Australian designers can be overwhelmed by the finer details of exporting to the USA. Assia Benmedjdoub meets an Aussie expat who’s made it her business to build a bridge between the two markets – and avoid those costly mistakes.
Melissa Trovato’s curriculum vitae was missing one essential element: she was not a man over the age of 40.
But four years ago, Trovato showed enough corporate grunt to convince Jodhi Meares she could take on the role of general manager for Tigerlily. Meares, who founded the swimwear label in 2000, had begun prowling the market for an executive 12 months earlier, searching for someone who had less of an interest in CKs as KPIs.
“Jodhi was after a real corporate type, man over 40,” Trovato recalls. “I received a call from her recruitment agent who thought I’d be perfect for the job. She’d said to Jodhi, ‘just meet her and you’ll change your mind’. I met her and two hours later the agent called me. I’d got the job.”
Trovato was working for distribution giant Hotsprings at the time, managing its branded division, which included labels such as Hello Kitty, Mermaid Sister and Milk and Honey. She had dealt with bringing licensed products from the US market into the Australian market, but her new-found role with Tigerlily would soon flip that on its head.
Back then, close to 50 per cent of Tigerlily’s wholesale business was with national department store Myer. With volume runs on the board and a strong branding strategy in place, Meares was itching to expand into the multi-billion dollar American swimwear sector.
“We were ready to export,” Trovato says. “But just going through that exercise, we realised how overwhelming it could be. Not only did we have to find and pay for showroom and PR representation, we had to build the whole freight component into our pricing model.
“The duties, the taxes, the set-up for international delivery. Say a boutique sells out of a particular style and they want to repeat five units worth. How are you going to ship five units from Australia and make it cost effective?”
The learning curve, however, would emerge long before a single unit hit American shop floors. Major showrooms in New York generally charge between $2000 to $3000 a month for representation, plus commissions of around 15 to 28 per cent on orders. If the showroom operates as a pure sales and distribution business, then designers will need to fork out an additional $3000 to $10,000 for a publicist.
“Throw in the fact there’s a lot of showrooms out there who take the cookie cutter approach to selling,” Trovato adds. “A showroom in the US is kind of like a factory; they don’t even use the terminology of brands, they call them lines.
So the collections are literally lined up ready for viewing.
“Unfortunately, if you’re in a really established showroom with a high commission structure, the agents are going to sell the big labels first and leave you as an afterthought. Do you go with the big guys for their traffic flow or the smaller, passionate people who have less contacts?”
Trovato opted for the former – and describes the decision as “a bit of a failure actually”.
“They sold us the dream, we got the nightmare,” she sighs, shaking her head. “They were supposed to put us in the [largest swimwear trade event in the world] SwimShow, Miami. When we flew over to the show from Australia, we saw the Tigerlily booth was empty. The agent was busy selling her other major brands. In five days, I didn’t have a five- minute conversation with her. She didn’t want to know us.”
It got worse when Trovato took the situation into her own hands, setting up a meeting with the swimwear buyer at department store Saks.
“My agent came along and I saw there were other people with her. As soon as the Saks buyer walked in the door, they all pounced. I didn’t know who they were, I assumed they were other buyers. It was the most embarrassing moment of my career when I realised she had brought her clients along to capitalise on my meeting. I realised then, I couldn’t trust anyone. If I wanted the job done right, I needed to do it myself.”
As Tigerlily’s stockist list goes on to show, the brand was eventually picked up by Saks. “We got it in the first season – I think we might have won some sympathy votes, there,” Trovato laughs.
Needless to say, soon after the incident Tigerlily brought international distribution and PR back in-house. While this worked over the short term, Trovato believes it is an ultimately unsustainable strategy.
“The US is a massively competitive market; you need to be loud and on the ground. Something had to give. We either had to invest in our own people or put systems in place. At that point, we sold Tigerlily.”
‘That point’ came in 2007 when the brand was acquired by surfwear giant Billabong. Under the safety of its enormous global distribution network, Tigerlily’s future in the American market was all but guaranteed. Trovato, meanwhile, was hungry for the chase.
Following Tigerlily’s acquisition, she approached Australian swimwear label Jets for the position of business development manager in North America. Jets’ parent company, Allen Fashion Group (AFG), contracted Trovato for a two-year period, but her ambition to branch out must have taken over, with the young entrepreneur leaving seventh months before the agreed end date.
AFG general manager Rob Schonberger says her role involved trade sales only.
“Melissa’s time working with the Jets brand was transactional and did not extend to staff management, marketing or public relations,” he says. “It was purely sales orientated and restricted to North America.”
Trovato was compelled to set up her own company, Melt Management, a sales, PR, marketing and business development firm representing Australian designers in the US. Based in New York, Melt currently represents 11 local brands including Seventh Wonderland, Valerie Tolosa, T.L Wood and accessories label Emmanuele. Trovato employs two American staff members and an intern.
“Even though we manage local brands, we’re not gimmicky,” she says. “We don’t greet buyers or media with a ‘g’day mate’. It’s more about having a point of difference, about giving buyers and media something new and attractive that they can’t get from established brands from the US or Europe.”
The standard rate for Melt representation is $5000 a month and includes PR, sales, distribution and business services. Trovato slashed this by 30 per cent during a recent business trip to Rosemount Australian Fashion Week in a bid to add five more designers to her portfolio. She’s keen to sign up brands such as Marnie Skillings, Dhini, Ellery and Miss Unkon as well as mid-market labels Nookie and Bec n Bridge.
Upmarket labels will often take longer to build a presence while brands such as Tolosa, which can hit that US$200 “sweet spot”, fly off the rack.
Tolosa herself says she is impressed with the service so far. At the time of press, her label had been with Melt for just one month, but already secured sales and PR opportunities along the east coast. She says the firm locked in orders with all 21 W Hotel boutiques in the region.
“If all things go according to plan, spring/summer 2011 will be a huge season for [me],” Tolosa says. “Vogue Latin America, British Elle, French Glamour and Gala & Lush have already picked up styles from my trans-seasonal range to shoot.”
Meanwhile, local swimwear label Seventh Wonderland has been working with Trovato over the past 10 months. Head designer Carlos Aviles says the biggest coup for the label had, surprisingly, come outside of the American market.
“Thanks to Mel’s contacts, we have managed to secure powerhouse department store Lane Crawford in Hong Kong. We are only one of three Australian labels to be featured, which is an incredible accomplishment for Seventh Wonderland in only two seasons of trading.”
Trovato believes these contacts are integral to her success, and she works closely with major department stores such as Saks and Bloomingdales, as well as cult US independents Scoop, BigDrop and Inventory. While she admits the recession has constrained buyer budgets in the US, she advises designers to stay well away from basics.
“They’re not coming to us for basics – they already do that very well in their own marketplace. We had one particular brand, an amazing label based in Melbourne, which specialised in luxury basics.
“But they were competing with brands like Theory which have, number one: an advertising budget and two: been in the marketplace for a long time. People are not buying an Australian knitted hoodie for $500. There needs to be a perception of value.”
One element which does work in her favour is seasonal differences between the two markets. While in-season repeats can be a potential nightmare, it works perfectly on the initial sales front, Trovato says.
“How we work is that Australia from the US is six months ahead. So right now, Australian designers are releasing their spring/summer collections and we show that in August or September.
“The great thing is, we can use Australia as a bit of a testing ground and weed out any of the weaker styles, coming in with a strong, concise collection for American buyers. It’s all about making that distance work to our advantage.”