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Photo Courtesy Gary Wassner



Gary Wassner is the CO-CEO of Hilldun Corporation, a business founded by his father fifty years ago. The company provides factoring and financial services to manufacturers, wholesalers, importers and service providers. In addition to running the business, Gary is a mentor of the CFDA Fashion Incubator and Fashion Law Institute at Fordham.


Can you explain how factoring differs from a regular bank loan?

Factoring is cash flow oriented.  We set a percentage we’re willing to lend to the client, and that percentage is based upon the total of the open, unpaid accounts receivable the client has on the books.  So the line we establish grows as the business grows and the shipping increases. A bank loan is a fixed, pre-established amount.  Bank lines are generally more balance sheet oriented and they don’t automatically increase as business increases or accounts receivable increases. In addition, factoring services far exceed the services a bank provides. There are two sides to factoring:  lending and credit/collection services. All our clients submit their orders to us as they receive them. We credit check them in our systems and against the financial information we have on file. We then advise our clients which stores we are willing to guaranty and which we are not. We provide detailed reasons when we decline a store’s credit so the client then can go back to the store and establish credit card or prepayment terms. When we guaranty a store, if our client ships according to order and sample, and the store does not pay due to its financial inability to pay (not a merchandise dispute) then we pay the client. Our clients take no credit losses if a store we approved goes out of business. We also do all the collection work for our clients, process the payments and credit cards, and send out the statements and invoices to the stores on our client’s behalf.

Our relationships with retailers in the designer and luxury market are extensive. We meet regularly with many of the high profile retailers to assess their financial situations and to discuss what’s working for them regarding brands and categories of product etc.  We frequently recommend collections to stores and vice-versa.  We are very unique in the factoring/financing world. Our decision to focus on the designer/luxury market many years ago was instrumental in the forging of these relationships. In order to speak intelligently to the retailers we do business with, we felt we needed to be more than factors, more than bankers. We needed to understand fashion and product, all aspects of the product from the design stage to the execution.

Are there other factoring businesses that focus on development of fashion brands as you do?

As far as I am aware, no one in this industry is as involved in the fashion market as we are. This was our choice and we’ve embraced that decision. We work very hard to identify new talent and to support it. We understand what it takes to help a young company grow.  And we understand what a successful designer company needs to continue to thrive in this market or any market. We advise our clients on all aspects of their businesses if they desire it, and many do.

Who founded Hilldun?

Hilldun was incorporated in 1952 by my father and my uncle, and funded by my grandfather originally. We owned and managed real estate and did some financing in the apparel industry at that time, but none in high fashion. My partner of the past 20 years, Jeff Kapelman, is both my cousin and one of my closest friends. He became my partner 20 years ago when my uncle retired and together we’ve turned Hilldun Corporation into the company it is today.

At what point did you join the company?

I joined the company in 1974 at my father’s request.  I was completing my doctoral degree in Philosophy at the time and I had intended to pursue a career as a professor of Philosophy. My father got sick and asked if I’d come back to NY to assist him. He did not recover from his illness and passed away a number of years after I joined him. Needless to say, I never left Hilldun. Soon after I joined the firm I met Betsey Johnson. She was just starting off on her own and I thought she and her partner, Chantal Bacon, were amazing. She was one of the first true American designers we financed, and our relationship lasted almost 14 years. All the major iconic American brands were in their infancies then and I had the good fortune of working in various capacities with many of them including Marc, Tommy, Willi Smith, Michael Kors, Badgley Mishka, Anna Sui, Stephen Sprouse etc.

What do you find are some of the biggest changes in the fashion industry since then?

Our offices were always in the Garment Center and when I started working, the Garment Center was a hub of manufacturing.  Companies hadn’t yet started sourcing overseas. The sidewalks were jammed with push carts of hanging clothing and the streets were lined with trucks picking it up to deliver to the stores. Every building had floor upon floor of garment manufacturers and the whir of sewing machines could be heard in every elevator of every building in the district. NY was not known for fashion innovation as it is today. There was no Fashion Week and American designers were treated like second class citizens. High Fashion was something the public connected with Paris and Milan entirely. We were just beginning to produce uniquely American style, as Calvin and Donna and Ralph were all just emerging, independent and small companies. It was a very different world of fashion than it is today in NYC.

How do emerging designers qualify for a loan? What do you look for most?

We look first at the product to assess that we believe in it and believe there is a market for it. Then we meet the individuals who own and operate the company. They’re as important if not more important than the product.  Finally we study the stores they sell and the payment histories from these stores. Lastly we examine the balance sheet and corresponding financials.

Can you tell us about production funding, something you do for companies you believe in and whose businesses are growing beyond what they can finance on their own?

Sure, often we’ll advance the funds for production as well. We’ll ask that they provide us with a cash flow projection for the season so that we can anticipate when their account will be back in formula after the shipping is complete. If it all makes sense, if the margins are correct and the orders are strong, then we’ll agree to fund the production by advancing the funds required for fabric purchases and factory payments. In many cases we’ll open L/Cs (Letters of Credit) for imported finished goods and/or L/G’s (Letters of Guaranty) for domestic purchases. In other cases we’ll sign agreements with domestic factories to pay them directly after they complete production and ship the orders to our client or directly to the stores or warehouse on behalf of our client. In these situations we act much like an equity partner would, but we take the risks without taking equity away from the client. We do it instead for a fee. This type of production financing allows growing companies to retain ownership of their brand and build it organically, rather than taking in a partner and giving away either control or stock or both.  We’ve done this for many of the large brands in the industry today who are now household names, and this allowed quite a few of them to reap much more significant rewards further down the road when they were able to sell to Private Equity for considerably larger amounts than they would have at the earlier stages of their growth.

What happens when a client defaults on a loan?

We’re a secured lender. Technically all the loans are self liquidating.   We lend against the accounts receivable, so the payment of the receivables pays back the loans. We have a very low default rate amongst our client base, and fortunately, very few bad debts.

What percentage of applicants have realistic goals?

I would say 80%. People are more realistic today than ever before.  They want to make money. Some want to be stars, and all have dreams, but most are down to earth and practical.

Can you tell me about your childrens book, Isabella Cucharella? What is it about?

The book is a picture book written for young fashionistas. I wanted to write something in verse that a parent could read to a child, yet not have it too simplistically worded. The illustrations are very detailed and full of items to capture the attention of a young child, the characters are bold and popping with personality. It’s about a young girl named Isabella whose mother is a seamstress for a designer’s atelier, Josette J’Adore. Josette is insensitive and pompous, and past her design prime. Isabella has a special talent for fashion design and turns the tables on Josette J’Adore by creating a collection of her own and presents it on the runway to rave reviews.

You’ve donated a large percentage of the book proceeds to the CFDA. How did that come about?

I believe in the CFDA Incubator program, I’m both a mentor and on the advisory board. I feel that the program will endure and that it deserves financial support from the community. I’m hoping my donation of 50% of the proceeds along with a cash endowment that I pledged, will inspire others to support the program in their own ways.

Who are some of the designers you’ve mentored through the CFDA mentorship program?

Bibhu Mohapatra, Alice Ritter and Public School are the three designers from the original ‘class’ that I mentored regularly, along with a few other exceptional mentors. I’ve worked extensively as well with each of the ten new design teams entering the CFI for the next term, and as soon as they are installed in their work spaces in May, I expect that we will begin formal mentoring on a regular basis.

Do you have a favorite?

LOL. That’s an unfair question and one I can’t answer. I adore them all. Each brings something unique to the table and each has a bright future ahead of them.

What established designer do you admire from a business standpoint–someone you would point to as a good example to young designers?

Alexander Wang—who has been a client of Hilldun since the beginning–comes to mind immediately, though there are many others. Alex has done everything right.  He’s creative, versatile, committed to his design vision and his customer, clear about who he is and where he wants to be down the road. He has a family business and has thereby retained control of his production, quality and distribution. He’s humble and not full of himself despite how successful he’s become in such a short time. His rise to fashion fame has been extraordinary and totally deserved. He’s the epitome of effortless fashion, and his collections thoroughly represent his vision. I

What advice do you find yourself offering new businesses most?

Maintain control of your company as long as you can. Make sure your quality is always the best. But most of all, know who your customer is.  Don’t try to design for everyone. One of the first things I ask a young designer is to describe their customer to me.  Some can do that instantly. Some have the image of their customer etched on their brain. Others struggle to answer. If you don’t know who you’re designing for, your odds of success are greatly reduced. Designers don’t reinvent retail, they enhance it, and brands today must have clear identities to survive across all the social media platforms that they’re available on. Fashion is a different world today, and yet it’s really still about the same thing – great product.

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