It’s been a busy year for the Australian fashion industry. Assia Benmedjdoub selects 15 moments which shocked or rocked the textile, clothing and footwear sector.
1. New government: new package
The Federal Government promises $401 million to the textile, clothing and footwear sector (TCF) over the 2009/10 to 2015/16 period. Announced as part of the 2009 Federal budget, the package is designed to “support” industry through to 2015, when the general tariff rate for the sector falls to a flat five per cent. To the relief of many fledgling fashion brands, $2.5 million per year for five years is locked in to retain the TCF Small Business Program. The program provides grants of up to $50,000 for small fashion businesses, or those with an annual turnover under $2 million. Sizing campaigners were disappointed the $5 million recommended for a national sizing standard survey didn’t make the cut.
2. Smouha leads GFC body count
Fashion designers, retailers and students were left reeling by the collapse of trade giant Smouha Fabrics. Director Philip Smouha, who also owned and operated industry supplier Hills Textiles, placed both companies into administration in March, owing St George Bank a reported $26 million. In a bid to save the company, Smouha sold his Bellevue Hill (Sydney) property for $17 million but the last-minute capital injection failed to secure its future. Fashion businesses owed him close to $4 million, with womenswear label sass & bide clocking in a $500,000 debt. Students at the TAFE NSW Fashion Design Studio also lost out, having a $6,000 award sponsorship fall through in the wake of Smouha’s collapse.
3. Pacific Brands blinded by backlash
Firefighters stripped to their knickers in pouring rain, dedicated Facebook pages rallied for a consumer boycott, local councils vowed to look for new uniform suppliers. Pacific Brands’ decision to axe 1850 jobs in the wake of a $150 million half-year loss proved hell hath no fury like an Aussie worker scorned. In February, the company behind iconic labels such as Bonds, Berlei and King Gee shocked the nation by announcing the closure of seven factories across Australia as it moved to manufacture its garments offshore. Despite helping workers access retraining over and above their entitlements, outrage over its shift to China continued to dominate headlines in ensuing months.
4. Tweet tweet, tweet tweet.
From the Council of Textile & Fashion Industries of Australia to Melbourne’s GPO complex, a swarm of industry players signed on to Twitter this year. In addition to Facebook, YouTube and MySpace, the social networking platform proved invaluable in communicating to a new generation of consumers. Sportsgirl led the charge with its award-winning website, creating an online community where consumers can interact via forums, blogs, vlogs, vox pops, polls and social networking pages. Twitter also seduced delegates at Rosemount Australian Fashion Week, with bloggers and journalists “tweeting” frantically from their BlackBerrys at every show.
5. Myer goes public
Iconic Australian department store Myer made its debut on the stockmarket last month, following a rosy $2.2 billion initial public offering. The thorns appeared on the day of debut however, with shares hitting the screens at $3.88, a notable decline from the $4.10 issue price. Several leading business analysts suggested the initial float was overpriced and opportunistic, following a sharp but “temporary” surge in the market. Some 581 million shares were issued in total, with around half of these secured by retail investors and employees. Private equity groups TPG and Blum Capital, who owned Myer prior to its listing, sold off all interest in the company.
6. Dude, have you seen my $16 mil?
Listed fashion retailer Specialty Fashion Group – which operates womenswear chains Katies, Miller’s Fashion Club and Crossroads – was rocked by a $16.6 million internal fraud case. Former head of property Simon Feldman allegedly siphoned funds from the company over a five-year period, invoicing it for store renovations and refurbishments that never took place. It was alleged Feldman used a majority of the cash to finance a small string of private businesses, including a document storage company and a plant which produces matting for children’s playgrounds. The group received $5 million from its insurers in relation to the fraud and vowed to review its formalised risk management systems.
7. Ian Moir bids au revoir!
Country Road chief executive Ian Moir will bid farewell to the high street chain at the end of this month, assuming the role of retail managing director and CEO-elect of its majority shareholder Woolworths Holdings Limited. Moir will leave on a career high, with Country Road posting a full-year sales growth of 18.4 per cent to $343.1 million and net profit growth of 60.4 per cent to $15.6 million for fiscal 2009. Country Road also introduced its mature sister Trenery to the market this year, initially trialling it across three Australian stores in September and 16 sites in South Africa during August. When Moir first took on his role at Country Road six years ago, receivership rumours were rife as the company battled mounting debts, broke banking covenants, grappled with high operating costs and continued to lose high street market share.
8. Melbourne: the new luxury capital
Department store giants Myer and David Jones both pitched their Bourke Street flagship stores as “world class”, with the latter revealing two new designer wings dedicated to luxury footwear and accessories just last month. Shopping complex Chadstone joined the privileged chorus on November 18, unveiling 12 new designer stores as part of a luxury precinct including Chanel, Louis Vuitton, Prada, Miu Miu and Jimmy Choo. Not to be outdone, Melbourne’s Crown complex offered its existing stores Prada and Burberry a new friend with the launch of a two-storey Versace store (also in November) and promised further upmarket offerings for the new year. Hungry for haute glory, Vuitton’s own dedicated Crown store is currently undergoing a major redevelopment.
9. Moss & Mercury madness
After consecutive financial year losses and the collapse of a major investment deal with apparel company Biron, Mercury Brands slumped into administration during the second half of calender 2009. In October, Australian Horizons Trading chief executive and respected industry veteran Jeff Moss came to the rescue. While Moss declined to reveal the amount he paid to acquire Mercury Brands, he said the lure of its labels, such as Rochford Australia, Purr, French Kitty and No Fear, proved too tempting to resist. Moss staged a powerful comeback to the market this year, acquiring Australian Horizons in August and Funtastic Footwear in June. He established Pretty Girl Fashion Group in 1989, Tigerlily Swimwear in 1999 and was the previous owner of Rockmans, Wombat and Table Eight.
10. Cotton On armed and ready
Fast fashion retailer Cotton On Group continued its aggressive bid to operate 2016 stores by 2016, first taking over the leases of 25 collapsed Shoobiz stores in February, then expanding into key Asian markets such as Malaysia and China before restructuring its ‘Factorie’ branded stores to better compete with rival Jay Jays. It encountered its fair share of scandal however, having been ordered to fork out close to $300,000 in a copyright spat with clothing brand Elwood. It also earned the wrath of mothers with a range of baby clothes featuring slogans such as ‘I’m a tits man’, ‘I’m living proof my mum is easy’ and ‘The condom broke’.
11. Shhh, it’s an E-cret
A swag of online operators entered the market in an attempt to capitalise on the industry’s inventory woes. Websites such as estile.com, brandsexclusive.com.au and cocolee.com.au took a cue from international players and ramped up the presence of private designer shopping destinations in Australia, giving members access to branded goods at sample sale prices. More established providers such as ozsale.com.au saw demand soar as the likes of Alex Perry, One Teaspoon, DKNY, Prada and Ksubi moved to clear old season stock at up to 70 per cent off the recommended retail price. Most online operators take a small percentage of sales and organise the listing, purchase and delivery of goods over a limited period of time.
12. Foot fetish fizzles
The heels might’ve gotten higher, but tough trading conditions saw many branded footwear players fall this year. In January, shoe empire Figgins Group announced the closure of 43 Shoobiz stores across Australia and the end of its upmarket Evelyn Miles business. The embattled Australian arm of international footwear brand Steve Madden was also wound up in late August, after administrators were unable to attract a buyer for its string of nine stand-alone stores, eight clearance sites and 18 Myer concessions. Wholesale and retail giant Pacific Brands joined in on the blood bath, axeing a number of footwear brands from its portfolio (including Pierre Fontaine) as part of a radical restructure.
13. A new Romance is Born
Haute couture label and media favourite Romance Was Born (RWB) found its commercial feet this year, without sacrificing its artistic integrity. Launched by designers Anna Plunkett and Luke Sales in 2005, the label’s creations prompt fashion journos to use words like “enchantingly beautiful”, “better than Disney” and “enthralling”. The brand’s wearable spring/summer 2009/10 collection – which included high-waisted polka dot shorts paired with a matching bow blouse – scored an unprecedented five-page spread in Vogue Australia and strong buyer interest. In March, high street player Sportgirl released a collaborative range with Plunkett and Sales through selected Australian stores and a limited edition footwear venture with www.mycatwalk.com.au put even more coin in their pocket. The pair capped off a stellar year when they won a $10,000 cash prize and mentorship program through the 2009 Qantas Spirit Of Youth Award.
14. Denim downturn
Brands such as sass & bide, Bettina Liano, Ksubi, Nobody and 18th Amendment have helped position Australia as a destination for premium designer denim. However, even this category wasn’t immune from the clutches of the global economic crisis. In July, Ragtrader revealed that a collapse in export revenue forced 18th Amendment to halt production for the coming season. Diesel Australia underwent the biggest shake up in its 20-year corporate history a month earlier, reducing price points for its spring/summer 2009 selling season by 10 to 15 per cent and later 20 per cent or more for spring/summer 2010. Last month, Ksubi’s first diffusion range for department store David Jones hit shop floors across Australia.
15. Topshop tests the waters
Vincent Wu speculated that Topshop was ready to dance with the Australian market when it signed an exclusive agreement with his mixed-designer boutique Incu. After 18 months of preparations, Wu and his brother Brian launched a dedicated ‘Incu Presents Topshop’ concept store above their Paddington (Sydney) site in October. The store has seen large, monthly deliveries arrive from Topshop HQ in London, with prices on par with those offered through www.topshop.com. Wu told Ragtrader that weekly sales reports to its parent company Arcadia Group were part of the exclusive deal. “We are ‘intelligence gathering’ for them,” he said, adding Incu had no plans to expand the concept beyond its Paddington store.