Thanks to her business savvy, Priscilla Shunmugam has turned Ong Shunmugam, the local label which has garnered local and international accolades for its modern, inventive and sometimes-cerebral spin on the cheongsam, into a profit-making fashion label in a time of economic uncertainty. How did she do it?
8 DAYS: You’d think that being a successful fashion designer just means making clothes that people want to wear, but having a business sense is the key to survival.
PRISCILLA SHUNMUGAM: Fashion is a business at the end of the day. The sooner you realise that, the better. I probably only spend 10 per cent of my time designing. The business side of things takes up 70 per cent, and the balance is spent on production. It’s important to know how much you’re spending versus how much you’re earning, and making sure that you have healthy cash flow. As manufacturers, we have to spend money up front on materials and production, and that exposes fashion designers to high risks. If you don’t manage your cash flow and spend a lot of money up front, you’ll be in trouble if your clothes don’t sell. I’m very mindful of what our overheads are and what we need to produce and sell to keep recouping the money we’ve spent up front.
Ong Shunmugam took just one year to break even, and your revenue in the first half of this year has already surpassed your 2015 revenue. That’s impressive.
We offered a new-to-market product that no one else was offering. The need was there, and we were quick to plug that gap. Our price point was just right — it was not so unaffordable that you needed to wait for a sale, yet gave us a healthy enough margin that we didn’t need to mark up and do discounts later. Our cheapest dress is $499, and our most pricey ready-to-wear off-the-rack piece is $999. We also carefully control our quantities. Even if we know that something is a bestseller, we draw a line and say we’re not producing any more. You have to balance your greed and customer loyalty.
You’re trained as a lawyer. Would you be making more if you had stayed in law?
Of course I’d be making more than this lah. (Laughs) But I’m fine with that. When I look at what my company has achieved, it’s great. I would say I’m financially stable. I don’t have any debts. When I first started, I could not pay myself a salary. Everything was pumped back into the business. Once we broke even after a year, I started paying myself. It started off as a very paltry sum but I made a commitment to give myself a good raise every year. It’s worth noting that I am the 100 per cent shareholder of my company, and that’s a good feeling. I also pay myself an annual bonus, but it’s always tied to our sales and annual revenue. I draw a clear line between the company’s money and my money.
It must have been hard going from earning a lawyer’s income to earning nothing.
I quit law and went to study fashion, and it was a very hard time to go without a salary. I wouldn’t go out for dinner with my friends ’cos I was so scared I couldn’t split the bill with them. For toiletries and make-up, I had to downgrade to drug store brands, which was not great, ’cos I have sensitive skin. That’s when you realise the value of money. My parents — who live in Malaysia — asked me if I needed help but I refused to take money from them. But now, I’m at a stage where if I see something I like and it’s not a ridiculous price, I can just buy it. I always tell my younger staff to be mindful of spending in their 20s. If you don’t learn to save, you’re gonna pay for it in your 30s. Because that’s when you want to have money in your bank, and be able to spend and travel.
What’s a recent extravagant purchase?
I was in Korea recently for a conference and I went to Galleria, my favourite shopping mall in Seoul. I only had 45 minutes to shop and I tried on this sweater from Moschino, the one with the bears. It was so cute and fit so well and I loved it. I have no time to shop in Singapore, so I was like, “Okay lah!” I didn’t even convert the price from Korean Won. When I went to the cashier and she asked me if I wanted to pay in Singapore dollars, I realised it was, like, a thousand bucks. I was like, Oh my God. On the flight back, I was like, Okay, I’m not spending any money for the rest of 2016. (Laughs)
What’s the next step for Ong Shunmugam? What’s your take-over-the-world plan?
(Laughs) Last year, when we turned five, I made the decision to engage external expertise. I engaged Deloitte as my financial advisors to move my business forward. As a business owner, you need to be sensitive to your blind spots, and know when you cannot see certain things. They did an internal audit of the business and at the end of six months, they generated a three-year business plan with very clear guidelines and goals and steps to take. Clearly, we are no longer a start-up. We are a mature and stable small business with a good core team and the plan is to have a strong presence in three new markets by 2018.
Atelier Ong Shunmugam is at 43 Jalan Merah Saga, #01-76, Tel: 6252-2612.