Every week, we will seek out expert advice to help a small or medium-sized company overcome a key issue it is facing in its business.
When Pam Shainhouse's daughter, Alli Shapiro, was treated for cancer, she gained 80 pounds, and was unable to fit into any of her clothes.
After failing to find fashionable plus-sized outfits, Ms. Shainhouse's daughter decided to start her own clothing line for full-figured women. Unfortunately, she passed away in 2006 before she had a chance, leaving her mother to create the business.
It took Ms. Shainhouse about five years to muster up the energy to start Allistyle Inc., the Toronto-based company named after her daughter.
After just 12 months, Ms. Shainhouse is still struggling to build the business, but finding warmer reception in the United States than in Canada.
It helps that Ms. Shainhouse's partner, and the company's executive vice-president and spokesperson, is Whitney Thompson, the only plus-sized winner of America's Next Top Model . The two connected when they were seated next to each other at a Manhattan fashion show.
As well, the plus-sized line may resonate with more people down south, where 34.4 per cent of Americans are obese, compared to 24.1 per cent in Canada.
With Ms. Thompson's backing, Ms. Shainhouse has landed meetings with major U.S. boutiques and departments stores, including Bloomingdale's and Nordstrom. While none have yet taken on her line, all have told her to come back and show off the collection again in the summer, she says.
Not so in Canada. Though one Toronto boutique has been carrying the line (between it and some online sales, Ms. Shainhouse says she expects to generate $100,000 in revenues this year), she's been turned down by the Bay and about a dozen other retailers in Canada she's approached, she says.
The Challenge: Where should Allistyle focus on building its business – in Canada or the United States?
THE EXPERTS WEIGH IN
Ed Strapagiel, executive vice-president of Toronto-based market research firm KubasPrimedia
The U.S. is tempting because of the size of the market, but it's also much more expensive to deal with. You have to go there, so every meeting is $1,500 a pop. Also, the U.S. market is 10 times bigger so she has to ask herself, is she going to be able to have enough manufacturing capacity to supply a contract? The agreements she signs with the U.S. retailers will also heavily be in their favour. She'll basically have to sell on consignment, so whatever she doesn't sell, she'll have to haul back to Canada.
In business, there's this race between expenses and revenues. And while revenue opportunities may be tempting, she has to be very careful about the expense side. She doesn't want to run out of capital before she gets off the ground. So start in Canada – it'll be far cheaper – then take on the U.S.
Sandy Huang, president of Vancouver-based Pinpoint Tactics Business Consulting
Follow where the money is. If the U.S. is more responsive, then focus there to establish a customer base. When she has more resources and energy, she can reexamine the Canadian market.
Considering the population statistics and that there are more overweight women in the States than Canada, then it does make sense for her to look south. Having a recognized spokesperson, which helps you market your brand, speaks volumes. Plus, there is something to be said for being in the fashion industry in the U.S.
She should really focus on PR. Try to get exposure in American magazines or online publications to help her establish herself and her brand. Leverage her top model spokesperson and generate buzz about her business. When she gets her name out there, Canadians will start paying attention.
Cheryl Ng, founder of Toronto-based Foufou Dog
When we started, we focused more on the U.S. than Canada. One reason was that Canada doesn't have as many trade shows. Trade shows make it easier to attract U.S. clients. America's also much bigger. For the first four years of my business m75 per cent of revenues came from the U.S. and 25 per cent came from Canada. Now, 50 per cent still comes from the States.
Start doing the trade shows – find out which ones attract the most buyers and have a plus-sized section. Connect with American fashion bloggers. Build brand awareness. Eventually, Canada will come calling.
THREE THINGS ALLISTYLE SHOULD CONSIDER NOW
Expense versus revenues
Selling into the United States can be an expensive proposition. Travelling back and forth for meetings is costly and so is shipping goods across the border. If she can afford the expense, though, it is a bigger market with bigger sales potential.
Hit trade shows
The best place for retailers to market their wares is at trade shows, and there are many more of them in the United States. The more shows she can attend, the more access she'll get to American buyers.
Leverage her celebrity spokesperson
Her strongest asset right now is Whitney Thompson, who won America's Next Top Model. Go where people recognize her name. She may help open doors in Canada, but she's better known in the United States.
Special to The Globe and Mail
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