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Private Label – What is it? and Why you Need to Know!

Many successful apparel manufacturers also opt to develop lines for other retailers that will carry another’s label other than their own branded label. This can mean additional sales but often entails that the retailers require cheaper wholesale prices. Manufacturers’ should fully understand the impact of this type order on their own costs of doing business before accepting to develop Private Labels for retailers.

When a branded manufacturer produces “Private Label” specifically for a retailer it will usually have a similar look and feel to their own branded label. The manufacturer is expected to price the private label products at a lower price point usually with a lower markup. It is another way for the manufacturer to get more orders and keep the cash flow active. Due to the volume of orders placed, production of styles often go offshore to get produced at a considerably lower price than if it were to be done domestically. Since the manufacturer has already spent the money to develop the line, generally, it is only a matter of minor changes to a style, trims and fabrication

Major Stores are moving more and more into the sphere of developing their own “LABEL” and promoting it to compete with the higher prices of “Name Brands.” In many cases, it is a very similar product in style, fabric and quality to the Branded Label and may indeed be competing with their own branded label they are producing as private label for the retailer. With an economy that is watching their discretionary income purchases, Private Label products are being promoted to a much higher degree.

Style and Co Advertisement Private label

Manufacturers that spend money to create and show a line at a trade show have made a large investment in the design, sampling, duplicate and pre production processes. These same companies that had been seeing substantial profits by doing Specialty Store and Boutique business have found themselves struggling due to the following reasons. 1. Most small stores are no longer getting Factor Approvals. 2. These stores are placing smaller orders but when it comes to shipping the order, manufacturers are finding the small stores are refusing the goods due to either shrinking sales, no funds available on their Credit Cards, or are requesting Net 30 to Net 60 as a House account. In some cases CONSIGMENT sales!!! A big NO NO!!

In most cases, a Major will “test“one or two pieces with a manufacturer in relatively small quantities for the first purchase. If the items are delivered on time, with acceptable quality and sell well in the store, it is likely the Major will place larger orders in the future. Additionally, the manufacturer will be able to “design” along with the Private Label dept. of the store and become “partners” with them in the development of new styles.

 

Though it may be an “EGO” issue with many designers and manufacturers, not seeing their name on the product, it is certainly a way to increase sales. Ultimately it often leads to a profitable partnership between the retailer and the manufacturer.

WIN WIN Approach: Target has taken private label to whole new level. Now some branded labels are being developed and produced specifically for Target. This enable both the branded label and Target to both enjoy cross branding. Target gets the cache of the brand and the brand gets to realize huge orders from Target. This is a win win model for all concerned.

 

In some instances a large retailer like Macy’s will develop their own brand “INC”, which cuts a pre- branded manufacturer out all together. They have become so successful as a private label they have creating their own branded label! I am seeing more and more specialty store buy branded product, then attach their own retail label over the branded label. This seems to me to be unethical, but I guess if they have purchased the goods then they own them. From the stand point of federal law, each manufacturer must have an RN number in the garment, which identifies the manufacturer in case there is a problem with the product, e.g. dyes used that may causes

inc at Macys

the branded label. The orders are often so large the manufacturer will produce for a small mark up, and or developed the product with cheaper materials which will then mean that the retailer can sell for what is perceived by the customer as a markdown price. This is also often the case with branded labels producing cheaper product for their own outlet stores. In the case of Costco they may only mark up a small percentage but as the qualities are enormous and Costco makes a profit from their membership sales it is again a win.

Manufactures just have to watch out for those nasty Chargebacks that larger retails have a habit of doing! But that will have to be another blog… Frances Harder

Business Plan Basics – Questions You Need to Answer before you Start your Business

 

Company Description?

What business will you be in?

What will you do?

Describe your industry?

To whom will you market and sell your products?

Where you want your business to be in six months, one year and two years?

Describe your most important company strengths and core competencies. What
factors will make the company succeed?

What do you think your major competitive strengths will be?

What background experience, skills, and strengths do you personally bring to the
business?

Describe in depth your products or services.

What are the pricing, fee, or leasing structures of your products or services?

List all of your major products or services.

Identify your targeted customers, their characteristics, and their geographic
locations, otherwise known as their demographics.

What products and companies will compete with you?

List your major competitors.

How will your products or services compare with the competition?

How will you get the word out to customers?

Advertising: What media, why, and how often? Why this mix and not some other?

Have you identified low-cost methods to get the most out of your promotional

In addition to advertising, what plans do you have for graphic image support?
This includes things like logo design, cards and letterhead, brochures, signage,
and interior design (if customers come to your place of business).

Promotional Budget

How much will you spend on the items listed above?

Explain your method or methods of setting prices.

Compare your prices with those of the competition. Are they higher, lower, the
same? Why?

Legal Environment

Describe the following:

Licensing and bonding requirements

Permits

Health, workplace, or environmental regulations

Special regulations covering your industry or profession

Zoning or building code requirements

Insurance coverage

Personnel

Number of employees

Type of labor (skilled, unskilled, and professional)

Where and how will you find the right employees?

Quality of existing staff

Pay structure

Training methods and requirements

Who does which tasks?

I. Management and Organization

Who will manage the business on a day-to-day basis? What experience does
that person bring to the business?

Brochures and advertising materials

Industry studies

Blueprints and plans

Maps and photos of location

Magazine or other articles

Detailed lists of equipment owned or to be purchased

Copies of leases and contracts

For Raising Capital

What initial capital do you have?

Amount of loan

How the funds will be used

What this will accomplish—how will it make the business stronger?

Requested repayment terms (number of years to repay). You will probably
not have much negotiating room on interest rate but may be able to
negotiate a longer repayment term, which will help cash flow.

Collateral offered, and a list of all existing liens against collateral

Service Businesses

Service businesses sell intangible products. They are usually more flexible
than other types of businesses, but they also have higher labor costs and
generally very little in fixed assets.

What are the key competitive factors in this industry?

Your prices

Methods used to set prices

Sales projections and funding required

System of production management

Once you answer all of these questions, you just might be ready to get started in your new venture. Tell me what you think? Are there any questions on my list that you wished you had asked yourself in the beginning? Did I miss any questions?

- Frances Harder

 

Merchandising – From Design Concept to Sale

Merchandising – From Design Concept to the final sale of a garment, merchandising is an important aspect, which is often not fully understood.

Role of a Merchandiser

Merchandising encompasses every department of an apparel business.

  • Line development
  • Time and action plans
  • Planning volume
  • Budgets
  • Merchandising calendar detailing key dates for planning, selling, and producing multiple lines.
  • Each stage will have an impact on the successful retail sales of the garments.

Merchandise Planning

  • Target market should be analyzed.
  • If the market is over-merchandised or saturated with a product, then it would not be wise to manufacture something that is already out there.
  • Market analysis involves studying the current market trends and anticipated needs for the forthcoming seasons.
  • New fashions usually evolve gradually, the processes by which fashions rise, peak, and decline take several seasons. It will be important that a merchandiser understands this.

In today’s market there is no universal group of customers. They could be:

  • City
  • Suburban
  • Rural
  • Young or not so young
  • Blue-collar or white-collar background
  • Middle-income or well to do
  • Conservative or the avant-garde, and so on
  • Weather is also a very important aspect

Merchandiser will need to know the niche market – and fill it

Fabrication:

The first things a customer will notice is:

  • The color of the garment
  • Then the will be the type of fabric
    • Plain colored
    • Prints
    • Or the graphics.

Choosing a fabric suitable for a particular style is probably the most important aspect of design/merchandising a line.

It will then be important to merchandise the fabric choice to fall within groups to relate other fabrics, trims, or colors.

Story Board:

  • Seasons
  • Color
  • Fabrics – Plain or Print
  • Styles  
  • Target market
  • Groups within the collection

 

Example of: Design/Merchandising

“Storyboard” are often made up of magazine tear sheets and other sources of inspiration.

Includes styling suggestions, colors, textiles, trims, stitching detailing and even accessories suggestions which will influence or direct the new collection.

Designer/Merchandiser may have been to an art show or museum, or inspired by the history of fashion or ethnic costumes

  • Vintage cars may be an influence for a print on a shirt, or, some part of a vintage dress could be taken as inspiration; there could be a floral or even a space theme.
  • Sub-divide these sheets into groups that better relate to one another; e.g. fabric types, colors that could be grouped together with in the line.
  • Storyboards forces you to focus your designing, and merchandising.

Groups Within The Collection/Line

  • A line is usually subdivided into groups.
  • As mentioned each group has a specific theme based on the fabric, color, or a particular fashion direction.  Sometimes the design for one garment may inspire a whole group.
  • The styling within each group should have variety yet carry out the “central theme”.
  • To present a visually pleasing group of “dresses,” the line needs only to include a few elements in common, such as fabric or a color story.
  • Often a manufacturer emphasizes only a few silhouettes (called “bodies or styles” in the trade), interpreting each of them in several prints; or it will feature one print in a variety of styles.
  • Within the group, the dresses should offer a variety of silhouettes, sleeve treatments, necklines, trims, or they could have certain continuity in stitching details and finishing of the garment.
  • Example To design “coordinated sportswear”, the objective is to have the individual styles mix and match interchangeably.  Fabric combinations must be carefully thought out.  There should be a variety of coordinating skirts, pants, jackets, shirts or blouses, and tops in each group.  There should still be consistency of theme, with color, fabric, line, or detailing to tie the whole group together.

Merchandising for Display Purposes

Whether you are displaying at a booth at a trade show or a retailer displaying goods in a store it will be important to spend the time to fine tune the art of merchandising a product. All displayed merchandise must relate and be simple enough to be understood. It is important not to over merchandise, (or over crowd) either a store or a trade show booth.

You need the buyer to:

  • Connect
  • Relate
  • Buy!
  • If your booth has all the pieces from your line make sure it does not end up with a swap meet effect.  Merchandising your end product (DISPLAY) will be as important as merchandising and designing the line.
    • Your buyers will not connect or understand your merchandising if the display is crowded
    • You have one chance to get their attention. Approx – 3 seconds – Booth must be inviting and create an impact quickly!
    • Know what to use to connect with your buyer will be critical to sales
    • A booth should be merchandised and displayed as if it were a store window
    • You want the buyers, and the customer to buy all your merchandise!
    • Your graphics should communicate who you are, what you do, and how the customer can benefit by buying your line
    • Make it easy for people to get in and out of the booth.  Make sure that whoever is working in the booth is friendly and out going 
    • Do not chew gum, drink or eat while selling
    • Give away small items with your company’s name, to remind the customer of your product.

Merchandising your booth and marketing is an important part of the sale of your product, and ultimately the success of your business!

Retail Visual Display/Merchandising

–      The arrangement and presentation of merchandise both on the floor and in the windows critical to keeping the store looking fresh will be an important factor in attracting return customers.

–      Why would shoppers return to buy if the stock is old and the window display is the same?

–      When everything begins to look alike, customers become disenchanted.

–      The longer a customer spends in a store, the more likely there will be a sale.

–      Coordinating and accessorized outfits should be displayed to help customers assemble their own wardrobes.

Website Merchandising

  • As with a retail window a website needs to be merchandised often
  • Must to be easy to navigate
  • Have a message as to what it is the site is selling
  • Visual connection
  • Keep it fresh and new
  • Change out merchandise as often as possible
  • Continuity will be part of brand recognition

  Conclusion:

  • Merchandising encompasses everything around us. Sometimes successful and others times not so successful!

Merchandise Yourself

  • We merchandise and brand ourselves each day with what we choose to wear and DO!!

 

 

 

 

IT’S SHOW TIME AGAIN! – MAGIC IN VEGAS!

So many shows and so little time!

I just returned from presenting four seminars at a new two day trade show in NY, the “DG Expo”. A new fabric and trims show that was created by my good friend Susan Power, which she specifically created to highlight fabrics and trims for low minimum orders. Susan created the show out of a demand geared for new creative design driven company who have a hard time finding what they want without having to order 5,000 yards! Susan put herself out on a limb and in the red to fill this fast growing niche! I think she has done a fantastic job, which I think will also be a good business decision. Echoes of Fashion For Profit!

Packing my bags now to fly early tomorrow morning to Vegas for the biggest apparel trade show in the world,  MAGIC International.  I will have a very busy few days presenting two seminars with a variety of industry experts, then also assist in lunching 20 new lines in FBI Launch Pad section of MAGIC WWD.

This a whole new concept that allows new companies to show for a first time only price through FBI membership of $800.00. They get a rolling rack and table! Great deal!  We will also be responsible to hold down an info POD in the sourcing section of MAGIC, which is a great resource of information and International sources.

The FBI active board members and members will be meeting and greeting, giving advice and mixing like a cocktail and networking like crazy to help the FBI mission. Then on Wednesday evening I will be flying back to LA totally exhausted but from my past experience I will be very glad to have made the extra effort which I now know it takes to achieve anything!

I then have in front of me the LA Fashion Week, LA Textile week,  which is a big deal and lots of work for us to come up with and then to present twice a year three days of one hour seminars. This is then followed by San Francisco fashion week, which is then followed by Phoenix Fashion Week…… This work load will then followed by three weeks’ vacation in South Africa where my husband and I will be visiting old friends and I think and hope we will make some new acquaintances!!

All in all a very busy scheduled for which I am so very grateful that there is a demand for my services and for any of my advice.

Frances

Your Checklist For Supply Chain Management

Supply Chain Management Checklist

Understanding your Business- What are the most important factors for you supply chain strategy?

  • Price Point
  • Speed and Market- How Long
  • Location for Logistical or practical purposes
  • Extra values offered by the factor or company
  • Quality
  • Other Factors
    • Stability
    • Design
    • Technical Advisors

Make sure you are comparing apples to apples!

  • Same Fabric &Trims to your samples
  • SameTrim, constitution and sewing (Tech packs)
  • Same specs (Tech packs)
  • Same terms
  • Same social compliances
  • Samples or swatches
  • Tech pack
  • Standards – Sizing
  • PO Terms and Conditions

Tech pack- information needed for consistent pricing and delivery

  • Fabric weight, construction, and content
  • Trim detail with spec including buttons, zippers, embroidery stitches, labels, hang tags
  • Sewing Details
  • Packing Details
  • Size specs graded and size range defined
  • Chemicals applications and washes and finishes to apply including the standards

Company standards:

Some common standards that may differ for knits and woven will include you minimum ratings and test methods to use:

  • Shrinkage
  • Crocking- Wet and Dry
  • Colorfastness to laundering
  • Colorfastness to light
  • Torqueing
  • General Appearance test
  • Pilling
  • Seam strength

*The more requirements and tests needed, the higher the garment coat and coat to the buyer

Other Company Requirements That May Affect Price

  • Social Compliance Requirements
  • Terms
  • FOB Point- Factory, Freight  Forward or other
  • Document Filling Costs such as 10+2
  • Inspection requirements- Important timing
  • Payment Agreement for testing
  • Payment Agreement on samples
  • Payment Agreement on Sample Freight

General Overview: what to look for in a Factory

  • Social Certification of compliance
  • Factory overall capacity and available capacity for customers
  • Minimum orders by fabric, color, and style
  • Location- country and distance to port
  • How long has the company been in business?
  • Past and present customers with similar products
  • In house facilities and where is the outsourcing done
  • Average turn time for specific styles after all approvals
  • Inventory of their equipment and maintenance schedules
  • In house  auditors, auditing procedures and records of audits
  • Technical staff available for assistance

Communication

  • Do they write and speak English?
  • Response time?
  • Do they have a complete understanding of your questions and comments?
  • What W.I.P reports will the provide
  • Sample Quality- any issues due to poor communication skills 

Checklist For Exhibiting at a Tradeshow

Here are things you need to be prepared with for any tradeshow you might be exhibiting at.

Samples – Make sure to have merchandise all your samples as you would for a retail store display. Too many could crowd your space to few could give a too spare story of your company.

Booth   - Booth walls are often part of the show cost to you.

Racks or shelves to merchandise the line. These maybe included in booth cost.

Booth signs – Keep it clean and clear

Transportation – For set up for booth

Furniture – Bring your own because renting from the show unions are too expensive.

Light Music sources

Mirror – Good idea so Clients can see merchandise. Mirrors will also add depth to your space

Sales Order forms (Duplicate carbons)

Credit card machine -  (first check their credit and charge their card the day you ship.)

Line Sheets (style numbers, picture of products, delivery dates and
whole sale prices)

Business cards

Brochures or postcards

Accounting Profile (Business type, Market segment, target market,
retail Locations)

Credit Applications (Customers applying for credit)

Discount programs sheets (showing % of discount and new discounted price. Important to understand how much you can and cannot discount)

Sales Goal for Show (Internal)

Budget for show (Internal)

Market Kits for sales reps

Give away to make buyers remember your line.  REMEMBER YOU MUST BE SEEN AT LEAST 6 TIMES BEFORE YOUR LINE WILL BE REMEMBERED

Include:

Script – You have 3 seconds to engage WITH YOUR BUYER
Know your competitive advantages

Articles on company, celebrity or magazine editorials
FAQ’s (How to answer them)
Product Information – What type of fabric is used and how to care for it

Laptop

Container to hold and collect business cards – Important to follow up after the show

Pens and Pencils

Tape – Wide and narrow

Folders to file orders

Folders to give to customers with copy of their order forms

Bowl of Breathe Mints

Stapler

Paper Clips

Note pads

Models (To show product) They could be part of your sales team. Make sure they understand the script and your product.

Hotel

Transportation

Meal Reservations for Important customers

Project Runway to Nowhere – Reality Torture Show

Project Runway the show on Bravo as we know has become a very popular reality show. BUT, I just don’t get it!

On the whole it seems to me that reality shows, and Project Runway is a typical example are really shows that publicly demean, belittle, humiliating and generally are mean spirited that people love to watch! Why do people like to enjoy watching people get tortured? It is almost medieval mentality where people would gather in the village square to watch someone being flogged or branded or worse still to watch heads roll off the block!  Or the Gladiators wrestle lions in the coliseum!  Don’t we try and teach our children to be kind to one another?

But, I get off the real reason to my writing this blog. How many of the tortured designers that have been on the show are now famous and running a successful business of their own???? NOT ONE? So, why do they still line up and want to be part of these shows? I can only assume that they all hope they will be the ONE to make it! I actually have either had as a student while teaching at FIDM or Otis or met through my nonprofit Fashion Business Incorporated five contestants. One of which told me some details that back up my statement. Of course they are sworn to secrecy and could get sued if they were to tell the torture they were subjected to while being part of the show.

It seems obvious to me that the big missing part and the real reason they don’t make it in the REAL world is that none of them seem to really understand the business side of running a successful apparel business! Take a look at the many successful apparel companies who have been around for more than a few years and you will see that they are run by people who understand how to run a successful fashion business. You need to understand a cost sheet, and financial planning. Without knowing where the money is coming from you will lose your life saves very fast. The streets of most major fashion centers around the world are overflowing with “Wanabe” designers.  There are fashion courses taught at most colleges around the western world, but not enough jobs for them when they graduate. School loans to pay back and no way to pay them back.

We need to emphasis and teach more business skills. It amazes me how many creative designers I meet who have a great idea and a natural talent to design but JUST do not get the concept that without money it is near impossible to start an apparel business, let alone sustain it as it grows.  Where do the funds come from when there is more money going out to produce the good before you are paid for the goods sold? Then as you grow your company where will the funding come from for the healthy growth of that company?

As I continually talk about and which my books all explain you must have a business and a financial plan. Fully understand cost sheet, production costs, retail math and real overhead costs.  Maybe then you can apply for Project Runway! But I suspect by then you will not want to or need to!!

EDI (Electronic Data Interchange) and Large Retailers

A guest post by Jim Wiebe, an expert on technology and retail
What is EDI?  Why do large retailers have all these ‘compliance’ requirements? How is doing business with large retailers different than small stores and boutiques? Good questions.  Important too!  For answers, you need to understand how large retail operations work.
First of all, retailers have to make money.  To do that they focus on 3 things:  margin (higher the better), fast turnover (hot selling items), and above all, cost control.  The business problem large retailers face is that their costs are so high that on a good year they make 1 – 2% (which is really pretty astounding).  So they absolutely MUST reduce costs wherever possible.  When a retailer gets to the point where they have 10-15 store locations or more, they have to begin to automate to be come more efficient because doing things manually becomes more and more costly. That means computers and automatic systems and a carefully designed flow of documents and physical product into their stores.
EDI is simply described as the standard that retailers designed to send business documents electronically.  These are basically the same types of documents as in a paper system, POs, invoices, etc.  It is much cheaper and vastly more accurate to have computers talk to each other in a standardized way than keypunching by hand.
However, there is one document that is special to EDI which is the most important of all, and that is the Advanced Ship Notice or ASN. The ASN is a combination shipping document and box level packing list for each PO.  Why is this important?  Well, one of the largest areas of expense is in getting the goods from your (manufacturer) door to the store shelf, e.g. shipping, receiving warehouse/sorting, transportation to stores, etc. The ASN enables the warehouse/distribution process to be automated; without an ASN it all has to be manual.  Getting goods into the stores accurately, quickly and saving as much in freight and handling costs as possible is extremely critical.  So retailers who are just implementing the automated systems often say “Don’t worry about electronic POs and invoices just yet, but we MUST HAVE the ASN!”
So what it boils down to is that each retailer sets up automated computer systems and processes to handle 1) business paperwork and 2) incoming physical product.  In order for these processes to work smoothly, they require you as the supplier to fit into those processes as seamlessly and efficiently as though you were their wholly owned subsidiary. Retailers give you all the specifications in their documentation, and while there are a lot of similarities, all the details are specific to each retailer (and depend on how each has configured their own internal systems).  If you deviate from their requirements, they have to revert to handling your stuff as manual exceptions which is tremendously expensive for them. So they issue “expense offsets” aka chargebacks to recoup part of that cost.  In many cases these can be $250 to $500 PER VIOLATION and easily exceed the amount of your invoice (!).
That means that you have to plan how you are going to handle their compliance requirements, including EDI.  It means knowing what pieces you will need to outsource, how it will fit into your operation, and how to shop for vendors.  If you decided you needed a sewing contractor (or any other service) for your business, you would not blindly rush out and buy from the first one that came along.  Unfortunately, however, many manufacturers new to EDI are so intimidated by it that they desperately sign up with the first vendor that comes along just so they can get rid of the anxiety. Remember that EDI was invented a long time ago and was basically set up to be used by large businesses. Many of the services are still priced accordingly; not only are they over priced, but they lock you in to a multi year automatically renewing contract that is very difficult to get rid of.  Of course they are trying to keep you from discovering that there are better service providers out there at a fraction of the cost that do NOT require long term contracts.  Also, if you will be getting 2-4 EDI orders per month (or less) your needs are going to be vastly different from a company doing 50 orders per week.
So, is this EDI stuff difficult?  Not at all!  However, there are lots and lots and LOTS of details, and a whole other ‘lingo’ that you need to be familiar with before it all makes sense. My EDI BootCamp class gets you up to speed on all this stuff and then provides you with sample documents, examples of retailer specifications, implementation planning checklists, and even a free spreadsheet that you can use to track chargebacks (so they don’t fall through the cracks and you can fix them before they repeat over and over).  Note too that the retailers are vastly bigger than you are (and have a lot more lawyers). So we also talk about how to maintain a level playing field so they don’t take advantage of you.
Bottom line:  Is it possible for a very small company to successfully do business with large retailers?  ABSOLUTELY!  But you DO have to do your homework first; the retailers do not have time to bring you up to speed and learning-by-chargeback is too horrendously expensive.  So for less than the price of single typical chargeback, EDI BootCamp will get you up to speed so you can make plans to make the jump to the next level of learning and success.  Walmart, who is known as one of the most rigorous in terms of compliance, often tells their new vendors: “Sure we are demanding.  But if you achieve compliance with us, you can be confident that you have a world class system and are ready to do business with anyone.”  If you approach the process with that attitude, SO CAN YOU!
[ For more info, see www.EDIBootCamp.com or email edibootcamp@gmail.com. ]
Jim Wiebe has been working with computers and programming for more than 20 years.
Most recently he spend 10 years single handedly creating and maintaining the shipping department EDI activities for a large [15,000 packages per day] private label manufacturing firm doing business with JCPenney and Walmart.  Frustrated by the overly technical emphasis of currently available EDI course offerings, FBI asked Jim to create an EDI class specifically for managers and business owners who sell to retailers; the result is EDI BootCamp.  For more info, seewww.EDIBootCamp.com.

New California Laws Affecting Businesses

California New Business Laws – Overview from the Apparel News

For those of you with California based businesses it will be important for you to take note of the new California laws that will affect your business in 2012. Below is an overview taken from this week’s Apparel News of the new laws that you should be aware of. It will be important to follow up on any that will impact your own business. These new laws and regulations go into effect on Jan. 1.

In 2011, state legislators were extra busy, passing a slew of new rules that affect California employers. There’s everything from fines for misclassifying independent contractors to having to provide the same employee insurance benefits to same-sex couples if your company operates in a number of states.

A new law passed in 2010 under Gov. Arnold Schwarzenegger’s watch makes it mandatory that California manufacturers and retailers let their customers know what they are doing about human trafficking. And San Francisco is making national headlines by having the highest minimum wage in the country. Here’s a summary of the state employment laws that will influence California’s apparel and textile industries in 2012.

Credit Checks

Assembly Bill 22 prohibits employers and prospective employers, not including certain financial institutions, from obtaining and using consumer credit reports (credit information) about applicants or employees.

Pregnancy Disability Leave

Senate Bill 299 requires all employers with five or more employees to continue to maintain and pay for health coverage under a group health plan for an eligible female employee who takes pregnancy disability leave (PDL) up to a maximum of four months in a 12-month period. The benefits are at the same level and under the same conditions as if the employee had continued working during the leave period.

Independent Contractors

Senate Bill 459 provides new penalties of between $5,000 to $25,000 for the willful misclassification of independent contractors, defined as avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor.

Written Commissions Agreement

Assembly Bill 1396 requires employers who have commission-pay arrangements to put those agreements into a signed written contract that sets forth the method by which the commissions will be computed and paid.

Notice of Pay Details

Assembly Bill 469 requires employers to provide nonexempt employees, at the time of hire, a new notice that specifies, among other things, specific information regarding payment of wages. This legislation also increases penalties for wage violations.

Genetic Information

Senate Bill 559 amends the Fair Employment and Housing Act (FEHA) to state that employers are prohibited from discriminating against employees on the basis of genetic information.

Gender Expression

Assembly Bill 887 amends the Fair Employment and Housing Act to further define, gender to include both gender identity and, gender expression, as defined by the new law, and to make clear that discrimination on either basis is prohibited.

E-Verify

Assembly Bill 1236 allows employers to continue to choose to use E-Verify but prohibits California state agencies and local governments from passing mandates that require employers to use E-Verify.

Leave Laws

Assembly Bill 592 adds language to the California Family Rights Act (CFRA) and the Pregnancy Disability Leave law (PDL) that makes it unlawful to interfere with or, in any way, restrain the exercise of rights under these laws.

Administrative Penalties

Assembly Bill 240 allows an employee that alleges a minimum-wage violation to recover liquidated damages pursuant to any complaint brought before the Division of Labor Standards Enforcement.

Wage Penalties

Assembly Bill 551 increases the maximum penalty from $50 to $200 per calendar day for each worker paid less than the determined prevailing wage and increases the minimum penalty from $10 to $40 per day for violations of prevailing wage obligations.

Non-Discrimination Insurance Act

Senate Bill 757 prevents employers that operate in multiple states from discriminating against same-sex couples by not providing the same insurance coverage for domestic partners as they do for spouses.

State Contracts

Senate Bill 117 outlaws the state of California from entering into contracts of more than $100,000 with companies that discriminate against employees on the basis of gender or sexual orientation with regard to benefits.

Workers’ Compensation

Assembly Bill 335 requires the workers’ compensation administrative director (AD) to work with the Commission on Health and Safety and Workers’ Compensation (CHSWC) to develop regulations regarding notices to injured workers; requires AD and CHSWC to develop and make accessible a booklet written in plain language about the workers’ comp claims process; and streamlines and simplifies other notices to employees. The new law also states that workers’ compensation notices posted by employers must now include the website address and contact information that employees may use to obtain further information about the workers’ compensation claims process and an injured employees rights and obligations, including the location and telephone number of the nearest information and assistance officer.

Human Trafficking

Under Schwarzenegger, Senate Bill 657 was passed, making it mandatory for California manufacturers and retailers to let their consumers and suppliers know what they are doing to fight human trafficking. Under the California Transparency in Supply Chain Act, retailers and manufacturers are required to post this information about their policies on their website’s home page starting Jan. 1.

Minimum Wage

The California minimum wage remains at $8 an hour, but San Francisco is boosting its minimum wage from $9.92 to $10.24 an hour. San Francisco’s minimum wage started going up after voters in 2003 approved an annual increase based on a formula tied to inflation.

San Francisco Based Companies

Beginning January 1, 2012, all employers must pay to each employee who performs work in San Francisco (including temporary and part-time employees) wages not less than $10.24 per hour.

The minimum wage requirement, set forth in the San Francisco Minimum Wage Ordinance, Chapter 12R of the San Francisco Administrative Code, applies to adult and minor employees who work two (2) or more hours per week. Each year, the City will adjust the amount of the minimum wage based on increases in regional consumer price index.

Under the Ordinance, employees who assert their rights to receive the City’s minimum wage are protected from retaliation. Employees may file a civil lawsuit against their employers for any violation of the Ordinance. The City can investigate possible violations, shall have access to payroll records, and can enforce the minimum wage requirements by ordering reinstatement of employees, payment of back wages unlawfully withheld, and penalties.

If you should have any questions or require additional information, please contact the Office of Labor Standards (OLSE) at (415) 554-6292 or Email MWO@sfgov.org

Expert Advice? OR… Expensive Lessons?

Taking Advice to Learn By – But are WE Ready? – Advice for Profit!

Over the past 13 plus years, since writing my book Fashion For Profit and founding the Fashion Business Incorporated I must have met with, and advised an average of around 300 new members per year for the FBI and even more through my public speaking engagements and publications.  As part of the FBI annual membership ($250.00) you receive a one hour free consultation with your choice of a variety of industry experts (listed on the website). However, as I am the “face” of the FBI, that “expert” for this initial consultation has usually been me.

I have to say that I have had a very interesting few years meeting an amazing cross section of people from all kinds of occupations. It has been a pleasure getting to know them and advising some fantastic creative people and hearing all about their new business ideas. There have been a few that were not such great ideas!:)  But the interesting thing I have learnt being Dr. Fashion For Profit physiatrist during this time is, unless people are really ready to take my advice then it can often be a waste of everyone time to try to help them.

Starting a new business venture demands a great deal of time, focus and forethought.  Often the new entrepreneur has decided there is a real need for their creation as it is not already being offered in the market place. So, a new product is developed and born. But is there in fact a real need for their brain child? Do these new entrepreneurs understand the apparel industry and the complexity of the industry? ,

This week I received a holiday greeting email from one of my FBI members who I consulted with for more than the initial one hour free consultation. She is a brilliant highly educated physicist who also has a wonderful creative side with a dream of owning a fashion label, which she is now energetically perusing. As you will read below she now realizes that she should have listened to my initial advice and kept her line small and focused before the expense and the energy she needed in developing a full blown line. She has the talent but not the industry connections or the funding to take on board such a large commitment.

“Hi Frances,…  still optimistic. I understand that I’m not out of the woods with the fashion business, so to speak, but I hope that this time with the narrow focus I’ll make it. I often remember your initial suggestion to start selling my skirts first before doing anything else – that was the best advice – but I fully appreciate it only now, when it’s too late for me to do only that.”….

Confession! I have also found it hard to stay focused and take my own advice. Maybe my New Year’s resolution will be to take my own advice and keep a narrower focus on what I do and try not say “yes” to too many opportunities that I have been fortunate to be offered and often found hard to turn down!