My Unreliable Source (MUS) is claiming victory for predicting that Zara would pitch its tent in the new Westfield centre in Sydney. Well, he did mention that location – among several others.
But we’re at loggerheads again. MUS thinks Zara will revolutionise fashion retailing in Australia and that its clobber will flood out of the store like a tsunami. I think it might at the beginning but after it has settled in to become part of the familiar scenery, and it has been joined by similar competitors, the feeding frenzy will subside.
Moreover, I’m still wondering where its unsold stock goes to make way for the new stuff every three weeks or so. MUS suggested it could be shipped to Asia but how could Zara’s margins stand another load of packing and freight on those rack-tired goods?
In the meantime, MUS tells me that UK -based Allsaints wants a partner like the farmer wants a wife. Allsaints is like Britain’s answer to Zara, with a similar product range and pricing around that of Sportscraft. The styling looks to be edgier than Zara but the company, with only 70 stores worldwide – and most of them in Britain, – does not seem to have the horsepower to venture solo into Australia.
Allsaints began its present incarnation in 1997 with a shop near Carnaby Street. Prior to that it was a wholesaler supplying menswear to some of London’s prestige stores such as Harvey Nichols and Harrods. A year after it went retail it added womenswear and then childrenswear, footwear, costume jewellery and some homewares.
Allsaints will have to be careful not to be mixed up with All Saints Op Shop in Barwon Heads, Victoria. Maybe they could do a deal. The unsaleable stock could go off to Barwon Heads once a month to the namesake shop. But Allsaints may have to re-word some of its website descriptions like:
“A jacket inspired by reworked and deconstructed traditional biker jackets; constructed using goat suede skins with pigment spray and burnishing at seams for a vintage effect. The Damson jacket features zip detail at collar, unlined waterfall detail at lapel and zip pockets. This style is fastened at the waist with tie belt and lined with 100% cotton on the body and viscose twill on the sleeves.”
Commissioned officers
One of my readers has a different take on why big retailers want to do their own styling and importing. Certainly, he agrees that the margins offered by direct buying make accountants smile but, he says, buyers love it far more.
An integral and normal part of the Chinese way of doing business is to embed a buying commission in the price. Thus when a buyer places an order with a factory the first question is, where should the commission be sent?
Will the buyer then (a) march out in a huff; (b) demand the allowance be reflected in a price reduction; or (c) accept that this is normal for Chinese business and graciously accept the benefit?
The point is that this way of doing business is so entrenched, not only in China, but many other parts of Asia and the Middle East, that it seems okay when you’re there. Also (a) can lead to (b) which can eventually become (c).
This way of doing business does not stem from an immoral failing by individual buyers – although it might look that way when they are sprung.
The pressure to accept what is regarded as normal practice is considerable and becomes a counterbalance to the fragility of many big buying jobs where a bad season can be blamed on the buyer and his or her services dispensed with.
The benefits may not go to one buyer, either. A whole buying office might be given the commission to use in whatever way it pleases. Because it is paid openly to a group does that make it okay?
Nowhere was the system more clearly illustrated than in the Australian Wheat Board (AWB) scandal where the seller had to fall in with the practice of offering a commission – or not make a sale.
The media made much of the fact that the commission money was going to Saddam Hussein, who was using it to fight the good guys and implying that, if it had been used for more acceptable purposes, it might have been okay.
When the AWB deals came to light everybody stampeded to the high moral ground so as not to be seen condoning such blatant dishonesty. But, in reality, everybody in that deal and all the shining moralists who tut-tutted about it were simply hypocrites.
If we want to do business with another country, what is the right way of doing it? There are two valid and totally opposed answers to this question.