China in a bull shop

 

If you want to be a successful importer from China this year it will depend upon two factors. One will be your relationship with reliable factories. The days when you could play master and servant games are over.

It is now a partnership deal, with a bit more honesty (from both sides of the field) than previously.

It will be no longer practical or even possible to stomp out of one factory and take up with the one next door because it might be now making digital cameras or components for computers.

While there is not much an individual Australian importer can do about China’s rising prices, there is something he can do about getting his goods. He must order them earlier, remembering that our biggest quantities are minnows  in China’s  pond.

I am continually beset by stories of big Australian buyers who declare their intention to buy but somehow the order gets stuck in the wind-pipe.

When it finally emerges only a miracle can get it produced and shipped to meet the delivery required for its scheduled appearance on the retail floor. That is simply not going to work in the coming year.

As delivery times have tightened and suppliers have tried to keep their buyers happy many, like KCX, have resorted to air freight and worn the cost. But at more than two dollars a garment, the margins that these big interface suppliers work on cannot accommodate air freight on a permanent basis.

The viable solution, of course, is for buyers to get themselves organised and order with enough time for China to make and ship, based on current delivery times. That is going to call for some sharpening up in fashion forecasting, fabric selection and, most important of all, defining the customer.

And don’t think that ordering goods in time for China to make and ship is the end of the line.

In Sydney, there is a place called Port Botany that seems to hate importers. Certainly, it is going to be enlarged, but the roads that feed out from it are still the same miserable little ribbons that are making it increasingly expensive for a truck to run on them unless it is at two in the morning when every loading dock is closed. Melbourne is not so bad but will learn from Sydney’s anti-import behaviour.

Since China is becoming a resource of increasing difficulty, what alternatives are there? 
Even at its worst, China is still the best we’ve got. Bangladesh and India are both dealing with strikes for better wages and conditions and the upshot of those will be price rises. In any case, goods sailing from Bangladesh take much longer to get here than they do from China and quality is continually open to question.

When Zara gets started here and we hurtle in to look at the clobber and turn it inside out to see where it was made, we won’t find China featured. Same goes for Primark, my favourite volume store in the world.

There is another world for clothing manufacture but it is a hell of a long way from Australia.

It radiates out from South America and takes in India. Gildan, probably Australia’s most competitive t-shirt supplier, gets its goods made in Haiti, Honduras and Nicaragua.
While we continue the foxtrot with China maybe we should be looking over our partner’s shoulder at other people on the dance floor and add them to our dance card for a quiet little modern waltz later when the lights are low.

The big O – and it’s not Oprah

The current darling among fashion retailers is Oroton. Financial analysts are singing its praises and recommending it as a better retail share to own than Myer, Harvey Norman or JB Hi-Fi.

Of course there is plenty of evidence to back them up. Sally Macdonald’s leadership as CEO is undeniable – although one must remember that the Lane family, led by the not-really-retired Robert, pull clever levers behind the scenes.

The Oroton brand is currently coming to the fore, followed by Ralph Lauren, while in the distance is the somewhat embarrassing Marcs. By the end of this year Oroton will be the name on 59 out of the company’s 92 stores – 16 of which will be new. 

The analysts are heaping praise on Oroton’s financial controls, cuts to top-heavy office staff, disciplined logistics and many other wholesome outcomes of good management. It makes a perfect business study.

But ...

What these analysts cannot gauge, because they are not trained to do so, is the rightness of the product. They’re looking through only one lens of the binoculars. While I don’t blame them for that, we who are waist deep in the trade, must remember that the product is everything.

You can have the worst little shop, the rudest sales assistants and the most outrageous prices but if your product is right you can’t help but succeed.

The design team at Oroton is a class act