Denny sort of agrees
Partly confirming my plea for much bigger boutique markups, once-was-agent and now manufacturer, Denny Collins, believes boutiques need at least 120 per cent just to survive, and more if they want to live closer to the manner they deserve.
He also agrees that boutiques should avoid running the same garments as department stores and other majors who lurch from one sale to the next. He speaks from experience, since he and partner Victoria have a combination of four boutiques and three wholesale labels.
On the label side, they've dropped the long established Victoria Cooper label; too many samples, too much fuss. Instead they're concentrating on Cooper Sport and Cooper Jeans. They expected to sell 2000 pairs of jeans this season but instead they sold 12,000 at $32 wholesale, giving a suggested retail of $85. (I would have liked $99.)
They're closing their stores in Mosman and Mona Vale, declaring them unprofitable locations. On the other hand they love their stores in Double Bay and Canberra and will hang in.
Having said all that, I'm sure I could find boutique owners who would say exactly the opposite. It is all about being in sync with your customer in a specific location, a bit like finding a radio station with a cat's whisker on an old crystal set. Plenty of people moon over Mosman but can't crack Canberra.
Pssst. . .FIS!
Prompted by the hike in petrol costs, many clothing companies are now offsetting their growing freight bills by putting a crimp in the former 'free into store' (FIS) price. This is being done in various ways. The most unpopular is to add a freight percentage to every item shipped. The most popular way, of course, is to pretend freight increases haven't happened and continue to deliver unadulterated FIS. The middle road seems to be to add a flat fee of, say, $10 per delivery, which encourages retailers to place larger orders and discourages tiddlers.
Right now, in the transition period, some retailers are being charged freight but haven't woken up to it and are unconsciously paying. When their hair eventually stands on end after their accountant has pointed out the freight charge, trying to get the freight back will be like pulling teeth without laughing gas.
The answer is to be upfront about it. At wholesale level the formula should be garment cost plus freight 'recovery' (a gentle word which indicates no benefit to the supplier) while, at retail, freight should be added and included in the price.
The principle here is that a retail store is placed in the most convenient location for the consumer - who should pay any additional costs for the goods to arrive at that location.
Tale of two jeans
Shame on me. When I threw out all my button-down collar shirts in a stupid fit of integrity I found my half-empty winter wardrobe did not contain a pair of jeans. To remedy this I took myself to Westfield Bondi Junction, ready for an upper-moderate spend, being conscious that the Australian fashion industry would expect me to represent it with exemplary personal clobber.
Feraud, it turned out, was on sale. There was an indigo blue pair of jeans that had been battered down to $199. The ones that fitted me better, however, were in a lighter weight, more subdued blue cotton fabric, and reduced to a still-gulping $335 plus $25 to have the daddy-long-legs legs shortened. I liked them but it wasn't worth having my artificial hip repossessed to own them. Maybe I could sell the piano. I was on the verge of a panic attack when I decided to take a look in Target, just for a laugh mind you, to see what the poor people bought.
Target had a pair of Bluegrass indigo jeans, in virtually the same denim as the $199 Feraud. They fitted my slipping girth better than Feraud and came in the new stumpy leg version which meant no alteration.
Target was also on sale and I was looking at this pair of Bluegrass jeans for $19.95.
Now I'd rather have Feraud displayed on my bum than Bluegrass, no doubt about it, but my Scrooge implant propelled me plus jeans towards the Target checkout as I dreamed of ways of acquiring a fancy Feraud metal label I could glue over the Bluegrass leather patch.
I'm not making this shnorer confession for any other reason than to emphasise the value of brand. In this case, the Feraud brand was worth nine times the Bluegrass brand for near as damnit the same product. Even at this huge discrepancy there are customers who would only buy from Target at gunpoint.
Any small clothing company trying to make money out of suppling good value garments carrying an unidentifiable label ought to think up a new marketing strategy.