Founders salvage firm, after the storm
Thailand’s 2011 monsoon season nearly shut down Canadian fashion designer Ferknot, but the founders pulled together to emerge stronger
When the founders of Canadian fashion brand Ferknot saw their Bangkok factory wiped out by the vast flood that consumed the region in 2011, they lost their prospective investors and the bulk of their inventory in one swoop.
In business for less than a year, partners Jorge Calderon, Ryan Bruehlman and Rick Taylor had pooled $55,000 of their own money to start the made-to-measure luxury label with a nautical bent. Orders were flowing in, when flooding inundated Thailand in the monsoon season. They lost $25,000 in inventory and equipment.
“Everything was basically gone — We were able to salvage some tags, and that was about it,” recalls Mr. Calderon, company president.
“We had three investors who were ready to sign documents and were about to bring in about $100,000 to the company. We were planning our future based on the money in terms of marketing dollars, in terms of everything,” he said.
“We had to put more money into the company for equipment. It was a very tough couple of years, just trying to focus on starting over. Starting at square one, basically,” Mr. calderon added.
but the trio remained determined to keep the business going, albeit on a smaller scale.
Mr. calderon and his partners returned to outside jobs and bankrolled an additional $40,000. In the interim, Ferknot kept producing, selling a handful of dress shirts and the seedlings of a casual wear line through its website Ferknot.com.
“It was significantly more costly for us, because it was a short [production] run,” Mr. calderon said. “It was focusing on growing the brand one sale at a time, really word of mouth. There was no advertising budget.”
For 2011 and 2012, the partners averaged $12,000 to $15,000 of sales from Ferknot, about one-tenth of what they had anticipated had they been running at full steam.
but the fallow period also gave the team time to hone their concept of the brand, and the opportunity to operate the company as a scaled-down test pilot. That directly led to two decisions that have made the company much more successful: They introduced garments in standard sizes, and debuted a casual wear line.
The struggle also helped the partners see the strength of one of its hidden assets — the signature paisley used as a backdrop on its website and other branding materials. The pattern, which includes the company logo and the initials ‘FK’ into its design, will be brought into several of the line’s designs in the next six months.
“The fabric is a significant investment on its own,” Mr. calderon said. “but in the future, we can see using it in the same way burberry does with its signature pattern — on ties, on scarves, back of jean pockets, inside jacket linings.”
On track to do $100,000 in sales between April and September, Ferknot does about 60% of its business in dress wear such as shirts and jackets, and 40% in casual wear. With dress shirts ranging from $105 to $240 and jackets in the range of $550, all dress wear is available with a madeto-measure option.
Mr. calderon said the partners expect to turn a profit within the next year, with a goal of $200,000 in sales. “[Profitability] depends on what decisions we make financially, what we invest,” Mr. calderon said. “right now it’s almost breaking even.”
Ferknot is not the first canadian fashion brand to emerge stronger out of a disaster — Preloved, along with a number of local businesses on Queen St. West in Toronto, was gutted in 2008 when a neighbouring store caught fire, and emerged with a new store and revitalized business plan focusing on growing its online and wholesale businesses.
Ferknot’s expansion plans include a new line of suits, which the partners are distributing initially to some NHL hockey players and friends. “We think that suits are going to change the game for us,” Mr. calderon said.
The brand has also been on the promotional circuit, and after a successful stint hosting a gifting suite in the ritz carlton at the Toronto International Film Festival last month, Ferknot will begin distributing through the Stanford row website for bespoke clothiers in addition to its own website.
The company is looking to open a retail store in two to three years. “Instead of looking to get smaller investors coming on board, we will look for some more serious money,” he said. “We are looking for partner to help open a retail store in Toronto or New york. They are actually not that different in cost, you’d be surprised — Toronto is expensive,” Mr. calderon said.
Ferknot’s 2013 r e vi val comes at an opportune time in canada’s luxury market. Holt renfrew and Harry rosen are expanding their store operations, Nordstrom arrives next year, Hbc is bringing the Saks banner to canada, and a host of high-end international players have opened up or expanded operations here this year, including Mulberry, Ferragamo, Kate Spade, John Varvatos and dolce & Gabbana.