Should you hire fashion’s favourite finance bro?
Hilldun has spent decades helping brands manage cashflow, retailer risk and growth. But for young labels, is it a lifeline – or just another expensive middleman?
49 years ago, Gary Wassner – now one of fashion’s favourite money experts – was a bookish PhD student reading philosophy at Bryn Mawr College in Pennsylvania. His father, Marvin, managing director of a traditional finance company called Hillldun, had turned ill, and Wassner was forced to return to his hometown of New York to support the family business.
Today, Hilldun Corp is the go-to financial partner for some of the industry’s major labels, including but not limited to Victoria Beckham, Courrèges, Rick Owens, Isabel Marant and Golden Goose. For scale, it looks after 170 active vendors (brands) selling to Saks, the largest multi-brand luxury retailer in the US.
Rewind to 1977, and Hilldun was just another five-person real estate management company that Wassner had joined, financing machinery, printing presses and “nothing to do with fashion”. “I did not like what I was doing,” he says, video-calling from St. Barts. “I was writing a novel. It was not my world at all.” Despite this unwanted career pivot, Wassner was rubbing shoulders with members of a bubbling fashion scene in the Big Apple. His friend, designer Betsey Johnson, had just finished working as an in-house designer for the Manhattan boutique Paraphernalia, and wanted to start her own label. She told Wassner she had $15,000 in orders from stores but no idea how to manage it all. Given that he was already financing at Hilldun, he saw no reason this couldn’t be a viable avenue. “Nobody was interested in financing fashion in New York at that time,” he recalls. “Banks would not touch companies like this. They didn’t believe that fashion was a business. So I started working with Betsey.”
He worked with her for the next 14 years, and has been managing, lending and running back-office administration for fashion companies across the US West and East Coast, Australia, Europe and the UK for decades. By developing an infrastructure, he took away the tasks designers didn’t want to do. Quickly, success stories mounted. “It was a small industry, so it was relatively easy to meet people,” he says of his journey. There was Willi Smith, who designed WilliWear, one of the most successful African-American-run labels of its time; Tommy Hilfiger, who had started a company under a different name, ‘20th Century Survival’; then, Hilfiger’s sister, wife and daughter all set up labels. Other case studies include Thom Browne, Marc Jacobs, and a young Michael Kors.
“We spoke to Ssense every day. We worked with them on their cashflow difficulties. We stopped approving [orders with] them long before they filed for bankruptcy, knowing it was inevitable.”
So, what exactly was Wassner doing that attracted this typically scatty cohort of professionals? First and foremost, factoring, an obscure word, which in fashion terms translates to lending a designer money against their stockist’s orders for clothing – crucially, with a guarantee on payment from the factoring company. Still stuck? Consider this. Every designer goes to market when they air their designs on a runway, in a presentation or in a lookbook. If boutiques, department stores and e-tailers see potential, they place an order. The designer must then deliver the clothing (merchandise), and the stockist is asked to pay up within a set timeframe – let’s say, 30, 60 or 90 days. The problem is that the last step rarely happens in a timely manner. In fact, sometimes, a stockist never pays, and the designer is forced to write off the loss with no proper legal recourse. As well, if a designer wants to see any substantial growth, they can’t afford to wait a month or longer to secure funds for developing the next season. Delivery dates and show dates just aren’t staggered that generously.
That’s where Hilldun steps in. Here, the system works as follows…