In the era of big luxury group mergers and acquisitions, private equity deals and “will someone or won’t they finance a Nicolas Ghesquière collection” speculation, it can be easy to forget there was a time when many designers got started by simply going to the bank.
Consider Dries Van Noten, Martin Margiela, Walter Van Beirendonck, Veronique Branquihno and Raf Simons – all one-time clients of banker Erik Van Den Eynden, who as a result may have done as much as anyone to launch the Belgian invasion that changed Paris fashion and continues to this day, with Mr Simons as the artistic head of Dior.
Yet Mr Van Den Eynden, who favours banker suits and describes himself as “more of a prêt-à-porter guy”, did not set out to be a fashionista financier.
He had been working at Banque Bruxelles Lambert in Antwerp when Mr Van Noten, already with several collections under his belt, came through the door in the early 1990s seeking help to expand his business.
Mr Van Den Eynden’s initial impression of the industry was not favourable. “At first glance, it’s a banker’s nightmare,” he says, noting that a designer’s vision may not end up on a sale rack for two years or more. In between, there are costs to cover for travel and materials – not to mention the huge investment of a catalogue.
Yet Mr Van Den Eynden had experience financing another volatile industry – Antwerp’s shipping companies – which gave him a strong stomach. He decided to place a calculated bet on Mr Van Noten after glimpsing the excitement at his Paris show, and seeing the interest of established customers, such as Barney’s department store.
“If we didn’t have the proof of the Barney’s sales, then we wouldn’t have financed it,” he says. “The most important thing after the show is that the buyers come to the showroom,” Mr Van Den Eynden said. “Because otherwise you can do one show and it’s over. You just burn the money.”
Mr Van Noten not only became a loyal customer but soon begat other business. “It was really word-of-mouth,” Mr Van Den Eynden recalls. “People were sent to us because they were looking for people who understood the sector.”
In addition, Mr Van Noten introduced Mr Van Den Eynden to up-and-coming talent, such as Mr Simons. “It was Dries who said to me, ‘Raf is one of the biggest talents in Belgium. You have to talk to him.’”
While Mr Van Den Eynden describes Mr Van Noten as a rare combination of artistic genius and management rigour, he inevitably confronted the same problem with other fashion clients: highly creative individuals given to obsessing over denim or the merits of mauve tended to overlook mundane tasks such as collecting payments.
“For them, it’s a new world,” Mr Van Den Eynden said. “They don’t know about letters of credit and payment guarantees. Never heard of them.”
So, in addition to the usual banker tasks of lending money, Mr Van Den Eynden strived to provide a nuts-and-bolts business education to complement the fashion one provided by Linda Loppa at the Royal Academy. He stressed, for example, the importance of binding sales contracts to minimise risks and ensure buyers made good on air-kissed promises.
These days, the economic crisis has dimmed the prospects for a new crop of young designers. Mr Van Den Eynden has also moved on, trading Antwerp for Brussels, where he oversees a broader portfolio for ING, which bought BBL in 1998.
“It was a great time,” he said, looking back. What advice would he offer an aspiring fashion financier? “You need to have faith and a little bit of trust as a banker. Sometimes they have a bad season. You can’t be too nervous about it.”