Caprice: By Caprice
The model-turned-lingerie mogul on why the recession nearly killed her business
Supermodel Caprice spent most of the late 90s gracing magazine covers and filling tabloid column inches. But in 2000 she signed a licensing deal with department store Debenhams to stock a range of lingerie bearing her name. Similar deals are commonplace now, with everyone from Elle McPherson to Kelly Brook lending their names to high street store ranges. It’s a lucrative business, but for Caprice, too much of that profit was going straight to the retailer, so in 2006 she bought back her licence and decided to go it alone.
The By Caprice range secured an impressive array of high street and online stockists including Debenhams, ASOS and Littlewoods, and for nearly two years it looked like the model-turned-entrepreneur had carved out a healthy chunk of the market for herself. But the recession hit Caprice hard. After losing £1.4m on the exchange rate alone, she restructured her entire model, cut whatever costs she could and took a hit on her margins just to survive. Eighteen months on and the company’s outlook is decidedly perkier. Here, Caprice tells Startups how she pulled through, and why becoming an entrepreneur is the achievement she’s most proud of.
Was there any point during the last two years when you thought you’d lose your company?Yes, 100%. The recession absolutely devastated me and my business. I started out as a model, looking into the camera with the right pose – that’s not exactly brain surgery. Now here I was running a mini empire smack bang in the middle of a recession. I lost £1.4m on the exchange rate alone and the retailers wanted more discounts and much longer payment terms. I’ve put hundreds of thousands of pounds of my own money into this so it was very upsetting.
What did you change in order to save the business? Well, because the biggest problem for me was exchange rates (I buy in dollars and primarily get paid in sterling), the first thing I had to do was learn to buy currency more effectively. I also started being safer with the amount of stock I purchased and I cut business expenses in half – posting things instead of sending people out in cars to deliver – that all adds up. I also upped the ante with my product which involved cutting my margins in half. In a downturn you have to give the customer a better product. They’re not impulsive buyers anymore so you have to give them quality that’s also cost effective. Another step I took was to cut out the middleman company that previously facilitated all my orders. I just had to learn to do it all myself and, believe it or not, it’s been a pretty smooth transition.
Is the business in better shape now than before the recession? I’ve learned a lot of valuable lessons over the past 18 months. Because of this downturn and all the mistakes I’ve made I now know better for the future. The business is doing ok now, so when it starts to make serious money again, I’ll be in a better position to grow it. We’re having a phenomenal season at the moment. The recession is now a part of my past and I’m smarter and better for going through it.
What’s your relationship like with your bank? I’ve had an ongoing relationship with my bank for the last eight years and even for me, with the kind of money I had in my account, it still took time to prove myself to them in terms of the business. Unfortunately for small businesses it just takes time. I’ve slowly built up trust with my bank over the years and we now have a very strong relationship. My advice to any business owner would be not to give up, and grow with the bank slowly.
You now sell your range overseas. What has international expansion been like? To be honest, it’s a pain in the ass. My goods come over to the UK where I pay duty and VAT, and then they’re shipped elsewhere and I have to pay again. On top of that there are all the transport costs. I’ll come up with a more efficient system eventually, and as the size of the orders increase, costs will come down.
Why did you choose to set your business up in the UK instead of America? The stakes are much higher out there, and of course I want my business to be trading there eventually because if you’re big in America then you’re a success all over the world. But it’s much more expensive to do things like marketing out there because of the size of the country. I want to be one of the biggest lingerie companies in the world and England is an excellent training ground. It was the right choice for my start-up.
Have you always wanted to be an entrepreneur? No. I only really started to consider it about four years ago! A career in modelling doesn’t last forever. As you get older you have to consider your options and decide what to do next. A lot of people in England knew who I was so that’s thousands of pounds’ worth of free marketing right there. In that sense, being a celebrity was a big advantage for the business, but it was also tough initially to get people to look past the stereotype and take my proposition seriously. The harder you work for something, the bigger the reward and the more you appreciate it. Out of all my achievements, this business is definitely the thing I’m most proud of.