NATIONAL: Dramatic spikes in the cost of fabrications and supporting garment components are forcing fashion houses to re-invent or die.
With recent casualties including fabric and garment specialists DPK Australia and Smouha, the weak Australian dollar and scarcity caused by factory closures in China had caused cost blow-outs of up to 40 per cent on fabric prices since late last year. The result was that many Australian businesses had been forced to review their operations, confirmed Jo Kellock, executive director of the Council of Textile and Fashion Industries of Australia (TFIA).
"We're such a small market and because of that we tend to deal with the factories in China that specialise in small runs. When factories close and there's a supply side contraction, companies here really feel it.
"[Those affected] are reviewing their product mix and building resilience into their business model. The current downturn is really forcing businesses to be more strategic about their supply chain and operations."
Lanette Porritt, head designer at Melbourne-based label Feathers said her company was one of those who had undertaken an operations review.
"Sourcing now involves being more thorough with analysis of previous seasons' sales results and investigating new contacts with regard to securing increased fabric choices."
Feathers was purchasing currency to hedge against price fluctuations and buying bigger quantities of fabric to cater to core customer needs.
Dainy Sawatzky, founder of Melbourne womenswear label Body by Dainy Sawatzky, said although the company was increasingly developing its own fabrics with a local mill, the majority of its base cloths came from Japan or New Zealand, where had price rises had also kicked in. In particular prices for Japanese fabrics had skyrocketed.
"We are definitely trying to be consistent in our retail pricing for our customers so unfortunately our margin has to absorb the difference."
Straitened finances meant the brand had been forced to explore innovative design strategies, Sawatzky added; a view echoed by Sydney womenswear designer Melanie Cutfield.
"We noticed a 40 per cent rise in the cost of fabrications since late last year. That's huge. When you've costed garments at one level and they're coming in at another it can be very damaging to your business. It was the first time I found myself looking at fabrics purely based on price and I realised I had do so something. With a high-end label like Melanie Cutfield, retailers begin to shy away from it in a down turn. Then when you factor in a 40 per cent rise in the cost of making it, it's no longer commercially viable."
Cutfield took the radical decision to merge her diffusion label Muccia, launched last year, with the Melanie Cutfield label. The result, dubbed Muccia by Melanie Cutfield, was currently selling to Cutfield's wholesale clients with "phenomenal" results. The new brand carried price points averaging $380 for an occasion dress as opposed to $600 to $700 for a comparable Melanie Cutfield item.
"It's the best thing I ever did," said the designer. "We've had absolutely amazing sales growth. Previously we had two brands with loads of styles that weren't selling all that well. Now we have one and we're selling loads more, because we're getting it right."
Smart design had helped keep costs low, she said.
"I try to put value into a garment where people expect value. So if customers expect a top to be silk, it's better to keep it silk but to make it really plain and beautifully cut; whereas you can add more detail to a cotton top because it's cost effective to do so."
At the time of writing Cutfield had been selling the Muccia by Melanie Cutfield range for around three weeks.
"In that time we've knocked over the same amount of business as we would previously have done in a season."