Starting August 26 through August 30th, Las Vegas, Nevada USA will hold the largest bi-annual Textile, Apparel, Accessories, Footwear, Sourcing, and Licensing show in the world. It is called M.A.G.I.C. International, (Men’s Apparel Guild In California). M.A.G.I.C. is now many shows all consolidated into over 1,000,000 plus sq ft of Las Vegas Convention Centre and many offsite locations, covering every quality level, every possible size range of Men’s, Women’s, Children’s Textile and Apparel, and other related products.
Since my father was one of the original founders of M.A.G.I.C. (Men’s Apparel Guild in California), way back in 1932, I would like to take the liberty of bringing today’s meaning to these letters as they relate to our textile/apparel/accessories industries:
M = Margins
A = Accountability
G = Global Thinking
I = Integrity
C = Capability
MARGINS are the key to winning or losing the battle. The ground rules set by the different retailers are now in fact based on historical benchmarks. They will tell you what they need in order to carry your line or to give you real estate in their stores. These guidelines are subject to many variables and you must have the infrastructure in place to make sure it happens exactly as you have planned. We all know the words ‘Chargeback’, ‘Markdown Assistance’, ‘Dispute’ or ‘Hold Goods for Later Ship Date’; therefore, these should all be included in your gross margin business plans.
Now you must look into your cost of goods; yes, this takes daily negotiation and sometimes very complex sourcing moves not only to remain competitive, but also to get that extra margin edge to cover those unforeseen dilution variables that seem to always come at the most unpredictable times.
You may not like what I will ask you to really look at – your G&A, or general administration expense area. This area includes those luxury items that can be legally expensed to offset taxes, and therefore you can rationalise that you deserve these comforts as the CEO of the business. Reducing your operating overheads is a very good way to realise bottom line profits.
Do you really need top of the luxury line automobiles for you and your key staff in order to run your business? Just a thought!
ACCOUNTABILITY relates to the structure of your organisation to deliver the product or service you have contracted for. It also relates to your vendor relationships and the systems that monitor their accountability to you. I am sorry to say that you cannot “pass the buck” and just hope it will satisfy a situation, because it will not.
Rate yourself in your relationships, both internal and external, and see if you measure up to the excellent credibility standards you need to grow or sustain your business. This is not an easy task, and you must have a mission statement that you and your firm wish to live by. You are the most responsible person in your firm, and when anything goes wrong, you will be held responsible.
GLOBAL THINKING is here and is a part of your business, whether you import or not. Globalisation and all of the variables like competition, politics, the internet, human values, communications, just to name a few, must be calculated in the building blocks of your business.
We are a capitalistic marketplace and it appears that this system is growing worldwide; therefore you have new players, new ideas, new competition, all moving at an ever-changing fast pace. Remember, “There is nothing so permanent as change”.
INTEGRITY is by definition ‘firm adherence to a code or standard of values’, but the fact is that not everyone lives by the same code. You had better know all the players and their cultural methods of defining integrity.
I am not about to write a sermon or to define honour or integrity. Instead, I will repeat a quotation that was told to me many years ago: “One who sleeps with dogs usually catches their fleas.” (Flea: Any wingless blood sucking insect, whose wings are adapted for jumping on to warm blooded animals).
CAPABILITY requires knowing your strengths and weaknesses. This will allow you to put into place the human resources, the systems and services to be successful.
An annual strategic review of the strengths and weaknesses of your business is one of the keys to moving forward. This is not an easy thing to do, but there are many firms with professional industry expertise that can assist you in this very important process. The MAGIC really is continually doing your best, and not hoping for miracles or using sleight of hand to be successful. It is not easy.
