Industry Insight caught up with Kevin Sullivan, Executive Vice President and Western Region Manager in Wells Fargo Capital Finance’s Commercial Services Group, to ask about trends he’s seeing in financing for apparel and action sports companies.
First, please tell us about Wells Fargo’s Commercial Services Group. What services does it provide to apparel and action sports companies?
Kevin Sullivan: We provide working capital financing, credit and collection services, and trade finance to companies throughout the apparel and action sports market places. We can also help with clients’ additional financial needs through the company’s other 80 financial services.
How can your group help action sports retailers and brands with access to capital?
Kevin Sullivan: We help growing companies smooth out cash flow needs within their respective trade cycles by advancing against accounts receivable and inventory. We’ve worked with some of the top names in the industry, helping entrepreneurs build great brands while also assisting in liquidity events should the founders of a company ultimately decide to sell the business.
What trends are you seeing in financing for middle-market companies and action sports companies in particular?
Kevin Sullivan: The major shifts in the retail landscape are having a significant impact on most of our clients. We don’t view this as a “soft period,” so much as a complete restructuring of how consumers purchase goods. In some cases we’ve seen growing brands decide to either partner or sell outright to larger competitors to take advantage of more robust production capabilities and the inherent pricing advantages that larger industry players can sometimes provide. The goal is to both remain viable and accelerate the growth curve to remain important to retail and e-com partners. It’s also very evident that the consumer has become very savvy in choosing companies that they perceive as more authentic. While quality product remains as important as ever, the ability to engage the customer and create a great dialogue around who a company really is has become equally important. We also see private equity playing a continued active role in the industry.
How can companies learn more about what services might work best for their business?
Kevin Sullivan: We find that a great accounting firm with significant industry experience can be a significant asset for a company seeking to navigate the challenges inherent in today’s market. Once a company understands what capital it needs to grow successfully, an experienced lender with a broad depth of industry experience and a wide range of financial products can be a vital teammate. Wells Fargo Commercial Services Group has actively financed action sports and apparel companies for decades. For additional information, our website can be accessed at https://wellsfargocapitalfinance.com/solutions/factoring/. We’re always happy to sit down with a management team and assist in putting together a financing program tailored to what a company truly needs to take things to the next level!
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The opinions expressed in this document are general in nature and not intended to provide specific advice or recommendations for any individual or association. Contact your banker, attorney, accountant or tax advisor with regard to your individual situation. The opinions of the author do not necessarily reflect those of Wells Fargo Capital Finance or any Wells Fargo entity.
