Photo courtesy of Sarah Van Aken
When Sarah Van Aken started her Philadelphia-based women's apparel company SA VA Fashion and Accessories six years ago, she did what clothing retailers from Gap and Target to JCPenney have done to cut costs: She outsourced production to Bangladash. By the end of her first year, she figures she'd spent at least nine weeks on the other side of the globe working with the folks who manufactured her fashion designs. The visits led to more than just jet lag.
In 2008, after a week of 4 a.m. phone calls with South East Asia, she knew she had to make a change. "Between the aggravation, the carbon footprint, and the tariffs, I just couldn’t deal with it anymore." Not only did she move all of her manufacturing stateside, she focused on creating a business that aligned completely with her core social values of community and sustainability.
It's paid off. SA VA's design, manufacturing, and retail operations — all based in Philadelphia — brought in more than $500,000 in gross revenue in 2012, and sales are up 15% this year. Van Aken says she expects "substantially more growth" in the coming months. Pretty impressive for a six-year-old, "socially driven" brand.
DailyWorth: How did you get into the fashion business?
I had the dream–no, the calling–to be a fashion designer. However, that career turned out to be nothing like what I thought it would be. Right out of college I worked for a wholesaler that made knock-off designer jeans for big box retailers. That tired me out. Fashion seems so glamorous, but really it's pretty schleppy. After that, to pay the bills, I worked as a restaurant manager for a few years and eventually quit that too. Ironically, the two trajectories eventually came together. A good portion of my business is still designing and manufacturing restaurant uniforms.
How did your experience affect the way you view and run your business?
I'm no longer driven by ego or glamour. Instead, I converted my business model to be built on social sustainability. It turns out that the apparel industry is one of the largest polluters of the environment in the world and that there are over 200 million people working in enslaved labor conditions. That kind of killed the illusion. I had no choice but to transition my company in a direction more aligned with my personal values by manufacturing locally and sourcing organic and recycled materials.
Does social sustainability come first at SA VA?
Yes, but not in terms of branding. We believe the SA VA brand needs to be fashion first and foremost. So, from a product standpoint, the social mission is just added value. We want women to look and feel great in SA VA while simultaneously doing something good.
On the business side it is not so simple. We start with people, creating local jobs and reducing our carbon footprint by manufacturing in Philadelphia. [SA VA employs nine.] Then we use responsibly sourced textiles–organic and recycled, if we can get them. At times, we've used really creative upcycling. In 2012, for example, we sold trench coats made from banners that the Philadelphia Museum of Art had used to advertise the Roberto Capucci exhibit.
Do you do your own manufacturing?
We cut all of the garments in-house and make samples in our own facility. We outsource our sewing to other local factories that specialize in different products.
What have you learned along the way?
My current favorite saying comes from one of my new investors: 'No sales, no chance.' So true.
Also: Don’t underestimate the importance of experience and maintaining institutional knowledge. Turnover can be very expensive. Long-term employees have a knowledge of my business that is hard to teach through training. I’ve learned that the value of that knowledge is very high.
Another lesson is that having great mentors is crucial. I tend to find people who are experts on what I need to know at the moment. Then I rope them in.
What financial lessons have you learned?
It's better when I'm not the bookkeeper! I’ve learned a lot about cash flow, financing deals both through debt and equity investment. The most important things I’ve learned are the small things about the impact of inventory turn and margin. For instance, we did a lot of private label work at one point. We designed and manufactured stuff that was branded and sold by a small independent retailer. It brought in cash rapidly but, capacity-wise, it took up a lot of production space and we made smaller margins on it. It works best when we sell our own goods.
Is SA VA profitable?
We were approaching break even and then raised almost half a million dollars in capital from private individuals and angel investors. I tend to hand-pick investors I want to be actively engaged in the business. I want more than just cash. I want mentors.
What does success mean for you?
Sometimes it is just about designing a stunning dress that people love.
Or, creating customer loyalty: Last Saturday, this woman was hurrying by the store with her family. Suddenly, she stops and drags them all inside just to tell them that SA VA is her favorite store. That kind of validation is awesome.
Visit SA VA here: http://shop.savafashion.com