On August 2 this year, adventure apparel and outdoor equipment retailer Kathmandu reported a 55 per cent lift in profit and a 24.5 per cent increase in sales for the 2011 financial year.
In the current tough trading environment, the double digit result represented a coup for the veteran brand, and a sign to all others that whatever business strategy the company had employed was working. A month later, the 97-year-old brand announced it would be implementing a total refresh, which would see its original logo scrapped, ‘new look’ stores launched and existing stores refurbished to reflect a new brand image.
In light of the company’s strong performance, many may have perceived the move as a brand messing with the goose that laid the golden egg but, according to Kathmandu general manager of business development & sustainability Paul Stern, it’s exactly the opposite.
“It’s important in these times to not just think short-term, but to be strategic as well,” he says. “The value of your brand is incredibly important, and for Kathmandu in particular the equity in our brand is the company’s most valuable asset. Precisely because of this, it’s important that we protect, develop and enhance the brand – and that was the initial thinking behind the refresh. We did a fair bit of research and what we found was that we are all about inspiring adventure and our 97-year-old brand needed to move with the times and align with the product and our stores.”
The key word, Stern says, is innovation.
“The answer is obvious. You’ve got to constantly review and adapt your business strategy, not only to your customers but also to the changing market,” he says. “By the same token, I don’t think you can ignore the past and your brand’s history – you can’t water your brand or your business down. But overall, absolutely, you’ve got to be dynamic and continually refresh your approach.”
For other retailers, it’s about emphasising better performing categories. In this edition, Roberto Pierucci told Ragtrader he has made the decision to cease production of his eponymous womenswear line and shut down his retail outlets, in favour of investing in wholesale menswear.
“I think 28 years is a good innings. All womenswear was manufactured by us in Australia and requires the greatest amount of input both mentally, creatively, and physically – and we felt we pushed it as far as we could without further huge capital investment,” he says.
“However, we will be continuing with our menswear line and adding some extra bits to it. I think you’re better off in this business being based outside of Australia at this point in time, and all our menswear is made offshore – Italy, New Zealand, Portugal, and Thailand.”
For womenswear wholesaler Cooper St, staying profitable has meant more of a change in business structure. The brand has closed its only flagship store in Bondi, Sydney,
following an 18-month occupancy. Managing director Craig Cooper says it has now consolidated into an online-only operation.
“Certainly the shopfront was useful in furthering Cooper St awareness, but it could by no means have as broad a reach as the net,” he says. “We found that the store became more of a vehicle for fulfilling interstate and international sales rather than the usual ‘over the counter’ purchase and this forced us to consider why would we continue to maintain a shop front. Our online presence just outgrew the potential first thought of opening a Cooper St flagship store, so we were purely reacting to a change in market demand and the way our customers make their purchase.”
Back in June, boutique footwear supplier Paul Waddy also noticed a shift in the market, but rather than downsize, he chose to combine his brands and expand. His women’s shoe line Sanna, which he co-founded with Raimonda Sanna, now trades under his leading men’s footwear business Antoine + Stanley, and the merger has given his business a stronger base from which to grow.
“From a business point of view it made sense to market one label rather than two, it gave us one focus, and reduced our marketing spend considerably, as well as saving time and money on things like social media upkeep for two brands. But we wanted to capitalise on the increasing popularity of Antoine + Stanley, and expand into women’s footwear and accessories – merging Sanna with Antoine + Stanley gave us the perfect foundation for that.
“The changing face of fashion and retail was also an influencing factor. Brands need to think outside the box in this difficult environment - you can’t afford to wait around for business to come to you, you need to actively pursue new avenues for growth.”
Stern of Kathmandu agrees and adds that the recent spate of well-known fashion brand collapses proves it’s no longer enough to rely on tried-and-tested modus operandi.
“When you are doing well it’s easy not to change anything, but if you want to continue to do well in this market you have to keep thinking ahead and be progressive,” he says. “One of the first lessons I learnt in business is that change is the one constant you can rely on. You never know what’s around the corner, so we won’t be sitting back.”
