Sustainable clothing brand Minimalism Brand experienced challenges in cash management, despite its high turnover
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Learn how this company overcame financial difficulties in an interview with its CEO and co-founder, Pepe Martín.
Billing too much and having a lack of liquidity? Well, although it may sound very strange at first, it can happen. In Sage Advice Podcast I interview Pepe Martín, CEO and czech republic email list co-founder of Minimalism Brand , a sustainable alternative clothing and accessories brand that faced a challenge in terms of cash management.
This company makes and sells basic clothing and accessories made from recycled and organic materials. Their goal is to make the product durable, functional and useful. They understand sustainability in terms of ensuring that a product is of quality and lasts over time so that you don't have to buy another one.
Start of marked textTWEET IT! The lesson from @MinimalismBrand: when billing too much leaves you without cash. Strategies to overcome it.End of marked text
Origins and development of the company
The idea arose as a game between Pepe and his partner Victor (although now there are six people in the business and it is Jesus who accompanies Martin at the helm). They simply came up with the idea of selling a handbag that was working very well in the United States. Combining the knowledge of both, they set up the infrastructure and in one year they managed to sell about 150,000 euros worth of handbags and the second year they sold 25,000 units. So they asked themselves: could this be a profitable business?
The problem arises when they have more requests than stock. To the point that they had delivery arrears of about 500 bags. It took a month and a half to serve the orders. At that time, the client did not understand these delays, which today the company, due to its more solid structure, could compensate in some way or offer alternatives.
Secrets of success
After this, they decided to get into another one. Martin says that, despite these stock shortages , they are considering launching new products. This idea comes from their experiences told on the blog. They had a good community and, together with other contacts, they asked what products they would like to sell. They started with men's t-shirts, then sweatshirts, underwear, backpacks, etc. Little by little they improved their products and their manufacturing.
They also continued with the strategy of continuing to ask their community about the next products to launch. In fact, the next one they are considering is for children, since their target audience has children.
It is a rather peculiar concept for a clothing brand, because they do not have a logo. They prefer that customers talk about the brand and not the image. However, as Martín points out, “doing advertising with television or influencers does not make any sense.” However, they are doing well this way.
Perhaps another reason for Minimalism Brand's success is its transparency. They even publish their billing information on their website. People who buy from Minimalism empathize and are conscious buyers , who give importance to the reasons for their purchases, who know what they want to buy and consider where the organic cotton used to make a garment comes from, for example.
Minimalism Brand's customers are interested in knowing how much it costs to manufacture a t-shirt in Spain or Portugal and understand the profit margins and costs.
Living is urgent: Billing like never before and suffering from a lack of liquidity
With all this, and a well-established brand, in 2021, with the “Living is urgent” campaign, they faced a strong period of lack of liquidity, which seriously compromised their treasury management.
They signed a contract with an agency for a cancer campaign in which various companies collaborate. To do this, they ordered 1,000 T-shirts. The campaign was launched, aired on television, and in less than 48 hours more than 20,000 T-shirts were sold (their production capacity was about 1,000 T-shirts a week ). So they had to advance their own money to buy organic cotton, given the lack of liquidity to produce the necessary volume. They began to have expenses that were beyond their control.
