Another foreign fashion giant has confirmed its entry date into the Australian market.
The new head of Oroton Group, Mark Newman, has confirmed that mid-2015 will see the first Banana Republic store open in Australia.
The move will mark the brand's retail debut in Australia via a stand-alone concept store, with a further 10 possible stores in the pipeline.
In addition, the group's new franchise agreement with Gap Inc. will also see three new Gap stores launched in 2014. The new outlets will complement the existing three stores taken over by the group to date.
Speaking this morning at the company's annual general meeting, Newman said the new additions to the Oroton Group fold could grow to be larger than the Ralph Lauren account, which the business lost recently.
“We believe the Gap business could be up to 20 stores in 10 years and Banana Republic up to 10 stores and can be a significantly larger business than Ralph Lauren was,” he said.
He also said the group and Oroton brand have been under pressure of late, addressed recent “scrutiny” towards the iconic brand and flagged other significant changes to come.
As part of a group-wide strategy, Newman confirmed that the group is “working on a revised brand statement” to reinforce its luxury positioning” for the Oroton brand.
The company has also engaged an international architectural company to work on an updated store concept for some key Oroton store refurbishments that are due this financial year.
In addition, Newman said that Oroton will continue to review its product and price strategy as it develops new collections, with a focus on better sell-through at full price and higher margin generation.
“Clearly, for all intents and purposes, having only one brand for the time being has put extra scrutiny on our Oroton brand, particularly in light of the decline in like-for-like sales last year.”
Newman added that he has been in discussions with the brand team over the past three months to “really understand the key factors that have led to that decline”, citing an increasingly competitive environment as a major factor.
“I think it is fair to say, that we may not have been looking over our shoulder as closely as we could have been and have had to react to the competitive challenge a little too late.” Newman said.
“I think it is also true to say that we may not have invested enough in our brand here in Australia over the past few years and particularly concerning is the amount of discounting that the Oroton brand has been subjected to with larger and deeper sale periods and more frequent 'friends and family' type sales.”
Newman also hinted at a possible retail rollout in the near future, commenting on the agreement made last year with David Jones, to close all of its accessories wholesale 'shop-in-shops' in order to focus on eight retail concessions.
“What this has highlighted is that although we have stores in most of the cities where we wish to be present, there are now a few places we do nit currently have physical representation where perhaps we could,” he said.
As previously reported on ragtrader.com.au, the year ahead will also see the opening of the first Brooks Brothers stores under the group's joint venture agreement, with up to eight stores to be open between February and April 2014.
Looking forward, Newman also said that the group's losses of $2 million in 2013 are expected to grow marginally this year.
“Regarding current trade...the first 17 weeks have been somewhat volatile with consumers anticipating heavy and continued discounting.
“While we have a clear strategy in place for the all important Christmas and New Year period, the market remains unpredictable but we are all prepared to react to the market conditions as they develop.”