While local fashion boutiques are struggling due to the pandemic, small Quebec designers are suffering from the situation. Some are questioning a business model that contributes to weakening them.
© Jacques Nadeau Le Devoir
La designer Olivia Mansveld
On March 2, Montreal boutique Station Service, renowned for showcasing local designers, publicly announced its permanent closure, prompting empathy and consternation from customers. About twenty creators were in shock, because the store owed them a total sum which they estimate at more than ten thousand dollars, of which they will probably never see the color.
Olivia Mansveld, of the Olive Rose studio, is one such designer. She creates colorful tops entirely at home, often from reused materials. She started doing business with Station Service last November as part of the pop-up holiday store called La Petite Station, which was recruiting new designers for the occasion.
“I was very excited, because it was my first opportunity to sell several pieces at the same time in a Montreal boutique,” says the rookie designer, in the middle of her workshop filled with spools of yarn and patchwork sweaters.
To participate in the event, she had to pay a $75 registration fee. According to the contract she signed, 50% of the sale price would be given to her, while the other 50% would go to the store. She would only be paid for the coins sold, once the event was over, and would have to collect the remaining coins without compensation.
This way of proceeding is called consignment and is quite common in small fashion boutiques in Quebec. It allows store owners to offer collections to consumers, even if they don’t have the cash to buy them or don’t want to take the risk. Some designers supply shops this way throughout the year.
For his part, M.me Mansveld was happy to have found takers for a dozen pieces as part of La Petite Station. Unfortunately, she never received her due.
Delays for months
What Mme What Mansveld didn’t know was that many of the designers had also been experiencing significant late payments from Station Service for many months. One of them is Mercedes Morin, who works with her mother in a bright studio on Fullum Street. Mme Morin had been selling his retro chic clothes at Station Service for regarding five years, also on consignment.
It was when the store moved to larger premises in the spring of 2021 that the designer began to notice delays, sometimes of several months. “In mid-September, I was hesitant to make any more deliveries to him, I was tired of the delays, but I gave him a big re-stock “says M.me Morin.
On March 2, hours before the official social media announcement, the designers received an email from boutique owner Raphaëlle Bonin announcing the company’s bankruptcy. They now have little hope of being paid. The Bankruptcy and Insolvency Act ensures that secured creditors, usually lenders and bankers, are paid first. There are usually only crumbs left for the suppliers.
The owner of Station Service did not wish to answer the questions of the Homework for the moment. “Let’s get in touch once more when I have enough perspective to properly answer your questions and when the current procedures are completed,” said Ms.me Bonin by email.
Decried formula
The Station Service case has highlighted the vulnerability of designers to the widespread deposit model, believe many aggrieved designers interviewed. “We assume all the costs, the fabric, the labour, our rent. There is always the risk of having the stock returned at the end, deplores Mercedes Morin. If in addition we have to wonder if the shop will close next week, it’s even more risky. »
Several designers report that on consignment, items sometimes disappear from inventory or return to them damaged. Although they recognize that consignment can allow small designers to be discovered, designers believe that the model of buying collectibles is fairer. It allows you to better predict productions and get paid on delivery, says Marie-Christine Fortier, of Esser Studio, who also has an unpaid account with Station Service.
“Consignment is a business model that is not at all viable, which puts businesses at risk,” says Ms.me Fortier. She points out that many consumers wear her designs without knowing that she has never been paid.
“The best way to buy local and make sure the money goes into the brand’s pockets is to go directly to its website,” says M.me Fortier.
Shops are also crying out for help
Other fashion boutiques say they are in a precarious situation. Successive confinements and partial and complete closures forced the closure of the Miljours store last month. Its owner, Marie-Anne Miljours, was not eligible for federal subsidies since she had only opened a few months before the pandemic. “People forget you, they lose their habits, they leave their homes less,” she laments.
The owner of the Evelyne boutique, Evelyne Shannon Drouin, says she doesn’t know if her business might survive another bad month. However, it sells regarding half of its merchandise on consignment. “I constantly receive messages from my suppliers asking when I can pay them. But I realize that I have difficulty paying my rent. I know there are others in my situation who have not paid the designers. Everyone flips a little bit, ”she continues.
Marie-Anne Miljours and Evelyne Shannon Drouin plead for consumers to encourage local boutiques and for subsidies to come directly to the aid of the fashion industry. “Small businesses are the energy and the flavor of the city,” says Mme Millions.
