After the official launch/reveal of the Portland Apparel Lab, here’s where I left off. After a brief respite from the brain-taxing effort of trying to take in the full scope of PAL, I’ve decided to break this up issue by issue. So here is part one of PAL co-founder Crispin Argento’s answers to my questions. Again, I am sure anyone considering this has questions of their own, and I particularly think it’s worth getting a specific assessment of your individual situation to determine if PAL participation is a good idea for you. Please do contact them—they’ve made it clear they’re making time to meet with people individually and in small groups.
Another interesting development is the fact that Argento posted a photo three days ago of the sign outside Columbia Sportswear with the caption “Thinking OUTSIDE the box! Seeding the apparel companies of tomorrow in #pdx. #meeting #fashion #future @pdxapparellab #innovation…” (etc.) Could this mean that PAL has aroused the interested of Columbia? That would be an interesting development, considering so much of the discussion around the issues PAL seeks to address have circled around a perceived isolation on the part of the big A&O (athletic and outdoor) companies based here, and so many of the people having this conversation have wondered aloud if there might be a mutual benefit between these well-resourced companies and the struggling independent scene….
But first, let’s crunch some numbers.
My concern: The site’s description of the types of memberships available seems limited/unclear.
CRISPIN ARGENTO: Business Memberships are the companies, brands, designers, and the centerpiece of PAL. We are looking to secure 50-75 start-ups/existing brands that are interested in building their businesses through PAL and having access to the subsidized programs services. The application for Business Member brands is $75. If applicants are chosen for membership (a selection committee/advisory board will review talent, drive, potential, and financial security ), we are asking prospective members to secure their membership with the $575.00 initiation fee. In total, general business membership is $6,275 per year, general student (full-time) membership is $3,875. If your business has two founders, membership #2 (per LLC) for the Co-Founder/Partner is $2,675. This gives each co-founder/partner full access and benefits, but the business expense/fees can be split, making membership $4,475 per business partner, or $372/mo. These costs are very competitive and less than many incubators around the country, yet PAL offers a lot more resources, services, benefits, etc. Plus, through membership many of the additional fee-based services in Strategize, Design and Activate are highly subsidized and below market.
Argento invites comparison to equivalent memberships at the following (I added what it looks like the annual cost is to a member similar to PAL’s Business Member): Manufacture New York ($4,900); Fashion Incubator San Francisco ($4,850, plus this item listed under eligibility requirements: “Fund their businesses, including creation, production and marketing of their designs, which could cost approximately $45,000 for 2 collections a year.”); Las Vegas’ Stitch Factory ($8,340); and Seattle Fashion Incubator ($6,000).
It should also be noted that Argento’s $6,275 number includes the one-time initiation fee. A second year’s annual cost should then be $5,700. Another observation: The total cost for a single company with two partners looks like it would be more expensive than a company with sole proprietorship, even though a split between the total cost of the first year would be less for each individual: The $6,275 would still be charged for the initial partner, and then with the added co-founder fees, including another $575 initiation, the total comes to $8,950.
Argento’s comments also correct an impression I had after leaving the launch event, which was that would-be members only have to risk $75 at this point. But once accepted, the initiation fee comes due, so it’s actually $650 that’d need to be on hand in the next couple months.
ARGENTO: Resource Memberships: Photographers, Stylists, MUAHs, Attorney and other professional services that support Business Member brands with expertise and services. Photographer and Stylists/MUAH members (looking to secure 25-50) will have access to the PAL Photo Studio, Green room, co-working space, etc. and many of the perks available to Business Members. Application fee for Resource Members is $75.00. Application review includes a portfolio review, peer review, etc. We want members that are talented and serious professionals to serve Business Member brands. The photo studio can serve as photographers primary studio, but we intentionally kept membership levels low and services/use flexible because we see this as a photographers secondary space for quick-turn content development, e.g. the quick and dirty, in-season new product shoots, single garment/product shoots, lifestyle/brand content creation, etc. Given the number of seasonal collections needed this day and age to keep consumers on their toes, doing 5-10 full day shoots per season is very costly. The reason many young brands have in-house photographers now. For example, the photographer members can rent the studio (using monthly credits) for a minimum of two hours, a half day or an entire day full look-book/product photography. Through membership, hourly rates equate to $19-$22 per hour or $150-$175 per day. The photographer credits can be used all at once or spread out over the entire month. These rates are far below competitors for equlivalent space.
We are not looking to cut into other studios business we only want to collaborate with them and best serve our Business Members brands needs. PAL works because a lot of the service/product supply chain is in-house and costs are shared between departments/divisions. Business Members are free to use any photographer/stylist/MUAH of their choosing and are free to negotiate rates between the two parties on their own. It makes the most sense for Business Members to encourage their preferred photographer/stylist/MUAH to become a members because non-member guest day rates at PAL are not cost effective ($125 (guest) + $250 (Photo Studio).
Patron Membership: This is intended for supporters, family, friends, co-workers, art patrons, corporate philanthropy, etc. Somewhat like having a museum membership or PICA membership. All funds through Patron Membership fund the Grow: Portland Designer Fund program which is money available to members through the grant and loan programs. We are currently exploring having a 501c3 fiscal sponsor for the Portland Designer Fund so that all gifts to Grow are tax-deductible. Once that is established, the Portland Designer Fund will be hosted at portlanddesignerfund.org (grant program only) and is designed for member brands and recruiting design talent to Portland. Think Eco Domani, Andam, etc. The equity/investment aligns outside seed/angel investors with member brands when they are ready to take on equity and growth funding.