Tailor-made solution — Finetrading for the procurement and storage of children’s fashion

More and more women are foregoing children in favor of their careers. Germany has the lowest proportion of children in the European Union. According to the European statistics office Eurostat, only 13.1 percent of the population in the Federal Republic of Germany was under 15 years old in 2014. The fashion industry is also feeling the effects of this; it has shrunk by 25 percent since 2000. Despite the highly competitive market, the Kids Fashion Group, headquartered in Plienzhausen near Stuttgart, has not had any "new blood worries" in recent years. On the contrary, the Swabian children's fashion specialist Kids Fashion Group is growing - not least because of its financing mix, which includes the use of finetrading for goods and inventory financing. This allows Kids Fashion Group to secure liquidity quickly and flexibly, makes it less dependent on the credit market, and even strengthens its rating and negotiating position in upcoming bank negotiations.

The Kids Fashion Group has long since outgrown its children's shoes. The company with 500 employees in Germany was founded in 1949 by Josef Kanz in Neufra, Swabia, as Josef Kanz GmbH & CO. KG. Since 2013, the business has been operating under the name Kids Fashion Group GmbH & Co KG. In the meantime, the brand portfolio has grown to 14 children's fashion labels; most recently, Kids Fashion GmbH acquired, among other things, the majority of shares in Bellybutton, the Hamburg-based fashion label that ex-model Dana Schweiger founded together with actress Ursula Karven and three other friends.

"In the fashion industry, pre-financing of purchases plays a significant role because merchandise is usually purchased before the season begins and the resulting revenue cannot be realized until several weeks or even months later. This may mean that a period of several months has to be bridged with interim financing. We cannot finance our continuous growth in this very capital-intensive business through our bank loans alone; since 2012, we have also relied on finetrading as a supplement to classic bank financing," explains Harald Hepperle, one of the two managing directors of the Kids Fashion Group. He was made aware of the exible bank reinforcement by his house bank. "To meet the challenges of the market, SMEs will need more than standard solutions in corporate financing in the future. "Among other things, this is why we have decided to cooperate with alternative financing providers - for example, in the field of finetrading," says Stephan Schnippe, formerly a member of the Executive Board of International Bankhaus Bodensee AG. IBB AG has been offering its customers finetrading as a supplement to traditional bank loans since 2008.