Ateliê Cretismo (Fashion Clothes) 2/3

We started talking about her business journey so far and expansion plans.  One of the best things she said was about her customer profile.  She said that “People in Rio who buy fashion, want to buy it cheap.  Those who buy ‘status,’ are okay paying high price for a big brand.  My customers are those who want to buy fashionable clothes on the cheap.”  She also highlighted that she has been a B2C payer so far and wants to now move in to B2B space.  She is already in talks with a couple of dance and theater groups.  She is also thinking of expanding her business by hiring more people.  She reached out to a ‘women-in-business association’ for additional funding and support for her business expansion.  She understands that she is a designer and not a producer, and as such, would like to hire people who would make/stich the clothes she designs.  For her every design is a story.  Before she begins designing clothes, she writes a fictional story, which helps her think about design/fashion elements.  She creates and maintains a customer database and sends them new design ideas.  If customers like it, she books the order and makes the clothes.

After getting a basic idea about her business philosophy, I wanted to get some details about the numbers.  I was very impressed by the detailed cash and stock flow accounts that she maintains.  During the initial phased of her business, she used to have 5 employees, but she soon realized that the burn rate was too high and down-scaled her business to adjust to the new reality with the help of the incubator.  She submitted that she now makes about 10,000 reals every month on average.  However, her cost is 80% of revenue, including the replacement cost.  It was very surprising for me as generally fashion retail is a high margin business.  She explained that she does product-wise costing and some of her products are much more profitable than others, and she plans to discontinue her unprofitable line of products.


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