There are quite a few Australian fashion brands that remain gung-ho on scaling in the United States, despite the global tariff war.
Homegrown swimwear businesses Bond-Eye Group and Sheila the Label, as well as designer brands such as Venroy and Leo Lin, are continuing their push in the North American market, opening pop-ups, scaling online and tapping wholesale.
This comes two months after US President Donald Trump launched his ‘Liberation Day’ tariffs, adding extra taxes on products coming from a host of countries globally, most notably on Chinese goods.
Since then, his tariffs have been on a rollercoaster ride, with 90-day pauses being launched, some tariffs being exempted, others being extended, and – in the case of China – rising to unbearable levels. Not to mention local US courts getting involved trying to wipe them out.
Speaking with Ragtrader, Sheila founder Clare Barrins believes the US market remains lucrative despite the excess costs and supply challenges. In fact, Barrins highlights that the female population in the US is around 48 times larger than that of Australia, with the US hosting nearly 170 million women compared to our 13.4 million. This generates significantly more sales potential for the women’s swimwear brand.
“Additionally, US consumers, in my experience so far, tend to have more discretionary spending capacity for fashion and lifestyle products,” Barrins says. “We decided to push ahead with our launch into the US as we wanted to take a long-term view, in the hope that the tariff situation may not be permanent.
“We believe that establishing our presence in the US at a time when many are exiting, or not entering, can build brand confidence and loyalty. US market penetration is a milestone for many brands and for global viability and was something we wanted to push forward with.”
Bond-Eye Group CEO Steve Philpott concurs with Barrins assessment, telling Ragtrader that he and his team are playing the long game, absorbing a lot of the costs and challenges and riding it out.
“There is no better time to stand up and out when everybody is scrambling and in self preservation mode,” Philpott says.
“It is an unstable time and there is still a great deal of uncertainty around how long the tariffs will be in play and where they will end up. The tariff rollercoaster has shaken retail and consumer confidence and it’s not ideal circumstances to be investing. Or is it a great time for considered, calculated and strategic investment? I instinctively think yes.”
Both Barrins and Philpott have pushed their respective businesses into the US market over the last year. The Sheila website was expanded to include US consumers, and Philpott has tackled Miami Swim Week for his Sea Level brand and opened a Bond-Eye pop-up store in the West Village of New York City.
Meanwhile, Venroy opened its second US pop-up, this time on the West Coast, adding to its current sole store in Montauk near NYC, and Leo Lin is capitalising on its distribution deal with Bloomingdale’s, taking over the department store’s window display in NYC.
“Some of my team have flown onto Dallas to see some of our south west majors,” Philpott adds. “We have momentum and we are investing in the future and I have no doubt that this is going to pay off for us. Many brands have stopped delivering, some didn’t even turn up in Miami and that to me is a big mistake.”
On top of Miami Swim Week, Bond-Eye was also featured at New York Fashion Week thanks to an activation launched by WeWearAustralian, which also included other Australian brands such as Ngali and R.M. Williams.
Philpott says US retailers are also looking for brand partners they can trust, “and that’s in good times and hard times.”
“The hard times are when it counts,” he says. “The face to face conversations we had last week were invaluable and with the momentum we have, I’m anticipating growth. There is a group of Aussie brands that are going for it right now and it’s both encouraging to see and exciting to be a part of.”
But brands and retailers can’t pretend that the tariffs aren’t having an impact on margin and pricing, especially those that make in China.
Philpott says his swim group’s products that are made in China have been hit the hardest. In a recent story by Ragtrader, Philpott confirmed that 98 per cent of the products at Bond-Eye Swim are produced locally in Australia. Around 44 per cent of the brand’s revenue is made through US sales.
With its other brand Sea Level, 24 per cent of its revenue comes from the US, but that brand’s products are predominately made in countries such as China and India.
“We are playing the long game here, absorbing a lot of it and riding this time out,” Philpott says. “As we do this, we are inheriting business from the companies and brands that aren’t.
“Some strong DTC brands looked like they abandoned the US market completely when they simply passed the entire 145 per cent tariff increase on and I believe that’s a customer losing forever position.
“Absorbing some of the tariffs while we navigate the future is part of the investment we are making and there is a long way to go with this tariff story.”
Following the tariffs announcement two months ago, some brands and retailers have shifted the way they operate in the US. KMD Brands – parent company of Rip Curl, Kathmandu and Oboz – began redirecting some of its United States inventory to other global markets. Rip Curl US accounts for approximately 12 per cent and Oboz US approximately 7 per cent of the group’s annual sales.
Meanwhile, plus-size retailer City Chic pulled forward the bulk of its US inventory for this year and has since paused future supply into the country.
Barrins says switching manufacturers isn’t a quick solution, involving developing and refining new samples, which demands significant time, investment and dedication. “But we’re currently assessing options for manufacturing in the US and in other countries outside China,” Barrins says.
“The reality is that the US isn’t positioned strongly for swimwear manufacturing, domestically. We are working through options as we speak so it’s too soon to tell if tariffs will affect our prices in the US, but it’s very likely that it could.
“We will certainly be revisiting our pricing model to factor in the impact of tariffs should we continue manufacturing in China.”
Despite this, Barrins says while the Sheila brand has only just launched in the US online, there is still more she and her team would like to achieve there.
“Despite the uncertainty, we won’t be letting the tariff situation slow us down and we’re working actively to evolve our brand in the US,” she says.
As for Philpott, he has a significant edge with his Bond-Eye brand as most of the products are made in Australia, and are only subject to a 10 per cent tariff (as of writing).
“We are also able to react and meet market needs with much shorter lead times than if it was made offshore,” he says. “I hope the tariff shake up, the recent success of Australian Fashion Week and the Aussie brands that are flying the flag internationally will inspire the government to back and invest in our local industry. This is a time of opportunity.”