Jessnic & Co – Global working capital
Jessnic & Co is based in Hong Kong and London and through a joint venture with a Chinese factory. It is also a leading one-stop supplier to major high street retailers in the UK, Europe & US including several Arcadia brands (Wallis/Miss Selfridge), Next plc, ASOS, and Forever 21. Jessnic, whose directors have over 20 years of experience in both branded and Made to Order fashion lines, consistently delivers bespoke products that are designed and developed in HK/UK, while ensuring cost effectiveness through sourcing direct factory prices.
Jessnic typically delivers accessories from China freight-on-board (“FOB”) to Hong Kong/Chinese freight forwarders. These retailers then take responsibility to ship the goods to UK and Europe. Given the 28-day shipping time and invoice payment terms, Jessnic can end up waiting up to 60 – 90 days for invoices to be cash settled. Simultaneously, Jessnic must have cash on hand to ensure goods are delivered on time for shipping. This requires a careful balancing act with working capital, made difficult by large retailers extending payment terms.
Jessnic was offered a full factoring facility from her bank in Hong Kong, but found this unattractive given its high price and onerous security structure. They did not require finance on all their invoices and so were keen to find a solution that was flexible enough to allow them to raise finance selectively, when it was most needed.
Jessnic was put in touch with Marketinvoice through the Federation of Small Business here in the UK, and was able to join the marketplace by registering their Hong Kong limited company, along with required financial information.
The Marketinvoice Solution
By providing copies of customer invoices, purchase orders, and FOB bills of lading in Hong Kong, Jessnic was able to give registered buyers a good idea of its supply chain and sales process. Given its blue-chip UK retail clients, several buyers competed for Jessnic’s first auction, resulting in an advance of 85% of the invoice face value up front, for a fee of 1.5% per 30 days. In subsequent auctions Jessnic has seen the cost of finance fall further, with advance rates creeping up.