Fashion Forward Uncategorised

Chase-Ing the Future of Apparel

Chase Middle Market Banking Provides the Funds and the Expertise to Grow

It may seem a contradiction, but it’s true: One of the most iconic industries in New York and California, the apparel business, also is one of the newest. New technologies, changing demographics and the effects of e-commerce continue to remake the fashion landscape daily.

Helping new and established apparel names navigate this rapidly shifting terrain has been Chase Middle Market Banking & Specialized Industries’ team specializing in apparel.

“Change is constant, as it has been in my 25-plus years in the industry,” says Louis Mastrianni, Managing Director and Industry Head, Apparel for Chase. “The pace of change, however, has accelerated.”

Chase has been serving the industry for more than a century, and some clients have been with the bank for more than 40 years. The 11-person Apparel Group (TAG) offers a complete set of banking and financial solutions to companies in the apparel and footwear industries nationwide.

“Extending credit for working capital, growth, acquisitions, real estate and more is a big part of what we do. We strive to deliver all of the resources of a global institution while maintaining a personal touch because this is a relationship business,” Mastrianni says. “Deep industry knowledge, as we have in apparel, allows us to better understand our clients’ challenges and opportunities, and serve them better.”

“We strive to deliver all of the resources of a global institution while maintaining a personal touch because this is a relationship business,” says Mastrianni.
The firm’s apparel team works with companies as they expand, from small companies as they grow into large corporations. The Middle Market group generally serves businesses with between $20 million and $500 million in sales, but also serves much larger clients, including growing branded businesses such as East Coast-based Vineyard Vines and West Coast-based Combatent Gentlemen. Chase’s size and international reach has helped companies grow globally, Mastrianni notes, but given that each industry’s vertical and geographic territory is locally managed, it can deliver a smaller bank feel and customized solutions–the best of both worlds.

“We deliver the benefits of a big firm that can invest $9 billion in technology–best-in-class systems, advice and people–yet still make the place feel small,” he says. “Our use of data, analytics and technology helps us deliver top-form products and services, but people are still the heart of our business. Ultimately, it still comes down to people sitting across the table. Our management team enjoys meeting with clients. Everyone here is a client manager.”

Opportunities and challenges change over time. Several years ago one of the greatest concerns was the soaring price of cotton.

“Back then, we were spending a lot of time with clients on hedging ideas to lock in costs and preserve margins,” Mastrianni recalls. “We have a commodities/derivatives desk that could help companies reduce their exposure.”

Today, retailers, designers and apparel makers are facing a plethora of challenges, from an increasingly fickle customer to balancing e-commerce with real estate footprints and the need for immediacy.

“Lately, our team has been focused on consulting with clients and prospects on managing their exposure to certain retailers that have come under pressure,” he says. “This allows them to continue to do business and maintain their relationships, while hedging their credit exposure. It also allows them to continue to invest in their businesses and capitalize on opportunities. The silver lining of changing times and new challenges is there are always opportunities. We feel we’re uniquely positioned to help companies take advantage of them.”

Chase’s clients are looking for ways to capitalize on the changing themes in the industry, including customers reconfiguring their real estate portfolios, Millennials shopping very differently from Boomers and Generation X as they buy less “stuff” in favor of experiences, and seeking authenticity in terms of locally made merchandise. The key is finding the way to adapt – and Chase’s expertise and financial backing can help brands and retailers do so.

“Brick-and-mortar retail isn’t going away; it is evolving. The off-price channel has shown continued strength in apparel sales, another example of the shift in buying behavior. Malls will change as stores adjust their footprints,” he says. “There is structural change, but there are still opportunities. From a growth market perspective, the number of companies founded online continues to grow.”

Chase is also spending time working with younger e-commerce companies and concepts, which are blending the art of fashion and design with the science of data and technology. Depending on whom you ask, these are either technology companies that work with apparel, or apparel companies with heavy investments in technology.

“The fish or foul discussions are interesting. As an apparel guy I see a distribution model. That’s still selling fashion,” Mastrianni says.

“Our use of data, analytics and technology helps us deliver top-form products and services, but people are still the heart of our business,” says Mastiranni.

That’s where the size and breadth of Chase’s offerings are an advantage. The apparel team works closely with its colleagues on the bank’s technology team to bring the industry expertise to assist e-commerce clients.

“We meet with potential clients and ask them to tell us about their approach to technology. We can arrange an expert to speak with them,” he says. “This is where fashion and technology crosses. This allows us to deliver solutions holistically to companies that can have characteristics of both tech and apparel companies.”

Other companies looking to expand globally can take advantage of the bank’s international reach, expertise in currency and foreign exchange, among other specialties. The result combines the full service of a global company, with personal relationships.

The apparel group itself also has found opportunities to grow. Based primarily out of New York, the team has a national focus and has added bankers in California to accommodate the ever-growing fashion industry there. Chase’s Los Angeles and Orange County teams are more focused on the apparel sector than ever before, Mastrianni notes, with plans to add more professionals to the team.

Growth, after all is a pillar for Chase–both expanding its clients’ business and its own by hiring exceptional talent, he notes.

“J.P. Morgan said, ‘We will do first-class business, in a first-class way,’” Mastrianni says. “This is the approach we take to our business.”

 

Louis Mastrianni
Managing Director & Region Manager – Long Island/Queens & National Head of Apparel Middle Market Banking & Specialized Industries
Commercial Banking

Chase
J.P. Morgan Securities LLC
395 North Service Road, Suite 302, Melville, NY 11747‪
T: ‪631 755 5050
F: ‪631 755 0136
louis.mastrianni@chase.com
chase.com/commercialbanking