Barry's Accounting Services, Corp.
1852 Flatbush Avenue - 2nd Floor
Brooklyn, New York 11210
(718) 677-4006
E-mail:
clembarry@aol.com
 
Client Update - quarterly newsletter
 
 

 

The Fashion Industry - Barry's Accounting Services - Brooklyn, NY

Tax accountant & business advisor serving fabric manufacturers,
designers, pattern makers, models, and retailers.

The Fashion Industry - Barry's Accounting Services

Overview

Industry Course Work:

- Budgeting & Financial Management
- Project Management & Cost Accounting
- Trends Forecasting & marketing
- Transportation logistics & Security details
- Brand Identity, Licensing & Merchandizing
- Special events planning, production, marketing & risk management
- Business, individual & International Taxation
- Sponsorship & Sponsors expectations
- Media Buying and Management
- Entertainment Taxation (Music, Fashion, Sports, Culinary & Film)
- Business, Contracts, & Entertainment Laws

My name is Clemson (Clem) Barry. I have clients in the fashion industry. Fashionable attire, accessories, and beauty products are lucrative and rapidly growing industries. They attract a lot of middle- and high-income individuals and they seem to have the right fit with an "entertainment accounting" firm like Barry's Accounting Services. I grew up in a family of seamstresses. My mother and two of my aunts were seamstresses and, back in those days, those three sisters were on the cutting edge of fashion they were "haute couture," so I have an eye for fashion and good fabric. I have a young niece in college who is hot on the fashion trail. My firm sponsored her in 2007 and she has won a trophy.

Fashion is about what's new and what's next. Fashion designers are selected for their creativity, technical skills, and their ability to improvise (with an eye for details). The presentation must fit the vision the designer has promised and the fabric must not have too much bounce or be too stiff. Creativity and skills must be well-executed and the outfit must look elegant, inspiring, and memorable. Designers must manage the nit-picking details before the model dresses for show time finished details such as fit, buttons, button holes, zippers, pockets, hemlines, collars, sleeves, etc. If a designer is not accustomed to dressing a model, s/he should hire someone who knows how to dress the model for that special occasion. Fashion models are chosen for their talent and appearance. In addition, they must demonstrate a positive attitude, high energy, and confidence. They have to look elegant and they have to command attention when they strut the catwalk/red carpet.

Income:
Personal lines/collections, new designers' collections, consultation services, and residuals.

Tax deductions/tax breaks/tax write-offs:
Fabric, pattern/sample, thread, needles & pins, rent (boutique/ warehouse/ showroom/ office-in-home), buttons, zippers, scissors, tape-line (tape measure), thimble, stationery and postage, electricity, window display, sewing machines, machine maintenance, cutting tables, iron, chairs, clothing cabinet, travel, tolls, gas, meals, hotel/lodging, advertising, gifts, security, depreciation, amortization, credit card fees, Internet access, membership dues and subscriptions, telephone, secretarial fees, fashion model/agency fees, accounting fees, legal fees, insurance, payroll and payroll taxes, sales tax, administrative salaries, trade shows, yarn and textile shows, vintage shows and online research of different eras, racks, shelves, counter, cash registers, hangers, mannequins,
street fairs, sales commissions paid or returned, sanitation, delivery, shipping/freight, customs duties, defects, etc.

E-mail received:

Question
"I am planning to graduate from F.I.T. next year. Getting my clothing sold in trendy stores will be a dream come true. What financial resource(s) would you suggest that I tap into to start my clothing line?"

           - Lisa, Queens, NY

Answer
It is tough for anyone to get adequate bank financing for a new business if there is insufficient collateral to support the loan. Some entrepreneurs have overcome that obstacle by borrowing from their savings, pension, credit cards, and home equity. Others have sold their most cherished possessions to finance the venture. Some have formed partnerships with people in their industry who have the cash while others have sold part of the business to venture capitalists.

Question
"I am a designer. I do not want to be bogged down with actively selling my collections to stores. Any suggestions?"

           - Raymond J., Manhattan

Answer
There are well-known designers who will act as middlemen for new designer labels that the big retailers would not automatically consider.  They absorb the risks that the big retailers do not want to inherit from virtually unknown brands. They open the market for smaller designers by collecting their best creations and selling them to larger retailers. They help increase the value of the brands by establishing exclusivity for the brands. This is a good synergy for everybody.

Question
"I would like to increase my chances of obtaining corporate sponsorships. I have tried and failed many times. I would appreciate any suggestions you can give me."
           - Janice, CA

Answer
Companies will review a sponsorship request to see if the event meets their guidelines and competitive spirit. You must be prepared to answer questions, such as:

What is the event?
Who are the other participants?
Have you participated in a similar event recently and what did you achieve?
Did your participation increase the sales/revenue of your former sponsor? If so, by what percentage?
When and where will the event be held?
What form and level of support are you seeking from the sponsor?
Who is your target market/audience and do you have a strong support/fan base?
What are the significant benefits that you propose to return to the sponsor?

Question
"I and several other students at Brown University are considering starting a fashion social enterprise. We are curious as to what typical valuation methods are used in the fashion industry. Do you have any words of wisdom for fashion startups?"
           - D. Gurevich

Answer
Use the Book Value to calculate the market value of a target company in the industry, then use the Industry Multiplier to calculate a second market value. Both values will give you a realistic idea of the maximum value of the business. The answer to your other question is passion for the industry, enlist the services of a good coach/mentor, research, attend trade shows, follow a communication strategy that will build you brand equity, and maintain your competitive advantage as your demographics change.

Testimonial:

"Your mentor program is great. I moved to Miami and purchased the business of my dream nine months later. I am planning to open another store in the fall, just like you had predicted; and I am counting on his support."
           - Angelina Cruz, Retailer, Miami, Florida

"I opened my second store to accommodate upscale shoppers and my collections are flying off the racks. I am ready to franchise my brand and I have plans to take the business public. Thanks for believing in me and thanks for being there for me."
           - Angelina Cruz, Retailer, Miami, Florida

 

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Click here for "The Entertainment Industry"

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