A Manufacturer Learns Hard Lessons About Negotiating

Courtesy of The New York Times. By ADRIANA GARDELLA

At the most recent meeting of the She Owns It business group, Susan Parker talked about recent changes at her company, Bari Jay. These included hiring new designers and negotiating new distribution agreements.

Ms. Parker said she was thrilled with the two new dress designers who replaced the company’s previous designer and her assistant. “The whole company has changed from these two new people,” she said. The atmosphere in the room where the designers work has improved so much that Ms. Parker said that even someone who doesn’t work at Bari Jay commented on the positive energy.

“That’s fantastic,” said Deirdre Lord, who owns the Megawatt Hour.

“Only time will tell if their designs sell,” Ms. Parker said, but she finds it refreshing to see designs that are different from what Bari Jay had been offering. The new designers have also taken initiative and sought to involve Ms. Parker in their process. For example, they recently questioned an approach to an existing design, explained why they didn’t think it would work and offered alternatives. Ms. Parker said that, while she still wasn’t “100 percent convinced,” she gave them the go-ahead to try it their way.

“They’re really working together as a team, which is funny because I hired them separately and they couldn’t meet each other” before the hiring, Ms. Parker said (one of the designers lived out-of-state and moved to join Bari Jay).

Ms. Parker is also unwinding international distribution agreements that her father negotiated when he ran the company. The new agreement with an Australian distributor requires payment before Bari Jay will ship its dresses, an important difference from the agreement with the previous distributor, Ms. Parker has learned. Bari Jay has started working with the new distributor, but the old one still owes the dressmaker about $20,000 and recently filed for the Australian equivalent of bankruptcy.

Further complicating the situation, because the dresses take three months to make, Bari Jay still owes shipments to the distributor. Ms. Parker does not want to hold those dresses hostage because the distributor’s stores have paid deposits, and in some cases the full price of the dresses, to the distributor. Also, the distributor had previously told Ms. Parker that Bari Jay could sell directly to her stores once the distribution agreement ended. Ms. Parker wants very much to retain those stores as customers.

Now, Ms. Parker said, the distributor is telling stores, “Bari Jay doesn’t care, they didn’t make your dresses.” Luckily, she said, some of the stores have contacted her directly. She has told them she has their dresses and is negotiating with them directly.

In the United Kingdom, Bari Jay has found a new distributor, but needs to figure out how to get rid of the old one, Ms. Parker said. While the old one has paid Bari Jay almost everything he owes, he is still using Bari Jay’s name, which is registered as a trademark in the United States but not the United Kingdom. “The new distributor, understandably, will not sign the paperwork until we have registration in the U.K.,” said Ms. Parker, who is in the process of securing it. Without it, she said, she has no legal right to stop the distributor from using Bari Jay’s name.

Ms. Parker said getting “burned” with the previous distribution agreements taught her to be stronger when negotiating the new ones.

Ms. Lord, who was in the middle of negotiations with a large association that is considering forming a relationship with the Megawatt Hour, said protecting yourself could be difficult “when you’re the little fish, negotiating a contract with the big giant fish.” The smaller party can feel that it has to make accommodations that aren’t in its best interest, she said.

Ms. Parker said that, although it could be hard, “small fish” needed to walk away from deals that don’t feel right.

“Those mistakes that you do make, you learn from very quickly, and that’s why you can hold your ground more with time,” said Jennifer Blumin, owner of Skylight Group.

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