When Ugly means cool
After almost a decade in the business, Ugly Tribe has learned a thing or two about nurturing brands. Belinda Smart talks to the Melbourne distributor that is poised to conquer the world.
Navigating the back streets of Richmond a stone's throw from Melbourne's Bridge Road discount retail strip, it's unnervingly easy to miss Ugly Tribe's headquarters; in fact I pass the building's unassuming signage twice before realising I've arrived.
Appearances can be deceptive however. Once inside the building, there's no mistaking where I am; a labyrinthine collection of production and design studios and showrooms - swathed by colourful arrays of branded apparel - reveal the company as a powerhouse of creative energy, with directors and co-owners Ed Silberman and Tim O'Brien at its helm.
Like many success stories, Ugly Tribe began with a chance encounter. The year was 1997 and the brand was mega US streetwear brand FUBU, confirms O'Brien, now managing director.
Back then the native New Yorker had just retired from playing professional basketball in the US and was visiting this country as part of a government program to promote healthy lifestyles to Australian youth.
"Myself and another athlete Dwayne Cross met with Ed [Silberman], an experienced Australian fashion manufacturer, to design some apparel for the program. Ed had some family in Manhattan too and one toThe result - something of a coup for an untried company - was an exclusive contract to distribute FUBU in Australasia; but as the choice of company name illustrates, FUBU was just the beginning.
"We always held a strong belief that we would build a fashion distribution house that represented a variety of labels, or our 'tribe' of brands. The 'ugly' prefix simply came out of some street slang being used at the time in New York City. Having grown up there, I always enjoyed the way certain adjectives were used in contradiction. When something was described as 'ugly' it was actually meant as a synonym for 'very cool'."
That being so, the term could undoubtedly be used describe the company's progress. With an annual turnover of between $5 million and $10 million and around 15 per cent sales growth year-on-year, the balance sheet looks indisputably "ugly".
The careful nurturing and creative flair it brings to both licensed and proprietary properties could well be the performance enhancers behind Ugly's steady success, but the diversity of its interests also plays a part.
Indeed, to call it a wholesaler is to sell it absurdly short. The business has fingers in many pies, including design, manufacturing and the import and export of high volume, youth-focussed fashion apparel.
Its suite of mid to premium market brands caters to a core 12 to 35 age group as well as children and infants. It also owns an interest in M3 (Merchandising Marketing Management Corporation) which distributes US brands Hudson Jeans, Heatherette, Artful Dodger and Imitation of Christ.
Its labels - collectively distributed across a network of around 400 stockists - include; FUBU, FUBU AFL - an exclusive tie-in with the Australian Football League and the only brand in the world with the license to create supporter wear for all 16 AFL clubs; and a proprietary AFL fashion line dubbed First 18, which O'Brien describes as "fashionable, trendy and contemporary apparel inspired by the logos and graphics of each club's heritage".
Proprietary street brands DGAF and REBIRTH make up the company's full offering; but it's the standout performance of the latter - REBIRTH has reported 30 per cent year on year domestic distribution growth since its creation in 2002 - that signals a fresh era of expansion for the company, with the brand recently inking a major US distribution deal.
In doing so, it bucked a time-honoured trend, says O'Brien.
"While a lot of US brands make it big in Australia, it's much rarer to see the reverse although there are notable exceptions to this rule, not least renowned surfwear brand Billabong, whose story serves as inspiration.
"Billabong is so big in the US that most of those kids that wear it there actually think it's a US brand. It has also expanded beyond surfwear. There are no surf beaches in Manhattan but people still want to wear the brand."
While it would be premature to compare REBIRTH to Billabong, the potential of the deal - clinched in March - cannot be underestimated.
"For the Australian business it's a real door opening for us. If you can break into the US market it's only matter of time before you reach Europe and the rest of the world.
"Australian retail is near saturation, so we're limited in this country by population constraints. In the US the population is near 300 million, and the brand is going into 7000 stores so the possibilities there are huge."
With the US market in REBIRTH's clutches, it's tempting to wonder about the possibilities of expansion into the world's greatest untapped market.
"Of course China is a huge market, but for the moment everyone seems to be adopting the 'wait and see' approach. Chinese youth are more pro-Western and affluent than they have ever been, so it's really a matter of getting in at the right time."
And timing, in O'Brien's experience, is crucial.
"The majority of brands fall by the wayside. You've got to have the courage to maintain direction. If you start changing the brand according to what's dictated by the market the brand becomes too confusing.
"A brand has to have a story and pay its due. It's got to be able to grow up and mature."