How do you achieve 30 per cent year-on-year growth for five years, experience your biggest year ever in the middle of a recession, and confidently forecast it is only going to get better? Superior Activewear tells Kate McDonald how it’s done.
Sydney-based apparel wholesaler Superior Activewear is set to hit a major milestone this year: the sale of its 10 millionth Gildan T-shirt. This quite extraordinary number has been achieved in only five years, following record growth and an even healthier burst this year. In fact, sales have grown by 50 per cent since last November, and don’t look like slowing down.
It’s got nothing to do with discounting, that’s for certain. The company’s operations manager, Robert Taylor, says Gildan often sells at a higher price than competitors, and even in the middle of a financial meltdown pricing was held steady.
So what’s the secret? The quality of the garment and knowing your market, Taylor says. Superior Activewear is the sole wholesaler of the Gildan brand of T-shirts, polos and hoodies in Australia, and concentrates on four main sectors: promotional merchandise, touring artists, the fashion industry and embroiderers and decorators who sell their creations at community markets.
While you’d think the latter would predominantly consist of small lots, the company’s largest customer in Queensland actually makes his living selling T-shirts at markets.
“There is also the online, design-your-own T-shirt market,” Taylor says. “There are two or three main ones in each state and some of these are very good customers.”
Fashion makes up 25 per cent of the business, the company supplying about 600 regular clients throughout the country specialising in urban and streetwear. Most of them relabel the garments. “We have a handful of really big fashion customers, who generally do their own indents but top up from Gildan.”
Gildan has a retail arm through Golden Breed in Victoria, which sells truckloads of plain T-shirts to entities such as Kmart.
However, it is touring artists, mainly international bands, who are the company’s bread and butter. “We dominate the band merchandise market in Australia, certainly from an international act perspective,” Taylor says.
“The main reason is that you are safe with Gildan – you know the quality and you can buy it anywhere in the world and it will be the same colour and size. Your T-shirt will survive an ice-cold wash and a hot dryer.”
To get an understanding of just how much merchandise can be moved by a big-name act, a tour by the likes of AC/DC will require tens of thousands of black T-shirts. The singer Pink, who recently finished a two and a half month tour of Australia, ordered thousands of items a week, predominantly in black, white and cardinal red. She also liked the look of Bella knickers and tank tops, which the Superior Activewear also distributes.
The company’s managing director, Donovan Callaghan, was approached by the US-based Gildan Activewear five years ago to act as the wholesaler in the Australian imprintable market.
Gildan manufactures predominantly in Central America in wholly-owned factories, and runs a virtual warehouse from North Carolina, from which a container load of 60,000 T-shirts is shipped to Australia at a rate of one or two every seven days.
And while the Australian arm is shortly to celebrate selling its 10 millionth garment, that pales into insignificance against the massive US market. “Ten million sounds good but Disney can place an order for 30 million in one day,” Taylor says.
In total, Gildan sells about 500 million garments a year worldwide. Its main competitors are American Apparel, Fruit of the Loom and Haines, but Gildan is more than holding its own.
When Superior Activewear started up in 2004, it sold 200,000 T-shirts in its first five months. Every year for the past five years has seen growth of 30 per cent, with this year even better.
“We are growing simply on the strength of the product,” Callaghan says. “Growth is snowballing.” Snowballing so much that the company has just invested close to $100,000 for an IT upgrade to improve online ordering and to better cope with demand.
Five years ago the warehouse was 750sqm – it’s now 3000sqm and is a sight to behold. It takes a lot of space to house over a million T-shirts, which the warehouse does in order for just-in-time delivery, in 52 colours and sizes ranging from small to 5XL – which is also a sight to behold – in unisex, ladies and kids’ ranges. (Sizing is problematic, Taylor says, but he can’t see the point of half an inch difference between sizes. “It’s nuts. What does size six mean, anyway?”)
Hoodies do well, although they are highly seasonal, but the basic product is the good old-fashioned black tee, which makes up 60 per cent of sales.
Two styles are the most popular – the style 5000, a 180 g/m2 100 per cent cotton preshrunk jersey, which is favoured by bands; and the style 2000, a 205 g/m2 cotton preshrunk jersey, favoured for promotional products and the fashion industry. Taylor says a new range of ring-spun cotton tees has just been released and is doing well.