Parsons under Penfold
Ian Penfold was appointed managing director of Charles Parson & Co in February of this year. Now, after six months, his management style is established and his goals for the company are clearly defined. Under him, Parsons is changing shape, writes Fraser McEwing.
From an apparel textile and clothing perspective, Parsons has found the going increasingly tough over the past five years. Losses from the failure of big companies like Table Eight and Discovery, the rapidly shrinking demand for locally delivered apparel textiles as Australian garment manufacturing falls to imports, the pain of setting up in China: they've all sucked life out of Parsons' formerly unshakeable prosperity. On top of that there have been deeply felt management changes, all bringing uncertainty to the future of Australia's biggest wholesaler of textiles and textile products.
Into this world of a highly respected but faltering family business set in a storm of rapid change stepped Ian Penfold with the reassuring words "I love a challenge".
Penfold's longest stint with a fashion company was with Speedo, where he worked for 10 years and finished as chairman and managing director. He's also spent time in the jeans business, with Blue Bell Wrangler in South Africa (he was born in Zimbabwe)and Smiths Clothing in Australia.
One of Penfold's obvious instincts is to get the structure right. When he arrived at Parsons he found "a unique family business that needed to embrace change. It had a very strong balance sheet and some outstanding potential but it lacked focus. The various businesses were operating under too many roofs."
The history of Charles Parsons explains how this came to be. The policy of the family, particularly in the last 20 years, has been to grow by acquisition. Never keen to be a stand alone manufacturer, although occasionally willing to be a part owner, Parsons concentrated on buying textile product companies with strong brands and distribution. It also liked to service its various markets from its own warehouses in every state and New Zealand. While this worked nicely during expansionary times, it has taken on the appearance of a collection of struggling outposts in the currently contracting market.
"Are 13 warehouses really necessary?" Penfold asks, and then follows up with a comment on the efficiency of interstate freight. So some rationalisation there is indicated, with inventory becoming more centralised and the de-duplication of some warehouse services to provide savings.
Penfold has applied the same test to each of the product categories that go to make up the Parsons group. Each of them has been made up of autonomous subsections which Penfold is now in the process of merging.
The apparel division, being the one that has most to do with fashion textiles and garments, is undergoing extensive renovation. Long serving Parsons executive, Graham Taylor, now oversees fashion fabrics, lace, garments, patchwork, and corporate apparel. At the fashion fabric level is the fire-brand creative team of Craig Ruby, and Charmagne Mewing. They've been given free reign to add a haute couture fabric layer to the traditionally safe fashion ranges that Parsons has been known for. Penfold is well aware that there are dangers in flights of fancy fabrics, but also acknowledges they are an essential ingredient of the eclectic textile mix. He counsels his people to push suppliers for lower minimums and to pre-sell the exotics. There are nice margins on the sales side but free fall losses if you have to job the leftovers.
The apparel division is also where Parsons' Chinese garment sourcing business slots in, although it will be heading for broader horizons next year. Under the local marketing management of Anthony Whitaker and with Phil Bailey as general manager of Charles Parsons
China in Shanghai, the theory of providing garments to Australian label wholesalers is still abundantly correct - but the execution has been hazardous.
Initially Parsons had a strict policy to service only label wholesalers. Now it will deal cautiously with retailers which are not accessible to its wholesale customers.
Penfold neatly sums up the mission: "Parsons used be farmers. Now we're becoming hunters."
This philosophy applies to all six divisions of the company as they become more consolidated, more proactive, and de-emphasise the names of the divisional parts in favour of the 'one Charles Parsons' whole. Penfold's vision is one of the company cells sharpening the assault on their individual markets but working as one within the company's walls. Thus ideas from, say, apparel textiles, might find their way into furnishings, based on the way fashion runs a common thread through many types of products.
In addition to the apparel division there is furnishing (merging domestic, commercial and upholstery), trimmings/knitting (combining bandings, bunting, backing, sporting and shade cloth) homewares (merging the management of Private Collection, Gainsborough and Partex, although retaining the separate brands), and Rapee cushions. New Zealand is regarded as another division, but it contains similar product categories to Australia.
As if Parsons' Australian restructure were not enough, Penfold is also tackling the immense challenge that setting up in China has presented to the company. By the end of this year Parsons will have gained the rare status of being a wholly foreign owned entity (WFOE) in China. This means it will be allowed to trade as a Chinese company would. It will be possible to sell goods into the gigantic Chinese market as well as supply from China to the rest of the world over a very wide range of textile related products. Penfold believes this will provide a massive expansion opportunity for Parsons and establish it as truly international.
Currently the Chinese office employs 22 people. This will grow when WFOE is confirmed and necessitate another change of address.
"If we're going to become an international trader we have to look the part," Penfold says. "With WFOE status we will have a greater choice of location and pay the much lower local company rental rates."
While Ian Penfold has found the challenge he wanted, it appears that Charles Parsons has found the leader it needed.