Jake Chicago Not Paying Its Bills?

[lechon&rice]

I think it's unfortunate. From my experience shopping at Jake, I must commend them for their customer service. What they have to improve on, I think, is their inventory. They sell high end brands, but they choose the most basic or generic pieces from these brands like a black wool/cashmere V neck sweater for $600. I can get something like that from J crew. They sell so many boring $100 graphic tees that have uninteresting graphics by unknown brands, and fashion jeans. I think the previous owners also acted as the buyers and their personal taste reflected their inventory. Also, I think they have to compete with other independent stores like Hejfina, Apartment Number 9, Barneys, who all have better selections of merchandise.

Jake needs to carry more middle-priced fashion forward brands like Engineered Garments, 3.1 Phillip Lim, and the likes. They need to improve on variety. their pieces need to compliment one another like if you are going to sell very nice expensive knits, you need to have nice pants to go with it. And if these pieces are more casual pieces, then sell a more casual coat and accessories to go with. So that when a customer goes there to buy one thing, he or she will end up buying more. The old jake was like a boring hodge podge of expensive items that makes customers feel that they cant rely on Jake for their needs. Their store environment needs to improve as well. make it more inviting and add more interest to define the Jake retail image.

 

[DeadDJ]

Originally Posted by kiya

As a retailer that has three stores it hurts my head to read an article like this.

-They scammed the designers, pure and simple. As a responsible business person, you stop taking in inventory if you know for a fact you cannot pay the invoices, and if you had half a business sense you would stop early on far before you got your first call asking for money.

Originally Posted by LA Guy

Having represented some small designers in the past, I'd have to say +1 to this.
Thanks for substantiating. Good to have some opinions backed by industry experience (unlike mine). Definitely want these quotes on the next page.

Originally Posted by robin

The $5 million number might be possible. They had two store locations, with one being in the north side area right among high end stores like Hermes, etc.
If you're referring to the Gold Coast location, I was in there in March. If they're making their money there, it was NOT in menswear. Unless they were holding stock, I saw a shockingly limited amount of men's items - enough that I browsed for 1 minute... kind of looked around like an idiot expecting more for 2 minutes... and left. I didn't even bother to look at the other location after that.

 

[paulesquire1]

Originally Posted by robin

Ship first, get paid later is a practice that goes in all sorts of industries and businesses. The decision to ship on NET30 or whatever terms should be based off credit worthiness and other rational factors though, not on how you think you're good buddies with the store owners.

qft. ship them cod, cc, or not at all. it's time to cut ties. image stores are great to be in for a young designers but when your not getting paid, find another store that does.

 

[colin_]

some labels are so small they just want to be in these stores and the only way is with these terms, and these F***ers like jake take advantage of it, dont pay, dont answer. fuckm

 

[sonicvoodoo]

Back in da day, designers and apparel companies in general, used factors (banks) to clear and extend credit to retailers. It was considered way to dangerous to "hold your own paper" and ship stores.
Giving the factor a few points was a sound investment because you never had to worry about getting paid but it also limited who you sold to because not everyone could pass the factors credit check.

I don't know what goes on today but I'm confident that more designers/manufacturers will be returning to this system. They need to in order to protect themselves.

some labels are so small they just want to be in these stores and the only way is with these terms, and these F***ers like jake take advantage of it, dont pay, dont answer. fuckm

this is very true and these designers are playing Russian Roulette

 

[LA Guy]

Originally Posted by ghulkhan

so fok are they still paying their affiliate dues?

C'mon man, you know I won't discuss this.

 

[constant struggle]

Originally Posted by Rye GB

Perhaps stores should only offer 75% loyalty discounts to customers who provide receipts that show they made full price purchases earlier in the season.
Too many customers take for granted end of season sales. It's especially advantageous here in SoCal as there's generally no weather change so why buy tee's, button downs and lightweight outerwear at full price in March when you can get them for cheap in the June sales and still get months of warm weather wear deep into Fall.
Stores should manage inventory much better so they don't have to sell so many things on sale, and until they do, the consumer will take advantage of them.

Take a look at a store like self edge, they don't have end of season sales at all, people know if they want their japanese denim that only self edge carries, they either need to pay full price, wait for a possible 10% off sale (a few times a year) or proxy from japan and deal with all the crap that comes along with it.

 

[WhoKnewI]

Originally Posted by constant struggle

Stores should manage inventory much better so they don't have to sell so many things on sale, and until they do, the consumer will take advantage of them.

Take a look at a store like self edge, they don't have end of season sales at all, people know if they want their japanese denim that only self edge carries, they either need to pay full price, wait for a possible 10% off sale (a few times a year) or proxy from japan and deal with all the crap that comes along with it.

+1000

Retailers like the GAP have this exact problem. That, and they sell crap.

On a slightly unrelated note, I wonder how Tobi is doing. I get an email for a 30% off coupon at least once a week.

 

[sonicvoodoo]

many retail sales are subsidized by manufacturers selling off price goods. It's all part of the game that I have watched get progressively worse over the years. Sales are a mainstay in retailing and the consumer has been trained to wait for deep discounts. I don't know if this learned behavior can be undone.

Also, don't forget that this is a 2 way street. Manufacturers have been hit hard by the economy and are offering deep discounts to retailers.

This coming fall is really the first season that both manufacturers and retailers had the chance to adjust production and buying respectively. It should be very interesting to see inventory levels from here on.

 

[Doctor]

Originally Posted by kiya

As a retailer that has three stores it hurts my head to read an article like this.
A few thoughts..

-They scammed the designers, pure and simple. As a responsible business person, you stop taking in inventory if you know for a fact you cannot pay the invoices, and if you had half a business sense you would stop early on far before you got your first call asking for money.

This is 100% true.

 

[Jake431]

I have mixed emotions reading this article, for a few reasons. It does sound like they were scamming designers, and that's too bad. But my experiences in the store were mixed, at best. They were very friendly, but frankly, they had very limited understanding of denim - I am not a deeply knowledgeable denimhead and I could school their staff. I also agree their choice of designers, while apparently critically well received, based on the article, I always found bland, and uninspired, more geared to yuppies with extra cash instead of fashion conscious individuals. Nevertheless, I hope they manage to make it and grow from these hard times, and who knows, maybe the store will develop into something more substantial.

 

[Doctor]

Originally Posted by indesertum

i've always wondered why designers would ship out clothing to retail stores without even getting paid. are designers typically promised interest or higher margins if the clothes are paid for at a later date?

If you run a business in pretty much any sector, you'll do it like this. I used to run an I.T business and all stock was ordered on a 30-day account capped at $100,000. So I could order $100,000 and not be obliged to come up with payment or make any guarantee that I could even cover the cost of the goods for 30 days. And I hit my cap regularly merely because I needed a lot of gear in the line of work I was doing. The supplier in question had multiple problems with companies going bust and simply not being able to pay their accounts.

As mentioned elsewhere in this thread, however, any responsible business owner treats their supplier with a bit of respect. You pay your accounts on time and if you know you can't pay for the stock DON'T ORDER IT.

It's the nature of any industry - but 90% of businesses know when they're hitting a rough patch and do something about it. It's only the odd scumbag that milks their supplier for all they're worth right until their dying hour with no ability to pay for any of it.

 

[Lostinthesupermarket]

They sound pretty f****n' shady. If the article is accurate it sounds like they transferred ownership of the assets of their original company ( which is the one that legally is responsible/ accountable for the debts) to another company, the ownership of which is unclear ( but you could take a wild guess at who it might be). That's the bit that really looks unethical.

So it sounds like there is no functioning legal entity for their debtors to recover their money from. And yet they are still in business. I'd say they're betting that the designers can't afford the legal costs that would be associated with holding them personally accountable .

Sometimes you eat the bear and sometimes the bear eats you.

 

[chorse123]

Mr. Lawson said he empathized with the designers who were owed money, but he noted that the store had paid more than $10 million to designers before spring 2008, when its problems began.

I like that logic. We paid for a bunch of orders in the past, so lump it.

Mr. Lawson said the store is now prepaying vendors for merchandise.

Ha. I'm sure their vendors gave them much of a choice.

 

[Mauro]

LOL!!!! you guys kill me and I am sure I will be putting my foot in my mouth AGAIN.

I am sure I will be the next to go. The nicer you are the faster people take advantage of you. That is a fact.


If my customers don't "BUY" the goods I sell at retail I will be out of business. However everyone is looking for a sale..... 80% of the forum (as a whole) are sale shoppers.
I blame this on big business and department stores for making quality sought after goods water downed.
I can't speak for Jake's and I don't understand how they could go that far into debt. That boogles my brain. Every store owes something, period there are NO exceptions.

I have cut my designers back to the ones I know that will sell. The catch is will the consumer purchase my "BUY' what I am selling. If a young designer or established designer wants to be in my store they will sell me on my terms and my terms only. I can't take a risk of trying new brands anymore and won't be subject to what Jakes is going through.

With what I offer and the perks I give ( along with the other affiliates)EVERY Sf'er with the means should shop with me and the other affiliates first. If you want to help that's the only way.
You can't make everyone happy, it's impossible. If I had a 100% sell through every year I would be the worlds richest man.
the market is so unpredicatable and people are motivated it seems only by deep discounts or truly unique product ( like self edge).

I think there is a HUGE mis-understand in the margins in retail for the designer and retailer. Once again blamed on department stores with their HUGE ******* sales that go back to the designer and ask them for money so their margins can be whole. Small stores don't get that, they go out of business.

The article on Jakes is SICK. The designer are just as much at fault as Jakes. Designers want to be in the "A" stores for brand recognition but the guys at Jakes suck too for clearly ******* the designers. There is more to it than this that does not need to be crossed over in to non- retail world.
These are really bad time and designer clothing in NOT a necessity its a luxury so hopefully people who are into nice things will pony up to keep a specialty store special.

If CIT does go belly up then we will probably really fucked. Young designers won't get the money they need from the bank to fill production orders. sewing factories will close which means the fabric mill will close or only work with BIG companies that can make their miniums...etc

So if the consumer doesn't buy the retailer go down. If the designers can't get the money based off order form the retailers they can't produce their product, they go down. If all the little designers start going factories which are closing by the day will be gone ...and so one.

It's a very layered business just take that in mind.
Support the affiliates and turn more people into Style Forum so maybe they will support the affiliates and you will have EVERYTHING you need.

I am sure that if enough people wanted a particular brand one of the 15 affiliates would be more than happy to get it for you.
It's easy to sit back and cast judgment especially when you know NOTHING about the business.

The affiliates are starting to get Fall'09 in right now let's see how that goes. everything I looked at was amazing and i hope everyone likes it as well.
I for one have dropped womens like a cheap handbag. I will focus on mens with the brands I carry and Wolf Vs Goat. So if the designers are game and you want me to carry something that will sell I am here for you.
Best,
Mauro



Kunk- I won't get fat and I am not ****