Supermodel Caprice spent most of the late 90s gracing magazine covers and filling tabloid column inches. But in 2000 she signed a licensing deal with department store Debenhams to stock a range of lingerie bearing her name. Similar deals are commonplace now, with everyone from Elle McPherson to Kelly Brook lending their names to high street store ranges. It’s a lucrative business, but for Caprice, too much of that profit was going straight to the retailer, so in 2006 she bought back her licence and decided to go it alone.
The By Caprice range secured an impressive array of high street and online stockists including Debenhams, ASOS and Littlewoods, and for nearly two years it looked like the model-turned-entrepreneur had carved out a healthy chunk of the market for herself. But the recession hit Caprice hard. After losing £1.4m on the exchange rate alone, she restructured her entire model, cut whatever costs she could and took a hit on her margins just to survive. Eighteen months on and the company’s outlook is decidedly perkier. Here, Caprice tells Startups how she pulled through, and why becoming an entrepreneur is the achievement she’s most proud of.
Was there any point during the last two years when you thought you’d lose your company?
Yes, 100%. The recession absolutely devastated me and my business. I started out as a model, looking into the camera with the right pose – that’s not exactly brain surgery. Now here I was running a mini empire smack bang in the middle of a recession. I lost £1.4m on the exchange rate alone and the retailers wanted more discounts and much longer payment terms. I’ve put hundreds of thousands of pounds of my own money into this so it was very upsetting.
What did you change in order to save the business?
Well, because the biggest problem for me was exchange rates (I buy in dollars and primarily get paid in sterling), the first thing I had to do was learn to buy currency more effectively. I also started being safer with the amount of stock I purchased and I cut business expenses in half – posting things instead of sending people out in cars to deliver – that all adds up. I also upped the ante with my product which involved cutting my margins in half. In a downturn you have to give the customer a better product. They’re not impulsive buyers anymore so you have to give them quality that’s also cost effective. Another step I took was to cut out the middleman company that previously facilitated all my orders. I just had to learn to do it all myself and, believe it or not, it’s been a pretty smooth transition.