Harrods of London and Barneys of New York. Both fashionable department stores sell lots of gold leggings and zebra-stripe ski trousers to fashion-conscious kids. Children's clothing company Molo is growing quickly in foreign markets. A Working Capital Guarantee enabled them to implement a new export strategy.
Showrooms, concept stores and three new country managers are expensive. But that was the price of implementing a new export strategy to expand the successful clothing brand.
Molo did not have millions in the bank
Molo had developed an export strategy that required something in the region of DKK 15 million to realise. The bank was willing to help its customer, but wanted extra security. This was because Molo was going to spend most of the money on laying out leased premises and paying salaries, so it did not make sense for the bank to accept these assets as security. The solution turned out to be a guarantee from EKF instead.
“EKF added an extra layer of security, so the bank felt it would be all right. As a result, all the projects we dreamed of have succeeded,” says Mogens Jepsen, CEO at Molo.
With a Working Capital Guarantee, the bank transfers part of its risk to EKF. With EKF backing it, the bank has good security for its credit. For Molo, the guarantee and resulting credit from the bank enabled the design company to execute their strategy immediately and grow at a fast rate.
Speed is important
After launching their first collection on the market in 2003, the company now has a turnover of around DKK 250 million and exports to 40 countries. Molo would probably have reached all these milestones no matter what, but they have reached them faster than would otherwise have been possible. And speed is important for success in the fashion industry.