Ike Franco tells Michelle Rivera how this business has grown during a time of consolidation in the marketplace.

Franco Apparel, founded in 1987, is part of an industry that is experiencing consolidation on both ends of the spectrum, retailer and manufacturer alike. Rather than have this as an impediment, the company has used this factor to its advantage and achieved substantial growth as well as increased market share over the last decade by developing a multitude of niches in complementary categories.

“The growth and profitability of our business is attributable to the strict adherence to our strategic business plan, which is simplistic in principal while complex in its execution. Moreover, meaning in today’s evolving children’s market, we have simplified our focus to be on brand acquisition and incremental sales within our existing customer base. Identification of which brands would propel us to new heights while enabling and attracting longterm business partnerships with key retailers is what defines whether you will win or lose to the consolidation factor,” said Ike Franco, CEO.

Ike Franco

Identifying the right brand alone does not ensure the success of the brand. Franco makes certain that each brand is managed to fulfill its maximum potential. With its widespread network of company personnel and its unique “modular” system, each division is empowered to operate independently. “The success of our brands is built upon dedicated salespeople, expert merchandising, quality production, and an innovative design staff that connects with each of the brands autonomously,” explained Franco.

Today the company licenses and/or owns a broad spectrum of brands that have stood the test of time. From Majestic Major League Baseball to Laura Ashley to Eddie Bauer to Little Bitty and New Balance, these brands have staying power.

Solid foundation
Franco Apparel’s business has increased 15% to 25% every year over the last decade. According to the chief executive, having the infrastructure and foundation in place from a corporate as
well as sourcing perspective prior to expanding the business is the only way to ensure one can maintain the growth.

“Before we acquire a new brand or private label program, we make certain we have the experts and/or expertise to handle every aspect of the business required to facilitate and develop the business as our own,” Franco said. In order for a company to be able to claim a business category to be their niche, they must be able to provide a quality product at the right price to the appropriate channel of distribution on time consistently.

For instance, prior to receiving the license for Eddie Bauer, Franco Apparel wasn’t in the denim business. “Not to say we hadn’t manufactured denim garments previously, but we could not make the claim it was our niche.” As such, Franco made sure the company had the right infrastructure in place to develop and manufacture the product. “We sought out and employed a seasoned design and merchandising team.” With so much of his business strategically sourced from around the world, Franco’s renowned sourcing infrastructure afforded them the ease and ability to utilize their existing factory matrix to delve heavily and quickly into this new category.

Franco Apparel’s strength not only lies within the fulfillment of an order, but also in the ability to secure orders away from our competition. The company’s sales infrastructure is comprised of a regional sales force strategically placed throughout the country while key executives manage all of the company’s major accounts. A sound infrastructure enables the company all the way from the manufacturing stage to the product’s distribution.

For this reason, the company maintains its own distribution center. “While much of our competition has moved towards public warehousing, we prefer to be in control of our own and our customer’s destiny. Having our own warehouse has helped us maintain our growth and be an asset to the retailers, whether it be housing and fulfilling their replenishment requirements and or providing short lead times for in stock purchases,” Franco said.

Selective business
Franco Apparel has consistently delivered its customers a quality product at every price level, which has given the company a premier image in the marketplace that is the cornerstone of their business and motto, explained Franco. These business attributes enable the company to gain the retailer’s confidence while consistently maintaining its status as a key vendor on the retailer’s limited vendor matrix.

Like the retailer, Franco is selective in terms of where it does business and with whom it does business. Although there are companies solely looking to add volume, Franco Apparel looks to add on profitable sales. “We do not go after ancillary product,” Franco said.

“We’re confident the time and energy invested in methodically, building our brands, will pay dividends over the next few years and our business will explode. There are substantial business opportunities in the market to gain, and we’re just beginning to scratch the surface,” Franco concluded.