When Fashion Forms experienced a year of record sales growth, they were beyond thrilled to take on the new business. However, when their factoring company became tighter with funding, they quickly found themselves in a bind. We want to share how Fashion Forms capitalized on a new solution to continue growing their business with LSQ's invoice financing.
To Ann Deal, Owner of Fashion Forms — the leading provider of women’s specialty bras and accessories — 2019 was known as a year of missed opportunity. Her company had experienced massive growth with its products landing on the shelves of Big Box retailers like Target, Walmart, Macy’s, Saks Fifth Ave, Bloomingdale’s, and more, closing new major accounts faster than she could track. Demand for Fashion Form’s sticky bras had never been higher, but things weren’t exactly in order with her current factor.
Despite showing record-breaking demand for the year, Fashion Forms began experiencing tighter restrictions on their availability, leading to a loss of orders and many chargebacks from their customers. Kevin Silacci, VP of Finance at Fashion Forms, estimates they lost upwards of $7 million in sales due to the lack of funding.
“We found ourselves in this position where everybody wanted our products, and we had to choose who to give it to because we couldn’t keep up with the orders.”
Not only were they losing money from missing out on growth, but their customers started to penalize them for not filling their orders. At this point, Ann decided the opportunity cost of using her current factor was too much to bear and began searching for a new source of capital that was more palatable to her business.
No longer able to get the funding needed to meet their demands, Ann decided to speak with her contact at Bank of America to discuss Fashion Forms options. Ultimately, she wanted Fashion Forms to become bankable within a year but was unsure how to get there. Her banker mentioned LSQ could help. Shortly after, Fashion Forms secured an advance rate much higher than the previous factor would grant them, unlocking their access to additional working capital.
In what seemed to be perfect timing, Ann scored her source of financing with LSQ a week before the nationwide shutdown. And while she received some PPP funding during this period, she claims, “LSQ’s factoring line provided the most support.”
“If we were using our previous factor, we may not be here right now.”
Fashion Forms quickly recovered their revenues to pre-COVID-19 levels thanks to the increased availability provided by LSQ. Using their inventory and open invoices as collateral, they're now able to request same-day funding (usually within 2-3 business hours) to fill large sales orders continuously.
"Our business needs the availability to keep moving forward, and LSQ has it."
In addition to timely funding, Fashion Forms receives a dedicated service team and 24/7 access to LSQ's Dashboard, which provides real-time reporting and detailed insights into the credit health of their customers.
"Anytime we need an answer, we get it right away. LSQ's team is very easy to work with."