Boots and all
The affable Harvey Boots, for 23 years a fashion agent and then an importer, was getting ready to go full time into cow-pat hopping on his hobby farm when along came the man from Singapore.
The man, Anthony Lim, heads up a public company in Singapore called the Aussino Group which, among its various businesses has 400 designer level homewares stores dotted around South East Asia and about 100 budget fashion stores under the Sino brand. Aussino sells to Australia's major homewares retailers and has no ambition to go retail in this product category. But fashion is another matter.
Aussino was looking for the neuclus of a boutique chain dealing in sub-designer clothes with a European look aimed at women over 35. And that is exactly what Harvey Boots' and Alan Dong's Nuovo importing business was about.
They'd come to the conclusion that the best way to grow their company was to go retail, and had succeeded in opening two "Doppio" stores, in the Sydney suburbs of Rose Bay and Mosman, when Aussino started making mating calls. After an engagement of due diligence, Harvey and Alan walked down the isle, bring into the marriage Nuovo and Doppio to go with aa dowery of development cash from Aussino. The three way company is called Doppio Fashion Group Pty Ltd.
Nuovo will continue to trade as an importer within the group and will contribute some of the stock to the shops. Nuovo currently imports six European brands with another three about to be added. It will still supply its faithful retail customers.
The major growth of the new company will be in establishing a retail chain. In addition to the two initial stores, a third will open shortly in Chatswood. The rough plan is to open five new stores a year for five years. They will be spread throughout Australia.
A typical Doppio store is around 80 square metres, fitted out with blond wooden floors and stainless steel fixtures. The garment price range will be between $125 and $500 retail.
Although the growth money will be controlled from Singapore, Alan and Harvey will do their established thing of marketing and finance respectively.
Harvey is fired up more than I've seen him in a long time. At his stage in life most schmutta men prefer lying down to standing up but Harvey wants to run. The cows, and hopping over their pats will have to wait.
"You know," Harvey complains," I've been in this fashion business for 45 years but hardly anybody knows me. That might change at bit now."
The pitfalls of smartassery
While the main benefit of importing from China is lower prices, the other side of the coin can be late delivery and dodgy quality. Superficially, the attitude of typical Australian importers in China is to screw the guts out of the factories on price and then pay for quality control to make sure they get more they technically pay for. The result is too often sorrow and anguish on both sides.
A mate of mine who imports Chinese t-shirts in considerable volume does things differently. He asks his long established factory for a quote on a certain quality and quantity and he accepts that price. He never tries to force it lower with bargaining. It is either yes or no. His factory is now well used to the system. If it offers a competitive quote it gets the order. If not, not.
Does this sound naïve? It might, until you realise that the factory's quality, packing, and promised shipment are virtually always perfect.
One of the tactics employed by Chinese factories is, when they are pushed too far on price, they offload the order on to a cheaper factory; cheaper because its sewing quality is worse, or the fabric has had a few grams taken out of it or low quality dyestuffs have been used in finishing.
If an importer in these circumstances does manage to catch the factory out by employing a heavy quality-control (QC) audit, what good does that do the order? The importer must ask himself whether he's in the detective business or the business of bringing quality goods to market - and on time. There's no point in simply swapping the quality problem for a late delivery or a claim.
This attitude would appear to be trap that big Australian retailers could fall into as they forsake local suppliers in favour of doing the importing themselves. They have grown used to the squeezing routine on the locals and they continue it with the Chinese. Pretty soon they find that they suffer dropping quality - but are not told about it until the goods get into QC or, worse still, they arrive in Australia after having been paid for by letter of credit.
By Fraser McEwing