Emily Blumenthal
Host
00:00
Hi and welcome to the Handbag Designer 101 podcast with your host, Emily Blumenthal, handbag designer expert and handbag fairy godmother, where we cover everything about handbags, from making, marketing, designing and talking to handbag designers and industry experts about what it takes to make a successful handbag. Welcome, Christina Langbort, to the Handbag Designer 101 podcast. So happy to have you, thank you so much, Emily.
Christina Langbort
Guest
00:30
It's always so nice to see you.
Emily Blumenthal
Host
00:31
Great Shall, we go way, way back because I've known you, I think, since you started at Hilldun, where you are now a director of business development, and Hilldun is a factor. So you want to talk a little bit about what you do there and what a factor is, and then we can jump in.
Christina Langbort
Guest
00:49
Absolutely. I can't believe how long it's been. Actually, I actually started at Hilldun in 2007. I was very junior and green in the industry. I knew when I had interviewed at Hilldun that we were a company that worked in fashion and also on the financial side, but I didn't really understand how it all worked. So at the very beginning I was learning and just trying to get a sense of the industry and, like I say, 17 years later I've really come a long way.
01:19
I oversee the global business development for Hilldun. Hilldun is a privately held bank. We are a factored company essentially. We have headquarters in New York City as well as Los Angeles. We have a bit of a satellite office in the UK. I am in charge of overseeing business development initiatives. In addition, I run a I guess we're at like 10 right now in 10 person remote internship program. We have maybe a quarter of the intrinsic coming person, but we've really built out a system as a way to be able to give back for those young associates who are just starting out, kind of like. I was in the industry very young and not with a lot of help, but I was sort of a female in somewhat and a male dominated industry. I'm not talking about fashion specifically. I'm talking about working in private banking and factoring.
02:10
What's really cool and unique about Hilldun is our focus in the apparel and accessory and luxury contemporary space. So what does that all mean in simple terms? We are helping to support the growth of these global grade businesses, either on the financial side and or protecting them from taking credit costs. They often receive orders for retailers and the retailer would like for them to extend payment terms of 30 days or something like that, and Hilldun assesses the credit risk of the retailer, provides really valuable information to the company so that they can determine how they want to go about their business. And because we're private, we can finance startup companies right. So companies that are just turning a few hundred thousand in orders or just launching and needing some help with their cash flow throughout their shipping cycle. So we've been there and helped a lot of people and, specific to what I do, I always like to say I'm a connector, because I pair the brands with the various financing they need and also connect them to industry people that could be helpful people like you. You know showrooms accountants, etc.
Emily Blumenthal
Host
03:20
So just in layman's terms, what is a factor?
Christina Langbort
Guest
03:25
Well, by definition a factor is somebody who is purchasing an accounts receivable from a company and advancing the cash on the basis of the accounts receivable, so that the store will then pay the invoice that's outstanding.
Emily Blumenthal
Host
03:40
So if I'm a designer who just trying to like make it into the ideal new candidate because obviously someone who's been around, who's had a functional business, is making money with many, many zeros that obviously would probably be a better candidate for you because you know they're established, they've been doing business, they have cash flow, they have traction, they have stores. But for someone on the newer side that would be appealing to you, that would have to prove their worth and show their collection. It would mean that they would have, like you said, a few hundred thousand in sales. How long would you say they would have been need to be around at this point?
Christina Langbort
Guest
04:21
Well, you know I should be careful what I say numbers. I think it's really important to identify those companies that have a clear vision and that have a clear plan of how they're going about the expansion of their business. Whether it be, you know, some companies are doing direct to consumer and they might not have wholesale orders. Some companies might have, you know, retailers that are interested but they haven't quite faced the order. So when I'm looking at a potential opportunity, it's going to be with those companies whereby retailers are actually showing an interest. Maybe they've placed an order or two and that is the information to know. Does this brand have, you know, potential for growth? So often it's who's interested in the collection, like they're working with a particular sales agency or something like that what the background of the designer is. I mean we're not as much concerned with. You know the creative element of the company and such, so long as they have really a clear point of view, they know what their customer is, do you?
Emily Blumenthal
Host
05:24
challenge them on who their customer Like. What kind of documents do you ask them for when considering I?
Christina Langbort
Guest
05:29
wouldn't say we ask for any specific documents when we're considering a formal relationship. I mean, we would want to see a list of the orders that they have with the retailers just to check the underlying credit of the retailer. It's very exciting to get orders, but if you're not going to get paid that could be challenging. We like to see a part aging report, so we want to see that the stores are actually paying what you expect them to pay. And when we're looking at financing for companies, we would like to see simple internal P&L and valenti and really just understand who the orders are at the business.
Emily Blumenthal
Host
06:01
So, in layman's terms, I'm a brand, I've got good traction, stores are buying for me. What you would do in a perfect world is I would give you my purchase order or the order from the retailer, give it to you, you would give me that money and what you would assume I would do that money is to pay for production, because said retailer wouldn't be paying me in net terms. Net terms meaning they wouldn't pay me until 30 days, 60 days, 120 days, 90 days, after they've had the goods in their possession. Is that a correct way of explaining, sort of? So what?
Christina Langbort
Guest
06:37
you're explaining is what we call our entrepreneurial financing or production financing, which is something that we do for companies once we've had really an established season or two of experience with them. So we've actually seen that the company can shift a quality product and shift one time and then in turn the retailers pay what's expected to be paid. Now the company is going through growth and, as you say, they have all these orders and they say we need X amount against the orders to go into production Because they don't have the cash flow in that particular period. So we would look at the credit worthiness of the customers and we would advance money accordingly when it makes sense. Generally, the way that we operate is we're advancing after the product has shipped until we've established a relationship, and then we can certainly help with finance. We've helped to do hundreds of companies over the years.
Emily Blumenthal
Host
07:28
But to start, you don't, as you say, fund production per se, meaning paying for the purchase order in order for said money to be used to pay for production.
Christina Langbort
Guest
07:38
I can't say that definitively. It's really a piece by piece. The world is changing right now and the retail environment certainly is a little bit volatile. Production financing is a riskier part of the business for non-equity owners. Why is it? The stores could cancel. There's a number of things that could go wrong, depending if you're working on a letter of credit or something like that With your factory. You might have to just come out of pocket for CAD. So let's just say the factory closes down or does it produce your item. There's just like a number of things that could, in a worst case scenario, go wrong. Hopefully it does it and likely it won't. But it's just a little bit riskier to not have seen experience working with the operator of the company, which is generally the Elgar and Escalade business, making sure that they understand margins and understand the business cycle I knew dealt with talented designers where you see gosh this person is.
Emily Blumenthal
Host
08:37
I see their vision, they're really good at what they do, but they lack business sense on such a gross level that you're like are you quick to support them and say, look, I can give you guidance and direction because I see you're capable of doing something? Or is that person a red flag saying come back to me when you have your act together?
Christina Langbort
Guest
08:57
I had the latter part of what you just shared. We're always happy to be a resource in Elk. I mean I'll take meetings with anybody and just kind of guide them along the way, but I could just for personal growth and business. It's very important to have the art and the commerce meet. So it may not be a designer, it might be dorking with somebody, either in the form of a partnership or, if you don't want to have a partner, onboarding somebody really can help with areas of focus that you're not so strong in. Maybe that's also just creating a board of advisors that you can turn to and that can be very helpful to your business.
Emily Blumenthal
Host
09:37
Speaking about board of advisors, do they and again, this is just a dialogue for everybody who listens and your experienced boards of advisors take equity? Or do you pay them? Or is it just kind of the kindness of their heart because they're seasoned in new relationships? How would you define a board of advisors for this kind of person that we're speaking about?
Christina Langbort
Guest
09:57
Well, I would identify those areas where we could use improvement. Maybe it's on the financial side understanding cash flows, understanding P&L and ballot sheets. Maybe it's on margin agreements or dealing with the retailers. Maybe it is talking to those who might have perspective on wholesale versus direct to consumer and what the cost savings going direct to consumer are. But then what are the hidden costs that you may not think about when you are direct to consumer, as it relates to returns that come through and repackaging, A number of things that go into it? Just really identifying those areas where you say what am I not so well-versed in and where could I tap into people for help?
Emily Blumenthal
Host
10:44
Two things. One, how do you feel about brands that have one owner and they're essentially doing everything themselves? It's a problem for scale. I mean, one of the people whom we both know has referred to that as a profitable law firm, in that it's almost like you're doing billable hours as opposed to being able to scale Right your perspective on that, and you know right now you're only as good as your D to C orders Right, Because that's your brands with fans. That's your track set.
11:15
It's hard enough nowadays to get into actual department stores. We know department stores should be the last leg of where you are in terms of growth and development. I think boutique business is always grossly overlooked. You could get a really robust, healthy brand of business selling to boutiques. They pay on time, They'll support you. You could do a lot of out of the box things with them. They're more excited to have you involved in terms of helping sell your goods. They like the idea of being the one who discovered you. I think there's this muddled construct of getting into a department store, of being like you know the end all be all of getting your brand out there. So can you speak to and like in terms of what are hidden costs from a D to C business. I know this is a lot thrown at you, but you are offering so many incredible nuggets that I'm sure people are going to want to re-listen to this like 10 times.
Christina Langbort
Guest
12:07
So no problem.
12:08
As relates to shipping to the wholesale larger department stores versus the specialty, I think you said it very well that the specialty business gets overlooked off and the real benefit about the specialty store business is often it's people that are buying who really know and understand who their customer is.
12:25
They're not necessarily buying on trend, they're buying what's going to sell and ultimately it is a business and you want to make sure that all your product is carried, that it's actually going to perform and it's going to sell.
12:34
Because if you go back to the department stores in some respects just an under and at now, into the month or the end of the season, when the buying a T, where the financial T, look at the numbers and what the sell-throughs are, they're going to either continue or drop lines based on performance, whereas the specialty business tends to have a little bit more mercy, I guess you could say, and a little bit more ability to cultivate a stronger relationship and you can switch things out if they're not selling or just a better overall outlet. Often those come a point where you can ship to department stores, but I suggest no guaranteed sell-throughs. Be very careful what you agree to in terms of marketing agreements and I would suggest not entering into relationship on a consignment base, because it's very challenging for product to sell and for you to get paid, because there's real no incentive for the retailer to even open the box and get your products out of the floor.
Emily Blumenthal
Host
13:36
Let me tell you I always tell designers avoid consignment at all costs, because if you can find someone to buy your goods outright, then go there.
Christina Langbort
Guest
13:46
Nothing is sexy about not getting paid Now the only time I would ever say what inside of model could be like. Okay, maybe if it's one jewelry retailer that you feel this is going to really put me on the map, if it's that key retailer that's getting global coverage, and why.
Emily Blumenthal
Host
14:04
What story is that? Which one would you say that would typically do a consignment basis? That would be a game changer for a brand, in your opinion.
Christina Langbort
Guest
14:12
I mean it really depends on the category, but I think one that could just be spoken about universally Well, yeah, spoken about universally self-purchase. In the UK it's been noted as the best department store in the world. Many times it's where you go to find really cool and interesting collections. I think that would be one that you might consider, assuming that you can afford a worst case scenario that they don't pay you. Not that they don't pay, I'm not saying they don't pay, but I'm saying, in general, a retail.
Emily Blumenthal
Host
14:44
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15:57
Join me, emily Blumenthal, in the Handbag Designer 101 Masterclass. So be sure to sign up at emilyblumenthalcom slash masterclass and type in the code on cast to get 10% off your masterclass today. This is all so interesting. Now, as a factor, and someone approaches you that has a very strong D to C, direct to consumer business, how do you evaluate them differently in terms of being a worthy asset to your brand portfolio, versus a brand that has orders from department stores? Would you look at them saying, well, there's interest from department stores and therefore they're worthy of being part of what I do, or without that, it's just still not worth it? It depends.
Christina Langbort
Guest
16:46
I mean, I'm looking at a strictly jarred to consumer brand right now. It just depends For those companies that are direct to consumer. It needs to really be a business that's growing month to month, that has repeat business and growth, like I said, month to month profitable. We really come apart to mental ideas, the way that we look at the wholesale, because what I didn't mention also is factoring actually developed during the British colonial times when the British were trading with the American colonies and the Caribbean. So they needed the ability to buy merchandise back and they needed to understand that who they were buying from was actually going to head.
17:27
So as long as there have been trade models, there's been a need for factoring. And that translates nowadays into you get an order from Saks or Macy's or Bloomingdale's or Neven Marcus or any other specialty boutique. You need to be able to check the underlying credit of the customer. So that's the one element of what we do, which is the traditional factoring, whereby we're not even advancing money. We're just telling them who is credit where the admin's not, and then they're, you know, in a worst case scenario the retailer doesn't pay.
17:54
Then if we've approved it and we said that it was okay to ship with terms. We're going to take the underlying credit risk in the event of a financial inability to pay. Then we of course have the financing side, where we'll look at. You know, does somebody need help with financing orders or financing invoices that hard? And then we'll look at it from a third perspective. Does this business have a direct consumer component and would our financing model help to support their growth so they go by a future inventory? So we'll look at it kind of in three different bowls and as long as you've fallen to one of those three, you know, we can look at it.
Emily Blumenthal
Host
18:30
Do you evaluate the brand's website, the brand's social? Do you ask for samples of the product? You know, how deep do you go into investing to you to learn about this person and brand, because essentially you're investing in them? Right, and have you said you know, okay, your margins are off, you know you should be charging more, or you should charge yes and yes. So what kind of profit margin do you look for in order to say like, okay, this makes sense.
Christina Langbort
Guest
19:04
I mean if you are selling your product to both sale accounts, you should be at a minimum of 50% margin for it to really be sustainable and make sense. The direct to consumer side should be, you know, 75 to 85% should be a healthy margin. If you're shifting directly, you know, via your website or you're in store. So blended, I would say somewhere, you know 60, 70%. If you're blending the two, d2c and wholesale. You know we do look at a company's website. We'd like to know where the owner is. We want to know a little bit about their background, what their work experience is dead. You know what drives them. Why did they get into this? You know what's the motivation for why they wake up every day and why they're doing what they're doing.
Emily Blumenthal
Host
19:43
I think that's a youth thing. I know other people do that, but that's a youth thing. Look, maybe because you're a woman in the business and there are so, so few I mean I can count on a Fred Flynn Stone hand how many women there are at the level that you're at that do what you do. So I think you know understanding the person and the brand from a holistic level, beyond the numbers, because I think you are always able to see the forest through the trees personally. So, and lacewank yeah, people are listening, it was a good wank because it's true. But I think, to truly understand the designer, I mean I know I've been with you where and it's almost like a shark tank scenario like why was 2017 so great and then you didn't have another good year until 2021. Like you evaluate all those things and think like, oh, they had one bad shipment, they're good scheme and damaged, and therefore they had to sell all that off and do a rebirth and a relaunch and a rejigger. Am I correct to assume that all that gets considered?
Christina Langbort
Guest
20:40
Yeah, absolutely. I mean, there's a level of consistency that we like to see and there's a level of growth that we like to see from year to year. So, you know, we might want to see what was your history in, you know, the past two years, what were your sales history? And then, what do you project the next 12 months to be? Now, it's not to say I'm looking at a company right now that they're just going to be shipping their first season out of winter in the apparel space. So they just, you know they booked 300,000 in orders, broken down with eight different customers, and we're going to look at the different cost different cost, meaning eight different retailers.
Emily Blumenthal
Host
21:14
Yes, Great.
Christina Langbort
Guest
21:15
I think it's like eight different retailers in the state and they have a shipping port. It's brand new, just launched. Now. They have family history in the apparel space, but it's not their family that's doing this. It's the next generation, Right, you know. So it just really debuts. It's not that somebody has to have years and years of experience. As I mentioned, we're unique at Hilda because we're a private bank and so we can look at opportunities really individually and do things that make sense and that feel right.
Emily Blumenthal
Host
21:42
In terms of speaking about handbags, what trends have you seen in terms of brands that you are working with, in terms of leather, non-leather, for sustainable countries, price points? What, in your opinion, is going on for what you do? I mean for?
Christina Langbort
Guest
21:59
what I do, what I've seen over the past couple years. It's been a lot more in the resort there's a couple names that come into my mind who are working with local artisans in whenever areas of the world that are able to scale also, and they're creating really cool seller resort bags that are transferable throughout the year just by tweeting a little bit of the design. But I've seen that I think the price points let's say the contemporary price points, so it's $3,600, are still doing well in the handbag space or the ultra luxury. The ultra luxury just keeps getting more expensive and the demand just keeps increasing, right?
Emily Blumenthal
Host
22:40
This is all so fascinating. Now, when you're saying resort, what materials are you speaking about? Again, I just want to get everything down to a reclock and straw. I would say, okay, and then what do you mean? Yeah, yeah, I mean, I deal with everybody. You know everyone. I mean it's like there's always new things and new people to learn and new people to meet. Having just run an incubator, it was really interesting Like again having dealt with designers for so long, seeing the pushback of designers who want to remain exclusively leather and then seeing the designers who want to remain exclusively sustainable and then trying to decrypt.
23:21
You know, again, everything comes down to customer. Does your customer care and are they willing to pay for it? And you know the one thing I always, always, always, always emphasize with the designers with whom I work take the time to analyze your orders, analyze where they're from, analyze the people who are purchasing and then get it to a dive. And if you're able to understand what they do with those bags, how they use them, and recognizing that 80, 20, that 80% of your business comes from 20% of your customers, are you protecting and fostering and nurturing. And you know, as we say Panuki, are you giving them love to that 20% because you need them to come back, because with a small business, that 20% it's your customer acquisition cost that you don't need to pay for. So it's there, it's free, essentially, if you do the work Like you know, do you know their birthdays? Do you know their family? Do you have a track of the orders that they purchase? Are you able to follow up with them and therefore say you bought this bag six months ago. The weather has changed. Maybe you'd like this bag and do it in a non-obnoxious, stalkering way, those kinds of details that I think are free and there for the taking.
24:41
That, again, for a small business, they just get so swept up and existing that all of these details are so hard to do. But it's there. It's there and it could help your bottom line and it could help you grow your brand and business, especially because so many people and nine times out of 10, it's just then where them and you know a handful of people that they pay to help just to pack and ship and deliver, and perhaps a marketing person, perhaps a publicist, and I tell people start out doing everything by yourself marketing, shipping, packing, pr, everything because unless you know what all those things are. If you start to outsource, number one, you're never going to know how well of a job people do for you or how poor of a job. And number two, you won't know what the return on investment is because you've no experience to understand what it actually is that you're looking for.
Christina Langbort
Guest
25:29
So I'm sure all of that may be fabulous clients. I mean, it really does come to customer service and how you're setting yourself apart from the next person, because the times that we're living in, we want to have somebody that's looking after us and giving us really exceptional service. And you know, I think it's such a great suggestion knowing, be your customer and sending you know birthday revinders or something like that. And nowadays, with AI, it's so prominent in the business world. It's very simple to implement systems and structure into your business as a young startup. And also, I would say, don't discount having interns that you can help mentor and guide, even as you're launching in your way and your math, but also they could bring forth ideas that you might not have been able to think of. So it really, you know, is a situation where both people are benefiting in their journey.
Emily Blumenthal
Host
26:17
Yeah, 100%. You, I know, also travel a lot, lucky you. I guess it's a plus and a minus as a mom. Well, I'm a sedentary, so I'm here, okay, oh, my God, you and I'm sad, you know, because you and my son share a birthday. I, actually, you and my daughter share a birthday, the 22nd or the 21st, because I'm the 22nd, oh, okay, no, July 5th.
Christina Langbort
Guest
26:43
So now she's a birthday.
Emily Blumenthal
Host
26:44
Not on my end, it's just you and my son. Oh, okay, got it. Okay, I mean we could go through my all three kids and cross pollinator, cross champ the birthdays. But being someone who never actually followed anything astrological, I only knew my son and I knew my daughters because she was my first. But with my oldest son, when you're like, oh yeah, what's it like having a sadge? And I'm like, oh, he's a sadge, okay. So now, whenever I hear I'm a sadge, I'm like, oh, it's the end of November, okay, exactly, got it, got it, got it. No, I'm not 27. There you go. Wow, you're good. Well, it's my son's birthday and we share the birthday, that's right.
27:27
Yeah, and FYI, you're, what do you say? In three days you're celebrating your three quarter birthday. Just in case you were concerned yeah, yeah, I am. Everything needs to be celebrated in this house. You don't even know. So, in terms of people approaching you, you approaching people, how do you look for talent? What do you do? I'm sure people find you, but how do you find people? What do you look for that you're like hey, you know, I have something that you might need, like what's your process? Because I know you've got so many people and things going on. How do you work? Because I know people approach you like how does all that work?
Christina Langbort
Guest
28:08
Well, it's always good to get referrals through our clients right, so people that are satisfied with the service that either I give or the company gives, and that's always a great start. Through the internship program that I run, which is a business development internship program, we are constantly looking for new talent and we do that through. You know trade shows, through bashing weeks, through publications. You know various schools that are having competitions just trying to identify who will be the next best. You know company to be attached with that are at a really young stage. I think it's very important to connect with people at the beginning where they're not doing 50 or 100 million, because at that stage you're just transactional and it's all about numbers. Where are you getting the cheapest rate on your knee versus at the beginning? You're cultivating a relationship. There might be mentoring, there might be suggestions, there's interruption and you're really building, hopefully, a long-term relationship. So we'll look at any one of those different scenarios to identify your talent.
Emily Blumenthal
Host
29:04
So it's essentially almost like you're a scout, right, you're trying to get people at the early stage in hopes that you're betting on the right horse, that we see this person, we see their talent, we see what they're capable of Correct. We believe that they will hopefully, with the time value of money that you've put in, that you'll get an ROI or return on your investment for the mentorship, the connections, the outreach and so forth on your end, totally To make sure you weren't Like doing business with people they like and who they feel you know we're there for them.
29:38
Yeah, yeah. And what is your take to what you're saying on working with people who are older, who don't have access to a CFDA or fashion to get into those things? Sometimes that's a problem at all.
Christina Langbort
Guest
29:52
Not a problem at all. As I said, we're looking to work with a company. We'll talk to anybody at any time, Right? But all we're really concerned about are do you have orders from stores that we can offer good credit information on? Is there something that we can offer you that will help benefit your growth? Right, If that's there, you know, I don't need them to be involved in any specific organization or know anybody. It's just is there a need for what we offer? And if there's not, then we're always happy to be a resource.
Emily Blumenthal
Host
30:24
Right, right, I think this has been phenomenal. Thank you, christina, you are an absolute one of one. I always say that Hilden is very lucky to have you because Thank you, emily, you're so sweet. Well, I think you know, fostering relationships, developing relationships, that is a time, value of money, and you can only do that with a company that knows what you're going to bring in is going to potentially bring them business, and sometimes it does and sometimes it doesn't. But I think also taking the time learning about the person you know I say kindness is free, but not everybody has the time for it. I think you check all those boxes. So if someone wanted to reach out to you, follow up with you, how can they find you? What's your social? How can they track down Christina of everything.
Christina Langbort
Guest
31:15
Absolutely. I mean, my email is very easy it's just cm at Hildun, h-i-l-l-d-u-n. Where you could find me on, you know, instagram or LinkedIn. I don't have a TikTok, you don't need it. I know of I might have one, actually that I started with COVID but I'm not actually using it. But you know a whole thing to get a little bit more visible out there over the next year and would be happy to talk to anybody and offer any help or guidance that I get.
Emily Blumenthal
Host
31:39
Oh my God. Christina, thank you so much for being part of the Handbag Designer 101 podcast and you know we will for sure be sending more people your way. Thank you, emily.
Christina Langbort
Guest
31:49
You're so awesome and I really appreciate you having me on your show.
Emily Blumenthal
Host
31:53
All right, thanks, love. Talk to you soon, bye, bye, thanks for listening. Don't forget to rate and review, and follow us on every single platform at Handbag Designer. Thanks so much. See you next time.
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