Andy Thê-Anh Sees

Life After Recession

Steps Include Bringing On Board New

President, Production Manager In

Last Few Months; Tariffs Make It

Prohibitive To Produce Overseas

By Richard Collings

Published: September 29, 2009

   It was just over a year ago that Andy Thê-Anh, the private Montreal-based fashion business, changed ownership, bringing on board a group of private investors that would provide the resources to propel future growth, said Etienne Lecompte, the company’s president.

   But when the recession hit, sales at its retail stores dropped substantially. As a result, the apparel business had to restructure, or rather, structure the business in response to the economic downturn, and “return to the basics.” Business plans that were to lead to a hoped-for increase in revenues were nixed, Lecompte explained.

   Lecompte, who was retained three months ago as president after a brief stint as an external consultant to the company, is a part of those restructuring efforts.

   Despite the difficulties, Andy Thê-Anh forged ahead with a store opening and hired a new production manager who had experience working with factories in China and India.

   The company also brought its sales organization in-house and placed new sales professionals in the field to more effectively drive orders for the company’s products.

   Due to those moves, the company found its footing, with production now “on time and on spec,” yielding stronger relationships with retailers such as Neiman Marcus, which it also works with concerning e-commerce efforts.

    E-commerce for the company is described as a natural progression that Andy Thê-Anh hopes to “bring in harmony with retail,” Lecompte said.

   Today, the company is a stronger business, though small with revenues between $1 million to $10 million, but poised to become an international brand, he claimed.

   With three of its own boutiques and tentative plans to open a couple of more in one-to-two years, as well as explorations into launching an independent e-commerce Web site, which wouldn’t be difficult since it is already experienced in managing inventory, Andy Thê-Anh could realize its goals.

   Currently, Lecompte described retail sales as a bit soft, with projections for mild growth through the second half of this year and hopes for strong growth within its wholesale division.

   Despite the change in ownership, the designer behind the label whom the company is also named for, Andy Thê-Anh, continues to own a stake in the business he launched in 2006. 
   Montreal-based Catsima is the fund that likely acquired a majority stake in the company in July of 2008.
   With the restructuring of the business, Thê-Anh can now focus on the creative side.

   In terms of production, the Canadian fashion business produces 80 percent of its clothing domestically with the remainder manufactured in China.

   Lecompte said it is cheaper for Andy Thê-Anh to produce mostly in Canada because of the tariffs the government has levied against apparel imports. It is due to those tariffs that the company will likely increase the percentage of clothes made in Canada, he said.

   In fact, a majority of the company’s suppliers are located within walking distance of its Montreal offices, Lecompte said.

   The one area, however, it is not most cost-effective to produce in Canada is when labor-intensive techniques or hand-made skills are required such as in creating the beading or the pleats for a garment.

   Although India was considered for such hand-made garments, the company discovered a factory in China that not only achieved the level of beadwork desired, but also brought the piece to life with superior inserts, creating something that was lighter and a better quality than the original design.

   While tariffs make it prohibitive to manufacture overseas, Lecompte does not endorse the idea, which he describes as protectionist, ultimately resulting in less rather than more economic growth.

   He said that such economic barriers would shut developed nations out of growing markets such as China’s, changing little.

   Concerning runway presentations, the label has traditionally shown during Montreal’s fashion week, and will present its next runway collection in Toronto.

   In a few seasons the company plans to show in New York City during its famous fashion week, although Lecompte said it is a delicate balance between maintaining one’s roots and where you show, and it something the company needs to further think about.

   Regardless, he does see runway shows as crucial to showcasing a designer’s vision to the consumer, and does not see it as something that should be interactive.

   Pertaining to viral marketing, Lecompte is not hesitant to pronounce it as the right medium for brands to interact with their clientele. By going directly to the core customer via the internet, which can be tracked and measured, labels can likely gain more traction than through traditional magazine advertising.

   Andy The-Ahn’s client is described as a modern professional woman who desires an attention to detail, and an edge to her look, Lecompte added.

   With strong financial backing from investors who are willing to fund promising ventures, Lecompte said, as he insisted that a full recovery is right around the corner with buyers beginning to open up, he thinks he sees a light at the end of the fashion tunnel.

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