This is an exclusive excerpt from our October edition. For more in-depth reportage like this, subscribe here.
No stores, no product, no people, just a name. That is all that is left of one time great brands Rhodes and Beckett and Herringbone.
Only a few months ago, it appeared as though it was all over for the brands, as both slipped into administration.
Turnaround, restructuring and insolvency advisory firm Cor Cordis were appointed voluntary administrators on February 6.
Doors closed and concession stands disappeared as if they were never there, and each brand began its own 'fire sale' of stock.
However, on July 25, it was revealed that a buyer for Rhodes and Beckett had been found.
The purchaser, Black Bear Holdings Pty Ltd, is headed by ex-brand director Michel Boutin and supported by private equity firm AO Capital.
While Black Bear has acquired Rhodes & Beckett, Van Laack Germany, the current owners of the Herringbone brand, will retain its ownership, where Black Bear will look to relaunch Herringbone under a license agreement for Australia and New Zealand in the new year.
Boutin, now operating under the title of managing director and owner, says while the brands appeared to be the victims of changing consumer spending patterns, it was in fact far more simple.
“The traditional mistakes were made.
“Retailers are making the mistakes and they are blaming a lot on consumer spending but essentially it comes down to the fundamentals of retail, which is don't take on the liability you can't afford.
“In this case, where Rhodes and Beckett is concerned, they took on a lot of leases that were unsustainable, that were nice to have or got induced to take on by landlords throwing a lot of incentives at them and fundamentally they couldn't afford it.”
“Coupled with that, the age old mistakes of too much overhead, purchasing on a whim rather than a controlled spending, all the fundamental errors were made.
“When you compound all of those you just can't get out of it. You're in a vicious cycle.”
Boutin believes that for these reasons, both brands are not over in the Australian fashion market, as the basic errors can be addressed with simple solutions.
As part of the purchase, Black Bear has acquired the remaining assets owned by Rhodes and Beckett.
One of these is access to a database of roughly 150,000 customers, at least half of which Boutin says are active shoppers. He says this is a rarity in the premium suiting space, something the brand will look to capitalise on when relaunching.
“We bought Rhodes and Beckett, it is a juggernaut, it is an icon in Australia, it's not well known overseas.
“It is a go-to brand that is a luxury offering at a premium price and has a huge following.
“That's something that the brand should stand proud and deliver on, so it is a question of going back to what that database expects, what that customer expects, in terms of an experience in-store, product, service and not abusing it either.
“Not going out and opening 50 stores. It's looking at where are the optimum stores, where can we guarantee that experience and what else can we do.”
For bricks-and-mortar, Boutin believes it is about going back to those fundamentals that were initially ignored.
Both brands are expected to be back up and running by 2018, with Rhodes and Beckett set to launch in November 2017 and Herringbone to follow in the new year.
Boutin says only a handful of stores will be launched to start, with Melbourne and Sydney as key locations.
“Rhodes and Beckett will most likely launch with anywhere between five or six stores, spread over the country, mainly Sydney and Melbourne. We take possession October 1, so the relaunch will happen from then.
“In terms of Herringbone, it will be in the new year. How many stores, we don't know. That will definitely be brought down to smaller, better, rather than too many stores.”
According to Boutin, each eCommerce site will undergo a complete re-platforming.
He says online sales were one of the few areas of the business that continued to perform well.
“Our eCommerce business at what we purchased was very strong, it was roughly 20% of the business. Which is unheard of in this category.
“Most of those businesses are still in the single digits as a percentage of overall business and nudging 20% is pretty impressive and that is off the mistakes they have made”.
As for product and price, both brands will be returning to original strengths.
For Rhodes and Beckett, Boutin says this is suiting and a complete wardrobe experience.
What will change for each brand is partnerships, with externally branded footwear, leather goods, accessories and fragrances all brought in to complement the new product.
“What makes the two brands work is their design and quality. The pricing as such fits into a price point that is premium, it isn't a $50 shirt, it's not a $100 shirt, it's a premium offering.
“We won't make the previous mistakes of trying to brand everything Rhodes and Beckett or Herringbone, from accessories all the way to the core product.
“To give you an example, shoes.
“We will be bringing in shoes that will be branded from an international shoe supplier and will be branded their label and not Rhodes and Beckett.
“It will be, for lack of a better word, a shop-in-shop type of atmosphere and that is purposely done that way.
“These will be exclusive arrangements and shoes is one category, leather goods is another.
“We are even talking perfumes and fragrances as well to make sure we can offer that whole wardrobe concept within Rhodes and Beckett and Herringbone.”
Buying and sourcing for each brand will also be about a 'back to basics' approach. Even though Van Laack's sourcing and distribution channels will still be utilised by both brands, Boutin says there will be a greater focus on ensuring quality.
“We hold manufacturing points pretty much everywhere else in the world, from Vietnam to Turkey to Italy, even the UK.
“However, we will source what is best for the consumer and always keep the consumer in mind, rather than cost cutting and competing against brands that are just lowering and lowering the production costs, therefore the production quality.
“We need to maintain a certain standard and that is something we are going to do no matter what. Fabric-wise we will always be European, there will be some selections that come out of other countries but predominantly it will be European fabrics, namely Italian for shirts and for suiting.”
Rhodes and Beckett will also look to tap into the women's market as part of the relaunch, with the brand looking to shake the idea that it is a male-orientated label.
Made-to-measure services will be brought in to cater to both markets, something Boutin thinks will draw in the lucrative female businesswear consumer.
“A lot of people think of either brand as a men's brand and, for Rhodes and Beckett, 30% of their volume is women's.
That category alone will grow in importance and mainly because there is nothing else out there that compares for women.
“Made-to-measure is going to be a big side of our business, it currently is in shirting, we will be birthing that in suiting as well. More importantly in womenswear and you don't have a lot of that in the industry.
“In terms of buying, the focus will again be quality and bringing back choices and selections for that customer base that they lost over the years.”
As the Herringbone brand remains under review, Boutin is adamant there will not be a widespread 'cull' of product but rather a repositioning.
“Herringbone will be redefined in a sense of what is winning and what is not. It's not a cull.
“For example, 60-70% of its volume comes from men’s shirting, so for us refocusing on men's shirting means we will be putting more into that and that part of the business.
“It doesn't mean we are going to be culling all sorts of categories, we'll just be focusing on what works, rather than trying to do everything.”
Similarly, Rhodes and Beckett will look to pick up the pace in regards to product availability and frequency.
Boutin believes consumers in need of targeting are those who have remained loyal to the brand and, as a result, crave new product and a more focused, defined offering.
“Rhodes and Beckett, the expansion is a faster product at a bigger tempo in terms of supply, rather than the past where you just have one big drop of product that would last six months.
“A lot of our customer base, as I mentioned, are repeat customers and seek out newness. We will be addressing that, we will be having new product in store on a six-week rotation.”
Looking ahead, department stores will remain an avenue for Black Bear, which is currently in conversations with both Myer and David Jones.
The challenge Boutin sees with concessions is ensuring each brand’s messaging is not confused in a different retail landscape.
“Are we in talks? Yes, we are. We are in talks with both parties on different platforms. Is there a future with either of the brands in there? Yes. How will it look? I can't really say right now.
“The customer is different in the department store, you have a luxury a customer, you have an everyday customer and you have a discount customer.
“What's important to understand is that the department store customer is a department store customer and a lot of brands like Rhodes and Beckett have gone in there thinking they can attract their customer into the department store and it's not [the case].”
For Black Bear, this is only the beginning, as the company looks to traverse the continent looking for more 'fallen angels' in Australian retail to add to its newly formed fashion stable.
Boutin says that the company will only look to buy businesses that grow with, and boost the strength of its existing portfolio.
“We are also looking at other purchases around Australia and worldwide, to complement that arsenal and that backing. One thing we won't look at is a brand that will compete against what we already have.”
What can we expect moving forward? Simple. It's business as usual, a return to reality, a rebirth in retail and Boutin believes both brands have already got it under control.
“This is some kind of reality check back to retail. Not being fake about it and not trying to be cute about it. We are what we are and we do what we do.
“The strengths are in what we do and not in what we pretend to be. I bring it back to categories that no brand in our field should be doing.
“I shouldn't be doing a Rhodes and Beckett fragrance, that is ridiculous. I should be bringing a fragrance that is complementary and that elevates that the brand, that our customer, be it female or male, can identify with.
“Retailing is not that difficult, it's being humble about it and ensuring that the customer has that experience every single time they walk into your shop.”