Designers In Lockdown: Catching Up With Simon Pound From Ingrid Starnes
The managing director shares how the label is navigating the impacts of Covid-19, plus the motivation behind a crowdfunding initiative with PledgeMe
It's not yet June, yet 2020 has already proven to be a challenging start to the new decade for many businesses - and as recent weeks have shown, creative thinking and resilience across several industries is helping some segue a little easier between Alert Levels.
Through our Designers In Lockdown series and conversations with the local fashion industry, the impact of Covid-19 has prompted some brands to quickly adapt to the changes affecting everything from manufacturing to retail.
Even before the pandemic, consumers were already shopping differently, and for local fashion label Ingrid Starnes, its efforts in responding to those changes - whether diversifying its categories (fragrances and bridalwear); to designing a limited number of garments as a way of slowing down fashion's relentless cycle - has helped in some way to prepare the brand for recent challenges, particularly in a year where it is celebrating its tenth anniversary in business.
"There's just under ten of us if you count a few of the part-time staff and some of our key suppliers," says managing director Simon Pound. "We've been trying to be really open and honest and kind of draw on everyone's skills. We've tried to use the time to upskill and think about the ways we want to change the business model to be more responsive to the customers and more responsive to the world."
"There's so much work everyone does in fashion, with the collection cycle, and it's really hectic and you're always running really fast. We've taken this quiet time to do a course on design thinking, and think about some of the ways that we'll be able to talk more to our customers and get more inputs into the things that we're making, and try and do things in a more considered way.
Part of that is we stopped doing double seasons and started doing single seasons at the end of last year. At the moment people are following the Australian cycle - where you deliver summer clothes in the middle of winter, winter clothes at the height of summer- everything's on sale at the wrong times and it just doesn't make much sense."
While recent weeks have disrupted its goals of opening its new store in downtown Auckland's Commercial Bay precinct, Simon - whose wife Ingrid is the namesake behind the label and whose designs have garnered a loyal following over the years for its elegant, timeless aesthetic - is optimistic and cautious about the future, placing an emphasis on its continued support of a New Zealand made industry and those local suppliers and makers they work with- and inviting its community to be part of the bigger picture.
On April 30, the brand launched a crowdfunding campaign with the crowdfunding platform PledgeMe, inviting its community to ask if they might be interested in becoming shareholders in the company, offering between 9.01% and 19.84% of the company on a valuation of $2 million. It's a unique and transparent step forward for the label. But why now?
"So we - like lots of fashion businesses - make a season ahead of delivery, and then make all the stock and have it available to sell through the next couple of months," says Simon, speaking from their Waterview home where the couple has been isolating with their three children, twins Olya and Ned, and Gertrude. "With Covid-19, we'd just had a whole season's worth of clothes made. With the best part of two months shut, stockists are shut as well, and so haven't been able to have things delivered. Like lots of other fashion brands - we have this situation where we've made all the clothes, and aren't able to physically sell them. So that puts a whole lot of pressure on our suppliers, and the industry. And the forecast, for the next year for fashion and retail, is probably going to be pretty disrupted."
"You know, lots of people are saying we could be looking at a 25% reduction in demand and trade. So we looked at what that meant to our numbers going into the future, and just went 'heck, we're probably not going to be very viable, if this is the case', because we haven't been able to sell the last season, and we're not generating enough extra profit to cover that and then keep running the model as it's been."
"At the same time, at the end of last year - which was really exciting - we worked with Commercial Bay to take a tenancy there. That's going to be a really great retail development. There are 10,000 professionals in the towers above, lots of whom are our customers. They've worked really hard to get some small New Zealand brands in, so they've got something different to just the international chain stores, so along with our label there's also Twenty-Seven Names, Yu-Mei, Aotea skincare and Superette."
"They've got some really great local businesses that aren't usually in that kind of big development and it sounded really exciting, because there's going to be cruise ship traffic, and it's right at the center of the hub of the busy city. So between Britomart, and the Ferry Building, and Albert Street, we looked around and we thought 'this is the kind of retail in cities around the world that is working really well. You've got big chain stores that people like to go to for affordability, like your H&M and your COS, and then also really interesting and boutique offerings."
With the sudden impact of Covid-19 on businesses preparing to open new stores in Commercial Bay, being able to weather the storm is a challenge Simon and Ingrid have taken on starting with this crowdfunding initiative.
"We thought maybe we'll go out to the community, and tell a really honest story of where we are and what's happening and see if people wanted to come in and become shareholders in order to bolster the working capital, and then also help us invest in a few other things that will mean we have the right kind of products to sell to people in the right kind of way."
"When we went live with the crowdfunded campaign, we were totally floored by the response. We went out to our mailing list and the people around the business, and just said 'hey, this is happening. Would anyone be interested in perhaps becoming investors?' And the levels of support we got back was just amazing, and so many kind messages. It's a really interesting investment story because we're not saying it's going to be big growth in the next couple of years, we're saying it's going to be quite hard. We hope for that to grow and be a really good kind of investment for people in the long run, but it is something that we're being really honest about, and it's really about bringing in the community to see if it is something that people value. It's also a huge responsibility. Everyone that's been pledging and is supporting it, it's really humbling and heartening. It's a huge responsibility to then be a good business and a good investment for these people."
And like any investment, the label is also transparent about any potential risks too. "We look at it as a really big responsibility, and we wouldn't want to tell anyone if they had misgivings to invest. That's really important. The thing with crowdfunding is that they do very small amounts compared to other kinds of private investment to be able to become a shareholder. The minimum on ours is $250, and at each tier of investment there are rewards."
"So, in the near term, we're not projecting dividends, as it's going to be riding out the storm and then investing in growth for the future - that is the main plan. But in the future, the plan is that anyone who is a shareholder would have equal rights to dividends in years they're given. In the meantime, people get things like special discounts, special access to sales, extra sales discounts, and rewards like that to make sure that in the life of the investment, it is giving them rewards. They're kind of like VIP club tiers, rather than actual rights associated with being sold. What we're thinking is that if some of our customers - who do buy a number of dresses from us a year - if they were to come in on $1,000 investment and get a 10% discount, over a couple of years the discount alone may work out to be the same as what they've put in. We're definitely not wanting people to speculate, or take risks that they don't want to take risks in, but we also don't want to put anything out to the market that we don’t feel is responsible as well."
Simon's popular Business is Boring podcast has also allowed him to converse with other like-minded businesses, sharing their struggles and ideas of how to operate as responsible businesses in the process. Those conversations have helped the label steer itself into a business that's appealing for potential investors.
"I've spoken with brands like Ethique- which is the cool company that makes the hard soap bars instead of the plastic bottles for things like shampoo. Talking to Brianne West, the founder of that company, Tim Lightbourne from Invivo wines, the people from Parrotdog and Behemoth Brewing and also talking to Anna Guenther - the Founder of PledgeMe over the years; it's always been something that's been really interesting. This idea that you take your community, bring them into the company, they become advocates, but also a really valuable sounding board to find out what kind of products you should be making, what kind of things the community cares about. And operating in a more collaborative kind of fashion."
Starting the year off with plans to open is now postponed Commercial Bay store, the label's re-brand as a limited edition label - producing fewer styles in runs of no more than 100 - is also a unique offering that signals a desire by many brands to slow down fashion's traditional seasonal delivery schedule, which in recent years has become increasingly irrelevant.
"So with Commercial Bay came the opportunity for us to actually grow quite a bit. We were projecting to be a few more sales, and that would get our minimums up, so we could probably then go overseas. And that's what lots of brands do. They grow to a certain size, then once it makes sense - they're doing more than 100 or so of styles - it becomes somewhere between 20% and 40% cheaper to make things overseas.
And that extra margin that you achieve can be put into nice stores, and nice events, and nice advertising, and all the things that help build your brand value. We investigated this and had a look at what were the ethical alternatives that we could look at, and went 'we just don't want to do it!'
"The local industry partners that we've worked with, they're a big part of the reason that we're in business. They've offered good payment terms, they've taken a punt on us, and they've helped us grow over these 10 years. And we thought 'that's the thing we actually like about what we're doing". We looked around at the world of retail, and looked at what makes things special, and we really like the idea that what we make is special, unique, and on a smaller scale."
"We went on this trip last year to get married, and we visited this premium outlet mall called the Desert Hills, which is outside of Las Vegas, and it's this amazing place that has these big luxury brands, but as their outlet stores. It's not a place they just clear stuff that they didn't sell through their premium stores - they actually make special stock that they sell slightly cheaper. We saw this great big trolley of luxury tote bags being rolled into one of these stores, and there would've been thousands of them, literally spilling out the edges, all plastic-wrapped. It made us think so much of what is 'premium goods', are actually made in ways that are really similar to fast fashion."
"It used to be that a big brand was important or special because they had a great atelier, and they had artisans that had been making the things in these ways for years, but now if you get a branded sweatshirt from a real top house, it's probably made in the same factory that they make Nike sweatshirts."
"That's not a bad thing, that's cool if you love that if it means you can have access to a brand. No judgment, you're wearing Nike, do what you want to do. But we just thought, what actually makes something special is probably what goes into it. If the same things go into the highest things and the lowest things, then it's only the brand name, and maybe there's something really special in limiting what we make, numbering it, and showing the processes that go into that. And it's not about making something more expensive, we're looking to maintain the same kind of pricing structure we always have, and introduce some less expensive pieces, but just being able to shine a light on the actual processes, and the thoughts, design, creativity, and what goes into them."
"The other things we'd loved over the 10 years of the business, were the collaborations we'd had with artists, designers and photographers. So we thought it would be really cool to lift on that artist edition idea, and have things in editions of one, for our made-to-measure and bridal category, or in editions of no more than 100, and they'd be numbered like artists' editions. To really solidify that as an idea, we're doing collab artist prints each season with artists we love. We've started off this season's one with Kirstin Carlin, who's a fantastic artist that presented at Melanie Roger, and we absolutely love her work. We're just so thrilled that she was interested in doing a collab print with us."
So will the brand's crowdfunding initiative be something other New Zealand brands will look at exploring as a way of connecting even closer to its customers and community?
"I think we're just one really small part in the local industry, and we're doing our best to be made locally and made well, but there are still lots of things that we can improve on. We're definitely not holding ourselves up as that standard-bearer for everything local and everything awesome" says Simon.
"We totally think that this is a great model for lots of labels to do, and for lots of businesses to do, to bring their community in with them. The really important thing, I think, is to make sure that you're doing it as realistically as possible. The kind of things that will lose that local trust is if it is done on irresponsible valuations or without a very solid business plan. After 10 years of doing this, we've done a really - what we consider to be - conservative approach because we really don't want to overpromise and underdeliver, and it is a period ahead where there's quite a bit of uncertainty. So, I definitely recommend that people bring their community into the business and run open and transparent businesses -that kind of thing is going to have to become more important."
WATCH: Ingrid Starnes Vetyver Bergamot Campaign by Delphine Avril Planqueel
Along with its limited-edition collections designed ad made in New Zealand, the brand other categories include Ceremony, its custom made bridalwear, a capsule line of more affordable pieces and its popular line of fragrances, soaps, and lotions.
"We just really loved perfume and thought it would be kind of fun to make one. This was eight years ago now, that we started the process and it turns out, it's really quite hard. You've got to learn a whole new language, and it's a really interesting process to go through. We made one called Vetyver Bergamot that we released, and it ended up getting picked up by Monocle magazine, and they stocked it in their retail stores and called it 'one of the best products to come out of New Zealand', and that was super exciting, it was a real vote of confidence. We make them here, so the raw oil ingredients come from overseas, but we produce them here and make them. We extended that into a hand cream tube and that's been super popular, plus a range of soaps."
"With that interest from Monocle, there was all this interest from all these overseas stores, who wanted six perfumes; but unfortunately- which we probably should've worked out before we did it - perfume in glass bottles is treated as a dangerous good because it's pressurized alcohol inside a glass. They treat it like a grenade for shipping. You've got to get special UN-certified dangerous goods shipping documentation and stuff, so it only becomes economical to ship it overseas if you're sending enormous quantities. So export was a really challenging one. We looked at it again as an idea, and we had this concept to actually make perfumes that could be layered, as it feels really weird that perfume is so uniform, when it should, perhaps, be a bit more personal to the person."
"We've just recently released a new approach to the perfume, which are roll-ons, which are in these beautiful glass bottles we had made in our own colours. The concept with those is that the base one is the original Vetyver Bergamot perfume, and then because it's all in oil and doesn't have alcohol, it no longer has that issue of the dangerous goods shipping to worry about to that degree. Then you can roll the essential oil on. There are two others that we've released recently- Arcadia and Hellbore - and the Arcadia is the more masculine night one, and the Hellebore is this really unusual floral that is based on Hellebore, that flower that grows all through winter, which actually used to be used as a poison back in Roman times. It was how Caesars would knock off their enemies. So you've got this really unusual floral, then you're able to layer the three perfumes together to make your own scent and feeling. So that's been really well received, and we're really excited to keep advancing that idea. By doing the roll-ons we're able to be a bit more experimental than the massive production levels we had to do for the atomized perfume. That's a real area that we really love, there's a whole lot of hardcore fans for the fragrance."
Speaking passionately about the business goals is personal to Simon. For both him and Ingrid, it's their livelihood, and now their family and customers are working together to see it succeed even further as one of New Zealand's premium fashion brands.
"Part of the reason that we were able to grow was that we had so much support from the local industry that helped us make our things. I think something like this event, with Covid, if it does knock over a bunch of businesses who aren't able to then keep working with or pay their debts to these businesses, what's it going to mean to these small suppliers who are so integral to growing local creativity? It's a really hard thing for someone starting out to get going, as the business model is so cooked. With fashion, it's traditionally been that you make everything and you send it out to your stockists, then you wait for however long it takes them to pay you."
"In fashion, I think people project a really premium exterior when they're running quite marginal, small businesses. Especially if they're making locally and they don't have that extra margin that everybody's then able to spend on appearing a bit more premium. It definitely feels a bit scary to put it out there. But it is the true state of what running a small business in New Zealand looks like."
"We've had 10 years of building, we've got a really strong community around us, and so far there's a really great response to the request for pledges to see if people would be interested in becoming shareholders. I think with the community around the business, it's a very viable business and it's a good business into the future as well. This is just the kind of thing that has to happen in this unusual 'new normal' if you want to be innovative and find new ways to do things."
If you're interested in becoming a shareholder in the Ingrid Starnes brand, visit Pledge Me for more information.