This week, we take a look at the increasingly difficult prospect of running an independent fashion brand through the eyes of a founder whose brand is shutting down now.
Kristen Fanarakis founded the independent fashion brand Senza Tempo nearly a decade ago. It’s one of the many small designer brands selling small-batch dresses using high-quality materials imported from Italy and Switzerland.
But on January 6, Fanarakis sent an email to the brand’s email list, along with an accompanying post on the brand’s website, communicating that Senza Tempo is shutting down. Despite having a small cadre of loyal customers, some of whom would buy one of every piece Senza Tempo produced the moment it was released, the financial reality of running a small brand became untenable.
“Running a small business is always hard, but the number of obstacles to success in fashion grow by the day, between reaching customers and rising costs,” Fanarakis wrote.
Senza Tempo is just one of many small fashion brands that are closing or have closed in the last year. Mara Hoffman, The Vampire’s Wife, Calvin Luo, Rhode and Harlow all closed in the last 12 months. At the time of her brand’s closure in May, Hoffman said that “the demands that are on a small company financially make it almost impossible to be privately held and run after a certain point.”
Fanarakis said part of the blame for the struggle of small fashion brands lays in the constant undercutting by ultra-low-cost marketplaces like Shein.
“Shein is the common punching bag, but it’s true of all sorts of big marketplaces like Amazon,” Fanarakis said. “I see dresses out there selling for $50 with piping and pockets. Something like that takes six hours to sew by hand, and the cost is way higher. It’s a classic system where big companies take on losses [selling cheap goods] long enough to wipe everybody else out.”
Based in Los Angeles and sold entirely online, Fanarakis employed local artisans in L.A.’s Garment District to make Senza Tempo’s clothes. One of Senza Tempo’s most popular pieces, a St. Tropez-inspired tunic dress called The Brigitte, was priced at around $1,000. But Fanarakis said she never actually made money on it and should have priced it at closer to $1,800 to make a good margin. She resisted because she didn’t want to scare away potential customers, she said.
“A lot of times, small brands will underprice themselves for that reason,” she said. “Gucci can charge an appropriate price because everyone knows Gucci.”
The pressure from fashion behemoths isn’t just affecting small designers, but it’s also spilling out into the sources of their materials. Senza Tempo was one of many brands, including Chanel, Saint Laurent and Hugo Boss, to make use of Swiss cotton from a 210-year-old mill called Cilander in Switzerland. But Cilander’s clients received a shock early last year when the mill shut down, citing a lack of demand and a tough economic environment that made operations unprofitable.
Hundreds of small mills have closed in Switzerland over the last decade, and exports of Swiss cotton have fallen by more than half in the same period. Italy, another hub of high-end fashion materials, is experiencing a similar crisis. In the first half of last year, over 300 mills, tanneries and dyeing factories closed in Tuscany.
With smaller or artisanal mills shuttering, independent brands are forced to rely the largest suppliers, which tend to only do business with large brands producing higher volumes of clothes.
“I did small runs because I couldn’t do orders on demand,” Fanarakis said. “In some cases, a small business can’t even get access to the spaces that big brands can. Some retail properties won’t rent to you unless you’re big enough. Housing costs have tripled. You’re getting squeezed on all sides.”
Fanarakis said she’s worried for the future of small businesses in America, even beyond fashion. Pressure from mega conglomerates on indie brands has been a concern for decades, but she doesn’t see any sign of the situation abating. She marketed Senza Tempo through social media, pop-ups, influencers and more without seeing much return. Independent brands across the industry are aware of just how tough the market is right now. Phillip Lim, founder and former designer of the brand 3.1 Phillip Lim, told Glossy at New York Fashion Week last year that the greatest challenge facing indie brands is “simply existing.”
“That is the ultimate statement today in the world of mega conglomerates,” Lim said. “For an independent brand like ours, we don’t take anything for granted. I serve the customer and the customer is inundated with choices. How do you make something that can cut through all that noise and stand for something? Because that is what will make [the customer] choose you.”
Senza Tempo had no outside investors and was solely owned by Fanarakis. She resisted working with venture capital firms out of concern that their focus on returns would pressure her to compromise on quality and her commitment to manufacturing in Los Angeles.
“If I could do it again, I would have focused on our silk T-shirts,” Fanarakis said. The T-shirts, which sold for $80-$200, were best-sellers and profitable. “There’s not a lot of other brands making them. They’re hard to find. It wasn’t until too late that I realized how much they resonated, but that’s the nature of business.”
For Fanarakis, it’s time to take a break from fashion. Before founding Senza Tempo, her background was in finance working at Citibank and other Wall Street institutions. She’ll continue her work at the Milken Institute, a non-profit think tank in Washington, D.C. where she serves as associate director of small business policy and innovation.
“I still love fashion and style, but after doing it for a while, it kind of makes you want to just opt out of the system,” she said. “I’m going to support small brands. I’m going to shop at bespoke shops and help them stay alive. But other than that, I need a break from fashion.”
Executive moves
- Mayhoola, the Qatari investment firm that owns part of Valentino, appointed former Chloé chief executive Riccardo Bellini as its new managing director. Bellini will help run the company as it seeks to expand its fortunes in the luxury fashion world.
- REI CEO Eric Artz is stepping down and will be succeeded by Mary Beth Laughton, a former Nike exec and current member of REI’s board.
News to know
- President Trump’s first few days in office came with a flurry of executive orders and policy changes, as well as the beginning of a countdown toward his long-threatened tariffs on countries like China and Mexico. Those tariffs could begin as soon as February 1.
- China’s luxury market, after a long period of decline, is finally stabilizing. According to a report from Bain & Co. released on Tuesday, China’s luxury sales will likely remain flat through 2025.
- P180, the luxury venture firm co-created by former Vince CEO Brendan Hoffman, has acquired Vince. Hoffman will assume his former role as CEO and now owner. Hoffman told Glossy in October that one of P180’s main goals is “to gain back margin” for fashion brands and find new ways to help them achieve profitability.
Stat of the week
- Over $400 million. That’s how much the Midwest-based fashion retailer Evereve is on track to earn in revenue this year, up 160% over the last five years. CMO Tom Nowak told Glossy the company has only begun seriously marketing and expanding outside of its home territory in the last five years.
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