Mint Velvet dresses for success

A new womenswear clothing brand that has been trading for less than a year is set to roll out further concession stores across the UK, after securing a factoring facility from Lloyds TSB Commercial Finance.

Buckinghamshire-based Mint Velvet was launched in October 2009 by Liz Houghton and her creative team from the former high street chain, Principles.

The business, which currently employs 160 people, designs and sources its ranges in-house and targets the over 25s womenswear market with its ‘relaxed glamour’ ethos at the heart of each collection.  

Since its inception, the brand has enjoyed strong sales and has grown rapidly with turnover projected to reach £10 million over the next twelve months to July 2011.

The brand was launched in 14 House of Fraser department stores across the UK, two boutique stores in Chichester and Windsor and online. After a further roll out this spring, the brand now has 40 concessions in House of Fraser and Fenwick and is on target to open a further 25 by the end of 2011, including an initial launch into selected John Lewis branches.

As demand for the new brand exceeded expectations, management acknowledged a cash flow facility would provide appropriate support for the future growth of the business. The team approached Lloyds TSB Commercial Finance, which provided a seven figure factoring package.

This facility releases the value of the firm’s sales ledger and allows the team to concentrate on increasing the production of garments.

Trading terms with department stores can mean capital is tied up for 30 to 60 days and the factoring facility bridges the gap between the clothes being manufactured and supplied and payment received.

Stuart Grant, Commercial Director at Mint Velvet, said: “Setting up and expanding a multi-channel brand as large as Mint Velvet in six months was no mean feat but we all felt there was a gap in the market for affordable, wearable clothes reflecting a modern lifestyle.

“Our clothes are luxurious but with a casual feel, and we are positive this will make waves in our target market – a sector that is typically more resilient compared to the disposable styles of young fashion.

“As demand for our clothes grew, we needed increased working capital as cash is tied up for a month or two in our concession stores. Our bank provided a factoring facility, which has enhanced our liquidity and smoothed out the imbalance in payments.”

The bank’s Regional Manager said: “Although the retail industry suffered during the economic downturn, it is still worth £12 billion per annum, and Mint Velvet has successfully targeted a demographic that remained relatively strong throughout.

“For the right retailers, now is a time of great opportunity and since the factoring facility is available as soon as the first invoices are raised, this form of financing is becoming an increasingly useful tool for fledgling businesses as it doesn’t require a firm to have produced their first accounts.”

Mint Velvet’s management team raised the initial capital to set up the company last year. The business backers included former Principles boss and Clarks Chairman, Peter Davies, and Mint Velvet’s Managing Director, Liz Houghton.