Last year, Sarah and Jeff Figgins watched as the third generation Figgins footwear group shattered into liquidation. But in a climate still vulnerable to major corporate topples, Sarah is proof that the end of an empire does not spell the end of a ragtrader.
When the global financial crisis began seeping through the doors of Melbourne-based Figgins Group over 2008/09, managing director Jeff Figgins knew that much like other traders in the sector, he would need to revisit supplier terms. The third generation family business harked back to the gold rush days, but as liquidation papers for the company would later show, the financial crisis, coupled with structural challenges in the retail sector, would strip it of working capital and leave it with multi-million dollar creditor welts.
Sarah Figgins, partner of Jeff and a former buyer at the group, says that as the last residues of a wind up continue, there are lessons for the broader sector.
“When of all that hit and we were experiencing tough times, we were operating around 192 outlets across the country,” she explains. “We employed an independent agency to come into our business to see what relief we could get from those stores. Out of 192, only one came back to us and said we’ll help you through these difficult times.
“It just squeezes the life out of the boutique retailers and you see it when you go to the shopping centres of key shopping strips. The independent retailer is being forced out of the game by landlords and there is no rent relief; it just keeps going up with your annual increase. The model doesn’t work. By the time you pay that rent and the wages, it’s not enough to sustain you, certainly not through a crisis.”
Data from business information firm IBISWorld reveals revenue at the group plunged by 33.5 per cent over 2008/09 to $94.5 million, with employee numbers also diving from 832 staff three years prior to 200. Figgins is honest about the toll it took on the iconic footwear family, which operated ShooBiz, Mollini, Scooter, Evelyn Miles and Midas, and dates its footwear history to the Australian Gold Rush in the 1800s.
“There’s a loss that you experience with the whole history of Figgins. Jeff is still experiencing the whole winding up of that company but it’s really the nuts and bolts. The staff were looked after and everything has been finalised, it’s just the creditors and unsecured creditors he’s still gelling with.”
While her husband has taken a sabbatical from the sector, his wife has been steadily building the foundations of online footwear store www.shoesales.com.au with former Figgins IT executive Steve Zed. The entrepreneur retained the ShooBiz and Evelyn Miles brands when she launched the site in November, also adding exclusive labels Miss S and Raspini to entice online shoppers. ShooBiz and Miss S represent the volume of the business with prices ranging from $49.95 to $148 and most styles featuring leather lining and padded in-soles. A capsule bridal component will be launched in coming months under the Evelyn Miles tag, featuring around 20 styles featuring imported Swarovski crystals.
“A lot of online websites are pushing discounted brands that are left over stock from bricks-and-mortar stores,” Figgins says. “There wasn’t really a fashion forward, affordable online retailer offering exclusive brands and designs and that’s where we came up with the concept. We release new styles every two months and we’re in line with the northern hemisphere. The online shopper is savvy and she’s not prepared to wait for styles she sees on the red carpet or on celebrities so we launch at the same time as Europe. We’ll be releasing winter in October.”
Up to 40 new styles are released with each delivery and Figgins is quick to replenish key sellers and introduce new colourways. The company, which currently employs around 10 people, still works with the same Chinese manufacturers its second generation operators struck a deal with 22 years ago.
“It’s an exclusive arrangement I have and goes back to a handshake with Don Figgins 23 years ago at a Las Vegas shoe fair,” she recounts. “Working with that one factory, you know the quality and fit is going to be consistent, and they have a great knowledge on trimming suppliers and markets. We can afford to offer fashion forward pieces because our online model doesn’t factor in rent, landlords and other brick-and-mortar costs.”
Figgins stresses the importance of free shipping and returns in retaining customers, believing that online customers have now come to expect it as a form of service. In addition to a 24hr online help desk and 1300 number, the company also issues weekly EDMs and wardrobe guides for pairing shoes with garments. A targeted television advertising campaign has been introduced in recent months, hitting Melbourne and Sydney on occasion but focussing on regional areas.
