A break away from traditional pricing strategies in the wake of changing consumer sentiment appears to be paying big dividends for Australia's emerging fashion brands.
The founders labels Minty Meets Munt, Magdalena Velevska and online retail brand Frockaholics.com.au have each credited conservative pricing structures for their survival after attempting to grow market share amid some of the toughest economic conditions ever faced by the sector.
The findings come on the heels of observations made by WGSN editorial director Juliet Warkentin who warned the current economic crisis would change the retail landscape forever. The musings were reinforced by a consumer survey undertaken by US group Jupiter Research that found even when prosperity returns, 61 percent of shoppers would continue to spend less than they did before.
Speaking during Fashion Group International's trend briefing last month, Velevska said she had adopted a strategy which kept her margins as tight as possible.
Velevska, who retails her Australian-made womenswear collection for between $300 and $700, said since launching in December she had already secured 15 accounts - including two international - and staged her own show at Rosemount Australian Fashion Week.
"As scary as it was I thought 'okay, I'm going to go in with a strategy. I'm going to produce a really good product, go in with a really high quality and I'm going to keep my margins really tight and my price points really focussed on getting that really good sell through'. And that's what people have picked on," she said.
Minty Meets Munt founder Kevin O'Shea said his label's price points, which averaged around $80 for summer stock and $90 for winter, had been modelled on high street chain Topshop.
O'Shea said his brand, which launched in December 2007 and had 100 wholesale accounts including retail chain Sportsgirl, had started debt free and would likely remain that way. "All our money goes back into the business. It's really important we remain debt free with steady access to cash flow."
Frockaholics founder Sarah Pavillard said her brand, which launched last August, worked to industry standard margins and its product was priced at the brand's recommended retail price (RRP).
Adding extra margin over and above the RRP was likely to price it out of the market as consumers were able to research a garment's price through multiple avenues online, she said.
"In terms of emerging brands, we would really like to see some extra margin for the retailer factored into their RRP - that extra margin, and a garment that represents great value for money. . .[is] key determinants in the process of deciding which brands to stock. All things being equal, that extra margin can make the difference between whether or not we stock a label."