In for a penny but not a pound
It isn't difficult to deduce that Australian textile, clothing and footwear exporters have been feeling the pinch as a result of the fluctuating Aussie dollar.
With the British Pound equalling $A2.50 in April 2007, falling to $A2.10 three months later and now standing at $A2.06 and the Euro falling to a low of just $A1.64 at the time of press - how could offshore buyers not be looking for easier (and thus cheaper) alternatives?
Key international delegates attending the 2008 instalment of Rosemount Australian Fashion Week (RAFW) last month were far from shy about the impact the see-sawing currency was having on their buying budgets.
Regular attendee Lindy Lopes, who operates a speciality fashion boutique in London has always been a staunch supporter of Australian fashion. She says all her budgets had been thrown out of whack owing to the increase in the value of the Aussie dollar between the buying season and consumer selling season.
In turn this meant that many labels - she was to polite to detail which ones - had been priced out of the market, a situation further reinforced by their lacklustre performance instore. As a result Lopes says she now intends spending not only less on Australian spring/summer collections but also selecting fewer labels. And the problem isn't just confined to European buyers.
When Australian Elizabeth Charles, who operates two Australian-specialist stores in the United States and is a regular RAFW visitor, was asked by Ragtrader whether she found the strength of the Australian dollar impact on her spending power for spring/summer 2008/09, she replied: "So much so that I didn't attend [RAFW]".
The federal government's business promotion agency, Austrade, recently identified Indonesia as a key export market for Australian labels. However they too had been put out by the strength of the Aussie dollar. Yana Handalli, who owns a high-end fashion boutique called Velvet, claimed initially Australian price points were attractive when compared to the US or Europe but now with the price level on par, consumers would always select better known American or European brands over less known Australian options.
What is worse is that prior to this, Australia's fashion export market has evolved steadily over the past five years, according to Austrade figures. It reported that last year it helped around 100 fashion clients draw in around $178 million in export income - a staggering $55 million more than in 2003.
It appears that with the dollar expected to remain this strong for some time, the situation shows no sign of abating. So where does that leave Australian designers?
Most, it would seem, have little option but to reduce already tight margins, streamline overhead costs, drive innovation or strengthen their supply chain management process in order to make themselves more appealing to the overseas market.
Fortunately most Australian fashion businesses are only too aware that quality is usually a key point of difference meaning those who are smart will find alternative ways to cut costs - rather than compromise on the finish of their garments and potentially risk damaging the industry's reputation as a whole.
But with some designers showing at RAFW knowing they can't even service their domestic client base let alone take on international accounts maybe the news is not all bad.
Perhaps it will force some new generation designers to really consider whether they're ready to meet the challenges of exporting afterall.
By Tracey Porter