying the stock, is certainly far easier to get, but buyer stores generally give such products no extra push.

One advantage of gaining market experience through a showroom is that a showroom serves the whole country, while a buyer store is regional and may cause a designer brand to miss opportunities far away. "A buyer store depends on where the store is; a showroom looks at all of China," said Jac van den Heuvel, operations manager of Alter showroom. Alter is also a buyer store that has operated in Shanghai for five years, but van den Heuvel said the brands it sells in the store do not fully overlap with the brands its showroom represents.

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Zhu Weiming, founder of "T to the Power of n," is attempting an unusual kind of matchmaking, one that would take designers off the "designer, showroom, buyer store" track, if he can pull it off. "There are still too few buyer stores, and designers don't have to get into buyer stores," Zhu said. He comes from the leather trade. Although in September 2014 he opened his first buyer store, "N to the Power of n," in Xintiandi Style, he is more interested in solving designers' production problems and getting their products into commercial distribution.

T to the Power of n

Christophe Terzian has managed both. The French designer brand, represented this year by "N to the Power of n," held a runway show in Xintiandi on April 10. Last year it sold mainly through commercial brand stores and boutiques, with fabric and workmanship supplied by Zhu's leather company.

Zhu hopes to find more Christophes through "T to the Power of n." He charges designers no rent or service fee and instead takes a commission on sales, the model usually used by year-round showrooms. But this kind of deep cooperation turned out not to suit a short-run fair. "(I heard) some designers being told, if you don't go with them (T to the Power of n), I'll give you a 10% discount," Zhu said. He had planned to follow up afterwards and solve designers' production problems; if things went well, he would then work with designers to develop new brands or make private-label goods, and run a boutique wholesale business.

To the fashion world, this plan sounds "bittersweet." We know, of course, that fashion is no longer "all about looking good, never mind the discomfort; all about consumption, never mind production." Production is a widely acknowledged weak spot. In an earlier interview, Ye Qizheng named three problems with domestic designer brands: high prices, deep discounts and high minimum orders. "This also has to do with the domestic supply chain," Ye explained. "Factories generally take only large orders, and designers have to work that out for themselves."

According to Zhu, his leather factory and his Italian fabric partners once served Gucci, Armani and Chanel. They are now making clothes for more than ten designers, each of whom orders only one or two pieces (there is no minimum order), and they help produce ready-to-wear for designers such as Li Na. He also said that Masha Ma visited his factory in Haining and "felt that working this way is what makes being a designer interesting." At the fair, Zhu exhibited fabrics. "It's important to give designers a feel for fabric," he said.

In having an advantage upstream, Zhu's background resembles that of Zhang Longjiang, who runs the buyer store Seven Days. Zhang has been in the fabric business since 1991 and also supplies fabric to international brands. In 2008 he formally acquired Seven Days in Hong Kong. But "N to the Power of n" has no Seven Days to learn from; Zhu's experience comes from highly commercial boutiques. That could easily push designers too far the other way.

At "T to the Power of n," nearly all the clients Zhu invited came from brand companies, high-end boutiques and shops selling European goods. Their minimum orders usually exceed 2 million yuan, and because boutiques selling foreign brands are doing worse, they are eager to turn themselves into buyer stores. But in all likelihood they understand a buyer store the same way Zhu does: "showier décor, more posing," with the number of clothing rails on display set by sales figures rather than by how to present a brand's collection in full.

If so, this new showroom may not be an unmixed blessing for designers. They will have to think again about Imran's three pieces of advice: customer base, brand mix and services. The guarantee of payment, at least, does not look like a problem.

The fashion world's business teacher also has this advice for young designers: "Building and growing a brand is a long-term undertaking. Five years, even ten, is a short time. Be patient and don't rush. Design is only one link in fashion. Turning a design from two dimensions into three takes more than design alone. Make your work more complete, raise your production capacity, and grow slowly and carefully, one step at a time."

That advice applies to the whole fashion industry, too.

Images courtesy of DFO, Wuhao, Dongliang and RYD