In this op-ed, RMIT associate professor Carol Tan shares the key lessons behind Cue Clothing's recent collapse.
The collapse of Cue and Veronika Maine has been met with disappointment from many consumers. For decades, both labels represented quality workwear, local design, and professional dressing. Yet while their receivership marks the end of an era, it would be a mistake to view it either as a one-off anomaly or as evidence that all heritage fashion brands are doomed.
Instead, Cue's collapse offers a valuable lens for understanding the pressures reshaping Australia's fashion market.
The question is whether Cue is a bellwether or an outlier. The answer is neither.
On one hand, Cue faced issues specific to its own circumstances. The business was navigating ownership change, leadership departures, and the challenge of supporting an extensive store network. On the other hand, the conditions surrounding its collapse reflect broader pressures affecting many retailers. Consumers are increasingly cautious with discretionary spending, operating costs remain elevated, and competition has intensified across virtually every segment of the market.
Perhaps the most revealing detail from the receivers was that sales had improved, but overhead costs remained too high. It suggests the issue was not necessarily a lack of customer demand. Rather, it raises a more fundamental question about whether traditional retail operating models remain viable.
Many heritage fashion retailers expanded during an era when adding stores was the primary path to growth. Today, each location carries significant fixed costs, including rent, wages, inventory, and logistics. At the same time, consumers are increasingly comparing products, prices, and brands. A larger retail footprint no longer creates competitive advantage. In some cases, it can become a burden.
Yet the challenge is not just about store numbers. It is also about positioning.
The Australian fashion market has become increasingly polarised. At one end are value-focused retailers such as Shein, Temu and Kmart, which appeal to consumers seeking affordability and convenience. At the other end are premium brands that compete through craftsmanship, exclusivity, heritage, or elevated customer experiences.
The greatest pressure is often felt in the middle of the market, where brands must work harder to justify their price points and explain why consumers should choose them over both cheaper and more premium alternatives.
Consumers have not stopped buying fashion. They have become more selective about which brands they shop at. Heritage remains valuable, but heritage alone is not a value proposition.
The brands performing well today typically give customers a very clear reason to buy.
Heritage brands such as Blundstone, R.M. Williams and Oroton demonstrate that longevity itself is not the problem. Blundstone has successfully expanded beyond Australia by building a reputation around durability, functionality and authenticity. R.M. Williams has undergone significant ownership changes over the past decade, including periods under both international and local investors, yet continues to command premium pricing because it combines craftsmanship, heritage and a distinctive Australian identity. Oroton's recovery following voluntary administration demonstrates that heritage brands can remain relevant when they adapt their positioning, retail strategy and operating model.
Newer Australian brands provide an equally important lesson. LSKD has built a strong community around fitness, performance and lifestyle. Although it operates in a very different segment to heritage brands, its success reflects the same underlying principle: consumers understand what it stands for.
Successful brands combine heritage, where relevant, with a clear market position, operational discipline and a compelling reason for customers to choose them.
For Cue and Veronika Maine, considerable value remains. Both brands have strong awareness, loyal customers and accumulated goodwill. A future owner would be acquiring more than a collection of stores.
The opportunity may lie in building a more focused business through a continued reduction in retail footprint, ongoing use of department store concessions, stronger digital capabilities, and a clearer articulation of what differentiates the brands in an increasingly competitive market.
Cue's collapse does not mean Australian consumers have abandoned quality, heritage, or established brands.
It demonstrates that the market has become more competitive and polarised. The brands most likely to succeed will be those that give consumers a clear reason to buy, while maintaining a business model aligned with how people currently shop.