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BRW 'Young Rich' lister Dorry Kordahi has launched a game changer to tackle the “depressed” Australian fashion industry.
Kordahi, managing director of local clothing business DKM Blue, today outlined his intention to create a manufacturing plant to circumvent manufacturing issues faced in Australia.
The manufacturing plant will see Kordahi leverage his established business in China and will concentrate wholly on smaller orders - as little as 50 units at a time.
“I bucked the trend early in my career and have had my own very successful, centralised sourcing and quality control office in Shanghai for 13 years. This makes DKM Blue more efficient and cost-effective than most of our competitors,” Kordahi said.
“However, we still face the problem that Australian companies are often dwarfed by the volume of business placed by the American and European giants.
“To give you an example, Zara manufactures some 450 million garments a year in China. That is over 1,200,000 a day!”
The initiative from DKM Blue will mean that it can potentially provide a niche service to its Zambelli and Nic Green labels and keep them more relevant for today’s fast-changing market.
This will be made possible by not having to hold excessive stock levels which China demands.
The move will also allow the company to offer its corporate customers flexible options for their styling requirements specifically when combined with the volume capabilities they already have in place with strategic manufacturing partners both in China and Vietnam.
This will enable clients who want to order between 50-500 items and then re-order when they require, making the chain of supply and demand more cost effective.
DKM Blue said the launch of the new service is a testament to Kordahi's understanding of the stresses facing start ups and entrepreneurs, having been through the process himself when he launched DKM Blue.
Kordahi purchased Ambassador Clothing (which owns retail labels Zambelli and Nic Green) last year, after the iconic Australian brands were forced to shut down their 15 retail stores due to excessive costs in Australia.
“Running any business well these days is about keeping costs, particularly asset costs such as inventory, as low as possible. At the moment, companies may be holding an inventory of more than a thousand units, but in all the wrong sizes.
"They may have $50K tied up and will be facing the reality of having to spend twice that to balance their stock inventory. With my new system we can reduce that cost by about 80 per cent. I think anyone in business would agree that is a very significant saving,” he said.
Kordahi added that controlling costs on one end of the equation, translates into savings for the buyer and increases both volume and margin.
“I have always maintained it is much better to work smarter, not harder. By applying this logic on behalf of my customers, I am making their investment work smarter not harder.
"Ultimately this will make what has fast become a moribund local industry a much livelier and effective place. I think it will shake the competition up quite a bit too!”