Tailoring an Expansion Strategy

Success in the Midwest doesn't mean the clothing industry's big players will want to cut deals. But there is another route to growth

By Karen E. Klein

Q: I own a 2½-year-old clothing company that designs and sells youth-oriented sportswear, from skateboarding to swimming, hip-hop to heavy-metal. We are currently doing in-house design, purchasing, marketing, sales, and are shipping at a comfortable rate. We're ready to get some national recognition and have done pretty much all we can in the Midwest, where clothing-manufacturing is neglible. How do I find New York clothing manufacturers? Would they be willing to license our trademark and tradename? Are they likely to work with us in some other sort of partnership? -- R.D.B., St. Louis, Mo.


You're in a very tough business -- and you're operating from a very tough location. The apparel industry is almost completely concentrated on the coasts, where design, manufacturing, and distribution is coordinated. Without a fashion-world contact in Los Angeles or New York, it's going to be difficult for you to go national. And even if you do establish a partnership with an East Coast operation, expect distance to make communication more complicated.

Attending the major New York apparel shows and other industry events is the best way to make contacts outside your regional location, although it will probably take time to meet the industry's major players and become known yourself. Getting a New York manufacturer to license your name is not going to be easy either, unless you enjoy significant sales or amazing design talent, which they can already find quite easily in New York. Also, they will need to see your designs, fall in love with them, and feel that they can't duplicate the style or quality right in their own backyard.


  So far, it sounds like you have been selling a broad product line -- youth-oriented sportswear -- to a limited number of customers close to your home base. Typically, says apparel-industry expert Paul Ratoff, broad lines and a small customer base make a very unprofitable combination. "You would be better off finding a national sales rep or building a national reputation by selling to a more targeted market," says Ratoff, of Strategy Development Group. Target a narrow group -- hip-hop fans or swimmers, perhaps -- and design clothing that appeals specifically to that market, he suggests.

"If you have strong design talent, you may want to find a manufacturer who would use your services to develop its own line of clothing and pay you on a percentage of their sales," Ratoff says. Or you could find a hardgoods company (such as a skateboard manufacturer) that might be interested in having its own branded line of apparel and offer to work with them on the design and manufacturing angles.

"Go to your retail customers and find out what else they sell," Ratoff suggests. "Then approach those manufacturers and offer to outsource your design services to them." Good luck!

Have a question about your business? Ask our small-business experts. Send us an e-mail at smartanswers@businessweek.com, or write to Smart Answers, BW Online, 45th Floor, 1221 Avenue of the Americas, New York, NY 10020. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally.

Karen E. Klein is a Los Angeles-based writer who specializes in covering covered entrepreneurship and small-business issues.

Before it's here, it's on the Bloomberg Terminal.