On a wander through Country Road's state-of-the-art store at Doncaster shopping centre with CEO Ian Moir, Belinda Smart gets a taste of things to come.
Ian Moir is probably not best described as a handbag fondler.
Despite his eminently courteous demeanour, the Country Road chief executive is clearly a tough operator. And, let's face it, he has had to be, as illustrated by the many punning "bump in the road" headlines charting the once iconic retailer's uncomfortable journey over recent years.
Yet there he is, pulling an olive green leather tote from the display at Country Road's Westfield Doncaster store to extol its virtues. There he is, opening fasteners, pointing out the glossy finish - complete with quality stitching and studs - and marvelling at that little figure on the swing tag. A figure which hovers enticingly close to the $200 mark.
"Just look at this. You couldn't get a quality bag like this at this price anywhere else. You'd expect to pay double that," he enthuses.
Of course, Moir is using the bag to make a point: that the "bumpy" patch of Country Road's travels is drawing to a close. It's pulled off what many industry commentators were beginning to doubt - a long term strategy of bringing down prices while upping fashionability and quality to gain market share.
While that sounds doable, Country Road's falling popularity and seemingly inescapable discounting cycle a few years back show it as a manoeuvre with the turning circle of a Sherman tank. What has finally emerged though, after much patient wheel grinding, is a virtual cycle; stronger unit sales leading to bigger manufacturing runs, leading to lower costs, to better margins, to enhanced quality, right back to stronger unit sales.
Amid the current sea of receiverships and profit downgrades, Country Road's recently released results say it all. On February 19 the retailer announced profit before tax of $14.6 million for the first half of fiscal 2009, an increase of 82.4 per cent from $8.0 million last year. Total sales were up 20 per cent, with both stores and department store concessions showing a blooming bill of health.
But if anyone thought this was the moment to take a breather, they'd be under-estimating Moir and his team, who still believe Country Road has a way to go before reaching its full potential. The Country Road of the future, Moir says, will offer destination outlets with all the excitement and variety of a mini department store, albeit in one-brand form. In fact, while Moir acknowledges the growing importance of online shopping, he still believes stores themselves are the most powerful way to connect with shoppers.
"This is the best physical and visual representation of the Country Road brand," he says, indicating the generous proportions ? the frontage is 24 metres wide - of the recently opened Doncaster store. Artfully segmented into basics, event wear, urban fashion, corporatewear, childrenswear, menswear and homewares stories, the store is well lit, merchandised to perfection, and clearly designed to educate shoppers for "zero tolerance" towards wardrobe malfunctions. They are lapping it up, Moir says.
"With this store we've really come out firing on all cylinders. We've exceeded the budget in the middle of a downturn and we're trading number two in the centre, second only to our Chadstone store, which is trading number one."
If Doncaster represents Country Road at its best, Moir's plan is that eventually all stores will be made in its image. Funded from cash flow, the floor space of all outlets will ultimately be expanded by between 30 and 50 per cent. Aside from expansions, the company will also open new stores in handAnd that's not the whole story. New sub-brand Trenery - unveiled in early February - will also open 40 to 50 stores, of which the first batch will open towards the end of this year. Their fit out and design is still on the drawing board, but will probably be differentiated from Country Road's by a more urban aesthetic, servicing customers of a certain age who do most definitely not wish to be reminded that they are 40-plus.
"Before launching Trenery we did a lot of focus groups and it became crystal clear what that demographic does not want. They don't want 'sensible'. They want fashionability, colour, quality and detail but with a better level of comfort and coverage. So we've developed a different block for Trenery with a more relaxed fit. The brand will also be about frequent drops, as newness is very important to this customer."
Like Country Road, Trenery is located at a "sweet spot" of value and quality, which aims to dispel the perils of launching in a recession. If anything, Moir claims, the new brand will further capitalise on economies of scale already in place.
"While we've got a new design and merchandising team for Trenery, we'll be sourcing fabrications from the same mills in Italy and benefiting from existing supply chain efficiencies."
Clearly it's all change at Country Road, with new stores, a new brand, new customer relationship initiatives and even new staff training and leadership programs in place. However, many commentators would agree the "It's true, we did discount a lot in the past and unfortunately the brand still has that perception with people who don't know our business," Moir concedes.
However, while "spend and save" offers will continue to apply to loyal Country Road cardholders, the company has had no discounting other than end-of-season sales for the past 12 months. And while the discounting stigma could take time to shake for more seasoned consumers, the number of new Country Road fans coming on stream gives cause for hope.
"We get 10,000 new customers every month for the Country Road card, the majority of them aged between 25 to 35 years old."
While a rapidly growing customer base undoubtedly heralds a new era of optimism, such a young one also hints at the promise of longevity. Perhaps it's time to dust off Country Road's "iconic" status in preparation for a second airing.