On Thursday 14 September 2016, Première vision leather, in partnership with ADC – au-delà du Cuir– invited young labels, finance specialists and representatives from the leather industry to an event discussing the reality of entrepreneurship in this sector and the opportunities that are available. It provided an occasion to highlight success stories and the wide range of institutional and professional support available to fledgling businesses.
- Sophie Hivert, Delegate General of the Fédération Française de la Tannerie Mégisserie
- Delphine Le Mintier-Jonglez, Director of Investments of the BPI in charge of the Fashion and Finance Fund
- Louis Epaulard, Founder of the leathergoods brand LEON FLAM
- Nathalie Elharrar, Founder and Designer of the shoe brand JOUR FÉRIÉ
- Xavier Chantepy, Coach at Au-delà du Cuir
- Claude-Eric Paquin, President of ADC : Au-delà du Cuir and the Fédération Française de la Chaussure
Headline: Leather sector start-ups: plenty of support available
“France is renowned for its creativity and its design, but the dynamism of its young business creation sector, particularly in the leather industry, is less well-known,” said Claude-Eric Paquin, President of ADC Au-delà du Cuir and the French Footwear Federation, in his opening remarks.
They have taken on the business creation challenge
Proof of this dynamism is the young footwear label Jour Férié Paris, currently supported by the ADC incubator. The company’s founder, Nathalie Elharra, described the combination of discernment and perseverance that were required to launch the business. “As an employee, I worked in all the stages of luxury footwear and leather goods production. I wanted to create a brand with its own DNA so that I could be responsible for the entire chain.” After launching the Larare label, a new concept of easy-to-wear shoes made using luxury techniques started to take shape. With two partners, she created the company that would operate in this niche. “Our ambition wasn’t to become a huge company but a successful business that stayed loyal to its own conception,” she explained.
Louis Epaulard, creator of the Léon Flam label provided the example of a successful industrialisation process. “I spent four years constantly looking for suppliers, before deciding that it would be better to have more control over my sourcing and my stocks,” he explained. “This led to the project of creating a manufacturing workshop in central France. The idea was to organise our own production runs and increase our product expertise.” The benefits of this approach? “It is us, rather than the manufacturer, who knows the product well,” he said, “which allows us to increase our volumes and our margins.”
Know the material: An accessible prerequisite
“Knowing about leather and the professions involved in producing it is an important prerequisite for operating as a business, and we are making this information more and more accessible,” emphasised Sophie Hivert, Chief Representative of the French Federation of Tanners. She went on to give details of all the training tools developed by CTC around leather and its transformation, one of which is the leather library located within the Federation’s head office in Paris. It presents a total of 300 samples from all French tanneries. Creators are also encouraged to present their projects to the 30 French tanneries that exhibit at the Première Vision Leather show. Sophie Hivert emphasised that “solutions exist when looking for the small volumes that are so important to creators: in the showrooms of tanners, and with some manufacturers that have the capacity to produce in small quantities.” Young people were also reminded that there were very interesting opportunities available from taking over existing tanneries.
The leather sector is pulling out all the stops for the next generation
The professional federations have developed a number of tools to support and stimulate new business projects. Xavier Chantepy, business coach, gave details about the ADC (Au-delà du Cuir) incubator. Drawing on government support, this programme assists 20 labels over a period of three years. Eight or nine new candidates are selected each year. What are the criteria? “A balance between the creative component of the project and its entrepreneurial dimension,” explained Xavier Chantepy. Incorporating a series of monthly meetings, the incubator programme provides support for the strategy, finances and steering of the company. It also includes specific training courses in style and artistic direction. On the commercial side, ADC helps to fund participation in trade shows and offers the use of its permanent showroom in Paris. Other precious support: a guarantee fund has been created so that entrepreneurs do not have to personally secure any loans they take out to meet their working capital requirements.
A bonus for innovative and profitable business models
In their search for funding, companies are also encouraged to take a look at the instruments BPI France has been managing since 2013.
“Two tools are particularly well adapted”, explained Delphine Le Mintier-Jonglez, investment director at BPI France in charge of the Mode et Finance (Fashion & Finance) fund: One is the ‘savoir faire d’excellence’ fund, which has a capital of 20 million euros. It is used to finance industrial projects and transfers in companies with a turnover in excess of 50 000 euros. And the Mode & Finance fund, which is specialised in companies producing personal goods. BPI France takes a minority stakeholding in the company and acts in the long term. “We know that the development cycles in these sectors are much slower than in the technology sector. We also believe that creators should stay at the helm of their companies,” she explained. Innovative business models, such as those drawing on digital technology and those that are profitable from the outset are more likely to obtain a positive response.
Propose projects with added value and dare to think internationally
The very pragmatic questions asked by the audience at the event covered the commercial margins that could be applied as well as the difficulties in committing with suppliers at the beginning of a collection. Although young companies may have to apply lower margins at the beginning, Claude Eric Paquin warned them that they should ensure that their professional sale price is always 50% higher than their cost price. Opening test sales outlets, using direct sales, pop-up boutiques and collective commercial operations in conjunction with other labels were some of the commercial options that can be combined to boost sales. Although, as Claude-Eric Paquin noted, “it is difficult to design a business project of any substance without incorporating international distribution”.