Local womenswear label Mela Purdie has opened up about cuts to its wholesale base, a new strategy to streamline the business, and why it's backing its new brand to turnover budgets of over $1 million from its first drop.
The brand, which is currently stocked in over 250 boutiques across Australia and New Zealand, is the brainchild of Australian entrepreneur Mela Purdie, who established her eponymous label 10 years ago.
According to Purdie, the business experienced 500 per cent growth within the first year of launch, and went on to record growth of 45 per cent with an annual turnover of $15 000,000 by the time the business was seven years old (2009–2010).
However, due to the economic downturn Purdie recently made the decision to consolidate the business and has slashed the label's wholesale base from 250 stores to 190 to make room for new developments ahead.
“With the economic downturn I made the decision to consolidate the business and focus on volume production and improving margins. The range was analysed, best-selling styles and best performing fabrics taken into consideration. The range was then reduced by 50 per cent. In 2011-2012 we also reduced the label's wholesale base to 190 stores who were prepared to back the product with consistent volume orders,” she said.
“This decision proved to be a good strategy as buyers appreciate the consolidation of ideas and are less confused and overwhelmed now when ordering. I just felt that with consumers and retailers becoming more cautious in their buying patterns, it was a good time to reduce the number of styles on offer and focus on only the best. The focus on winning styles has also worked on the retail floor with the consumer and therefore reflected in the buyers volumes at wholesale.”
Purdie revealed that turnover for the first two quarters since the changes has also exceeded budgets by 10 per cent, maintaining the 2009 figures, and the changes to her business have also made it possible to expand the brand in a different direction.
“With a high demand for the Mela Purdie product a new brand will be launched in March 2012 titled 'Me I Am'. It's a capsule collection of wearable clothes for beach to evening and I expect this new brand is expected to turnover budgets of over $1 million within its first delivery July 2012, based on only 15 styles,” she said.
“The concept has been evolving for some time based on consumer feedback and we believe from customer feedback that many boutiques will buy this product as it is something they have been asking us to produce for quite some time.”
Me I Am will carry similar pricepoints to the Mela Purdie main range, with silk sateen tunics and kaftans retailing from $350 to $400 and modal/silk jersey tops, tanks and tunics ranging from $140 to $350. The new collection will initially drop into selected boutiques Australia-wide, with some items also available online.