The hard sell
Every day, apparel and footwear designers with big dreams for their shiny new label hire a fashion agent to spruik their wares.
Sometimes, the relationship will work, and the label will go from small fry to dynamic designer in a relatively short space of time.
But on many occasions, the relationship turns sour, and the lawyers are called in to terminate an association that probably shouldn't have been formed in the first place.
Melbourne law firm Gibson Legal specialises in representing those in the clothing, textile and fashion business, and has seen his fair share of unhappy endings.
Principal Stuart Gibson has seen everything from fashion agents writing up false orders, lying about visiting a region to promote one of its clients and not spending enough time reporting back to designer on their results.
He's even been involved in a case where the agent was misappropriating the product for themselves, and in another case, came across an agent who quit their job to go in direct competition with one of their clients.
"Really, labels need to set up a very strict and regular reporting mechanism for the agent, so that both parties start out on a level playing field," Gibson says.
"And an easy termination clause is also important to protect both parties."
Gibson says documenting key terms in an agency agreement is crucial - and The Australian Fashion Council (AFC) agrees.
AFC managing director Zoe Edquist says she often receives complaints from designers about the behaviour of their agents and vice versa.
"The main reason that problems arise is that the parties fail to document their arrangement formally," Edquist says.
"The most common complaint from designers is that their agent has failed to spend adequate time promoting their label, and that this has resulted in poor sales.
"The most common complaint from agents is that the designer fails to pay their invoices on time, or fails to reimburse them for expenses that they agreed would be the responsibility of the designer."
And more often than not, both parties have different recollections of what had been agreed upon in the first place, making an amicable separation difficult, Edquist says.
The bottom line is that the arrangement between the designer and agent should always be formally documented to ensure that both parties know their rights and obligations, she warns.
Consultancy firm Competitive Edge says most people understand the term 'agent' as meaning someone who acts on behalf of another person, but that this term is insufficient and can be misleading.
Company principal David Higginbottom says it is a good idea for a label to set an initial trial period of one year before granting agency agreements for two years or more.
"During that period, you would establish firm sales targets and average margin targets. And agents should have a contract that restricts them from conflicts of interest with like brands or products, especially if they are in the business and are importing and manufacturing, etc."
Also, agents should not be given access to brands or trademarks - these should all be registered in the owner's name, he says.
"And beware of agents who take on your brands and then smother them while they promote other brands or their own brands. This merely takes you out of the market."
Fiona O'Day of Vicious Threads, who has an agent acting on her behalf in western Australia and another in Queensland, says brands can't go past a trusted recommendation.
"That being said, it also pays to find an agent with experience not only in fashion wholesale but also within the demographic that you sell to. This way some of their existing retail contacts can be of benefit to your sales growth," O'Day says.
Constant communication is the key to a good relationship with your agent, she says.
"A good agent will seek to understand your brand and your growth strategies. A bad agent will take any sale they can get irrespective of brand positioning."
Higginbottom advises designers to travel with the agent to see client reactions first-hand, which will mean minimal target results can be fairly assessed. This will also avoid a common situation - whereby a retailer asks questions about the origin of the fabric or something similar, and the agent doesn't know the answer.
Edquist also suggests designers do their own selling for the first few collections - at least in their own city.
"This will provide them very useful feedback about their product and will allow them to develop a one-on-one relationship with wholesale buyers."
But if designers are aware of the pitfalls and are smart about documenting the arrangement, the right fashion agent can spell significant growth for a brand, according to Gibson.
"Agents can be really important for a designer, because those with up and coming labels can't be everywhere at one time," he says.
Generally, agents' rates are between 10 per cent and 15 per cent of what the agent sells, which is payable 30 days after delivery, or when the stock is delivered to the customer, he says.
"The top agents get 15 per cent, but generally, agents are paid between 10 per cent and 12 per cent of what they sell."
Sydney fashion agent Mulham Boyd Agency's Danielle Boyd says it isn't particularly difficult to find a good agent, but is significantly harder to secure a good agency.
"The main advantage of placing a product with a high profile fashion agent is that it gives the brand high visual exposure, which the label may not receive if the retailer has to make a special visit to the manufacturer," Boyd says.
With labels like Nine by Joe Saba and Seafolly on her books, she should know.
Boyd says good fashion agents should know almost every retailer in each suburb.
They should also be offering labels individual advice for each different area and climate and should be available when the range is being designed to discuss prints, fabrication and commercial viability, she says.
Higginbottom also believes agents should also produce reports on market trends, market take-up of products, design problems, competitors, etc.
"Good agents handle after sales service, including warranty and returns," he says.
So what sort of questions should a designer in the market for a fashion agent be asking?
Gibson says a fashion agent always should disclose who the other clients they work with are, and should be passionate about the labels they take on. He says designers should not be afraid to ask the hard questions.
"Your agent is your brand extension, so you want to make sure they are giving your brand the personality you intended it to have," Gibson says.
It is also important that the agent has a relationship with buyers in the area you want to sell into, and that they understand the area.
"Also, find out if they will personally be representing your label, or if the junior will - in that case, you will need to also meet the junior."
Gibson says designers should completely avoid agents who already carry a large brand because you might not get the attention you deserve.
"If you're a boutique swimwear brand and the agent you're considering has Seafolly on its books already, then the likelihood is that the agent will give the larger brand the majority of the attention."
Finding out how long the agent has been in the industry, how they intend to promote your product, and whether they carry labels that compete with your range is also essential, he says.
Those in the know recommend finding an agent by asking key retailers who they like to deal with. Also, visit trade shows and talk to buyers and owners of outlets. The experts say word of mouth is a reliable way to find someone who will have your best interests at heart.
"I have found that someone to come out of the sporting environment can do a really great job representing sporting labels, because they understand the personality of buyers and their needs really well," Gibson says.
"On the other hand, if you want to get your label into David Jones, you should look at employing an ex-DJ's employer, because they really understand what big retailers want."
FAST FACTS:
The agreement between fashion agent and label should always be formally documented, and at the very least should contain:
* Whether or not the agent has been engaged on an exclusive basis in a particular region
* Who is responsible for performing credit checks and approving orders
* The extent to which the agent may offer discounts on bulk orders
* The extent to which the agent can be reimbursed for expenses