SYDNEY: The former owners of collapsed fashion house Monti claim their downfall was as a direct result of the company's success.
Husband and wife duo Yuval and Leisa French were at the helm of the 17-year-old design company when it collapsed beneath a debt of more than $10 million late last year.
The couple, who secured an unnamed backer and relaunched their business under the new name of LYF Group just 23 days later, said at the time Monti was handed over to administrators it was stretched too thinly, with a large number of brands and a growing significant private label clientele.
"That was part of the problem. We had five labels and when you're making five labels three times a year with five samples of each it adds up. Before you even get your first order you've got to sell over $1 million worth just to cover costs. All of a sudden you find yourself on this merry go round where you've created this machine that you've got to keep feeding. That's when you take orders that you shouldn't for not enough margin," the French's said.
Despite continuing to see himself and his wife as "victims", Yuval Leisa French said the pair had adopted a different modus operandi since re-entering the sector and were determined not to repeat the same mistakes.
French said the duo had began by taking a "good hard look" at what Monti's strengths were and how they could be adapted to suit the new business.
The changes included a pared back staff roster, four fewer labels, a significant reduction in the amount of stock carried by the group and an office space one-tenth the size of the original, she said.
French said this had allowed time for the pair to reconnect with their staff, re-focus on their core Montique product and develop a more intimate relationship with their customers and suppliers.
"It's consolidation but at the end of the day it's more successful because you're closer to your product and you're closer to your customers."
French said while they were well aware of industry rumours speculating on the cause of the business woes, the vast majority of their suppliers and customers had thrown their weight behind their new venture.
"Anyone that phones me and asks me the story I tell them. I have nothing to hide and that's a reason I think that we were able to "It's been an emotional journey . . . but small is definitely the new big."