What defined the Australian ragtrade in 2010? Assia Benmedjdoub looks back on key moments.
Karen bids farewell
Topshop top gun Jane Shepherdson. H&M creative force Margareta van den Bosch. LVMH consultant Jean Jacques Picart. Iconic designer Zandra Rhodes. In her role as L’Oreal Melbourne Fashion Festival (LMFF) director, Karen Webster wooed some of the biggest names in fashion to present at the LMFF annual business seminar. She positioned the consumer event as a world-class affair, spearheading a range of innovative in-store events, lectures, exhibitions, installations, parades and demonstrations each year. Having being a LMFF board director since its inception in 1996 and festival director for the past five years, Webster stepped away from the latter position earlier this year. Selected industry guests bade her farewell at an intimate gathering in Melbourne’s MiFA Gallery in May. Conde Nast Asia Pacific executive Grant Pearce replaced Webster as LMFF creative director on July 15. Pearce is an esteemed publisher, once overseeing titles such as Vogue and GQ Australia.
Fair nightmare: new work laws
The Australian fashion industry struggled to come to terms with significant changes in the national workplace relations system. The changes included the introduction of new National Employment Standards and the commencement of Modern Awards from January 1, 2010. Cotton On was the first major fashion chain to feel the brunt of national workplace relations tribunal Fair Work Australia, ordered to back-pay some 3300 employees a total of $278,000 in July. An investigation by the Ombudsman found the retailer contravened workplace laws when it failed to pay staff for attending training sessions and meetings outside working hours. Fast Future Brands, which owns Tempt and Valleygirl, also landed in hot water when it was ordered to provide a female staff member with nine months of back pay in September. While the Modern Awards resulted in pay rates falling in some states, ‘take-home pay’ for employees was not to be less than that of the previous award. If this occurred, Fair Work Australia could make a take-home pay order to effectively “top up” the worker’s pay. Fast Future Brands was the first business in Australia to be handed such an order.
Brave New World
The stakes were raised for brick and mortar retailers this year, with a series of world-class developments opening in key shopping precincts across Australia. Department stores Myer and David Jones chalked up Melbourne as their battle ground of choice, both unveiling multimillion dollar revamps of flagship sites in Bourke Street. David Jones showcased its $100 million refurbishment in August, while Myer revealed stage one of its record-breaking $300 million redevelopment in October. Still in CBD Melbourne, eyewear giant Luxottica Group trumped both stores on schedule by revealing its first OPSM Eye Hub in July. The revolutionary 1500 square metre, split-level, optical store included a simulation room for testing glare and wind resistance, touch-screen interactive mirrors and a product vault in the centre of the store. Not to be outdone, Sydney shoppers were given access to the $1.2 billion Westfield CBD redevelopment project just before the year drew to a close. After two years of construction, the first stage opening saw 130 fashion and food specialty stores kick off for trade with Hugo Boss, Gucci, Diane Von Furstenberg and Mulberry among the luxury retailers on offer.
Looking good Australia
No doubt prompted by Australia’s GFC-busting performance, several major international retailers set their crosshairs south this year. US retail giant Gap unleashed a 1200 square metre flagship in Melbourne’s Chadstone shopping centre in August, followed by a two-storey site at Westfield Sydney CBD in late October. Spanish powerhouse Zara publicly confirmed rumours it will expand down under in 2011, while London-based giant Next took trademark action against two local lifestyle brands, prompting talks of a potential move into the market. Abercrombie & Fitch, Forever 21 and Uniqlo were also reportedly eyeing leasing opportunities in Australia. Local retailers returned the favour: Melbourne-based Witchery launched into the Singaporean market in March and opened eight concession spaces in Suttafords, a South African department store, last month. Seduce is currently negotiating its launch into the UK market via high street retailer Lipsy, while accessory chain Mimco is aiming to double its network of five UK retail sites by Christmas.
Fashion grows up
Rosemount Australian Fashion Week celebrated 15 years of business in 2010. Founded by public relations guru Simon Lock in 1996, the event was acquired by events giant IMG Fashion in 2005. As part of its milestone celebration, the firm collaborated with the Powerhouse Museum on an exhibition exploring the highlights and controversies surrounding the event in ‘Frock Stars: Inside Australian Fashion Week’. One of the greatest challenges to the Australian Fashion Week machine came in the early noughties, when entrepreuners Tony Assness and Victoria Fisher mounted a series of spectacular on-schedule, off-site parades from 2002 to 2005. Staged in direct competition to the main event, the parades were held at Sydney’s Wharf 3 container terminal. Industry delegates shifted frantically between venues as local designers signed on for both showcases. Lock was successful in eventually trumping the duo, however, and it was business as usual when IMG Fashion clinched Australian Fashion Week in 2005. This year, Lock did not renew his contract as managing director of fashion with IMG Asia Pacific, truly marking the end of an era. Looking at our southern neighbours, New Zealand Fashion Week also had cause for celebration in 2010, marking a decade since it first kicked off.
David Jones shake-up
While there was cause for celebration in the Australian fashion trade calender, it was a year department store David Jones would sooner forget. Former chief executive Mark McInnes left his $4 million job after a former employee accused him of sexual harassment in June. The stakes were raised when the employee, David Jones publicist Kristy Fraser-Kirk, lodged a $37 million claim against the company, revealing she was harassed on multiple occasions. The Federal Court case proved to be a disaster for the company, with high-profile coverage across national newspapers and television networks. Sparks flew at suggestions more employees had fallen victim to the disgraced former CEO. The record claim ended with a settlement of $850,000 in October, but the travails didn’t end there. Last month, iconic group general manager of fashion and beauty Colette Garnsey resigned from the department store to take on an executive role at Pacific Brands. She was joined in her departure by David Jones group general manager of marketing Damian Eales, who moved on to banking giant Westpac.
Year of the Lee
2010 saw the rise and rise of designer Dion Lee. His meteoric year began under the sails of the Sydney Opera House in May, where his Rosemount Australian Fashion Week collection gathered unprecedented acclaim from buyers and media. Iconic fashion journalist and Vogue Australian contributor Tim Blanks described it as a “flawless presentation”, with his complex pleated and knotted dresses “mesmerising” and testing “his technique to the max”. Employing his signature take on tailored sportswear, Lee used rorschach blots as a key print in the range. He offset this with pastel shades of blue, violet and dark, inky tones. Just two months later, Lee followed in the footsteps of eccentric fashion label Romance Was Born by scooping the prestigious L’Oreal Melbourne Fashion Festival 2010 Designer of the Year Award. Further acclaim was to follow in November, when the designer beat out two finalists for the Qantas Spirit of Youth Awards in Sydney. As part of his win, Lee will be mentored by the founders of womenswear label Zimmermann in 2011. Commercial success was also in the winning formula for Lee this year, securing lucrative accounts with department store David Jones, luxury etailer net-a-porter.com and a collaborative venture with retailer Cue.
Billabong acquisition wave
After a spate of acquisitions in the northern hemisphere, Billabong capped off an aggressive year by pouncing on the assets of Australia’s General Pants Group. The surfwear giant purchased its Surf Dive ‘n’ Ski and Jetty Surf retail stores, taking its total international door count to 558. The deal, which was sealed for an undisclosed sum, involved 36 brick and mortar sites across both brands as well as two licensed Billabong stores. The assets were expected to contribute approximately three per cent of Billabong Group’s revenue in 2010/11. It followed the acquisition of Canadian action sports retailer West 49 for $83 million. Billabong snapped up its network of 138 stores and vowed to expand its wholesale operations. But it wasn’t all about the big players this year – the surfwear giant also set its sights closer to home. After close to 30 years in the business, Byron Bay-based brothers Gary and Mark Timperley sold their four local stores to Billabong in July. This included their Big Kahuna, S-cape Byron and licensed Billabong sites. What prompted Billabong’s cashed up 2010? In June 2009, the company announced it had completed a $291 million capital raising. That’s one hell of a piggy bank.
Ksubi: fall and rise
Still on the subject of Billabong, Ragtrader exclusively revealed the company had made an eleventh hour offer to acquire denim brand Ksubi earlier this year. But it was not to be. Streetwear group Bleach and Quicksilver founder Harry Hodge made a winning offer of $5 million plus accrued interest on existing debt. It was a turbulent year for Ksubi. Founders Dan Single and George Gorrow handed the debt-riddled company over to administrators in January. A report by administrators Grant Thornton unearthed spectacular revelations about the business: despite turning over $19.7 million at the height of trade in 2007, it concluded the brand was most likely insolvent by January 2008. Ksubi resurfaced from its descent into liquidation in May, when it staged a 10th anniversary ready-to-wear show at Rosemount Australian Fashion Week. Bleach director Mark Byers was optimistic when he spoke to Ragtrader at the time: “A lot of normal director responsibilities will be taken off [the founders’] shoulders and they will just be the free spirits they need to be to make the brand as quirky as it used to be and should be.” The comeback show was live streamed via the official website of fashion publication Harper’s Bazaar.
Multichannel madness
It wasn’t just the designer fashion brands which embraced the digital space. Chain retailers and department stores moved quickly to expand their multichannel operations, with viral campaigns, social media initiatives and e-commerce functions. High street retailers Country Road, Saba and Sportscraft were among those to introduce online shopping this year. David Jones launched a capsule offer in time for Christmas. It was a case of double dipping for the department store, which succumbed to the ‘early adopter’ syndrome in the early noughties by launching an online division which saw it lose $30 million in one year. Myer took multichannel retailing to a new level, concluding a busy year with the launch of an iPad application for its emporium magazine. This followed a truly interactive spring racing campaign, which featured interactive lookbooks online, catalogues, celebrity style guides on social network channel Youtube and targeted material on the Myer iPhone application. Independent fashion designers also continued to launch their own online stores, often complementing these with seasonal fashion films. Romance Was Born’s ‘City Limits’ by Kris Moyes was among the most memorable. The film can be viewed here: http://www.youtube.com/watch?v=2bLfVlZYgfg&feature=related
Ethics without the sweat
It’s all in the name. What was previously known as the ‘Homeworkers Code of Practice’ and the ‘No Sweat Shop’ label was rebranded to Ethical Clothing Australia (ECA) in January. Both are part of a joint business-union initiative which ensures local makers work in ethical conditions and receive at least minimum wage for their services. The Homeworkers Code Committee administers the voluntary accreditation system, which covers Australian-made clothing, textile and footwear products. So did the new name, new logo and new look work? Designer labels Lisa Ho and Ginger and Smart marched into the Rosemount Australian Fashion Week circuit having completed the accreditation process. Just two months before this, high street chains Cue and Veronika Maine also got the tick of approval, and cult denim label Nobody joined the bandwagon in August. Brands are required to expose their supply chain to ECA officials, with approved labels then licensed to display the Ethical Footwear Australia and Ethical Textiles Australia trademarks on their Australian-made goods. ECA national coordinator Emer Diviney has big plans to continue the campaign into 2011: “I’m hoping in the not too distant future it will be a bit of a who’s who of the Australian fashion and clothing industry.”
Ready to rumble
Australian and New Zealand boutiques might be located on the opposite side of the earth, but an unpronounceable and provocative volcano in Iceland made its presence felt to both. Deliveries from key international markets ground to a halt earlier in the year, as thick plumes of volcanic ash from Iceland saw several countries rendered into virtual no-fly zones. One of the more high-profile victims was UK retail giant Topshop. It was then negotiating a launch into the New Zealand market via Auckland boutique The Department Store. Air freight deliveries from the UK were delayed, leading the boutique to postpone its highly anticipated launch. It wasn’t all doom and gloom however, with The Department Store staging a ‘preview weekend’ to sell off its first delivery of Topshop stock. Owner Karen Walker said the store’s buying strategy would be “wide and shallow” with weekly deliveries of up to 30 new styles in line with the northern hemisphere. Was she successful in thwarting the might of Eyjafjallajokull? Consumers queued outside the store for the preview opening from 8am.
Trademark this
It was the year of intellectual property protection. Close to every edition of Ragtrader broke news on this battle front. Among the key examples was international high street powerhouse Mango, which was the target of a trademark protection push by Australian discount department store Big W. Big W is the exclusive distributor of a lifestyle label of the same name. Despite not operating any stores in Australia, UK fast fashion chain Next also took action against two local companies. Nest and Next (furniture and homewares) both walked away unscathed. One of the most consistent companies to pop up in this area was swimwear label Seafolly. In September, Seafolly filed an application with the Federal Court in a bid to protect its reputation, after swimwear designer Leah Madden alleged it had repeatedly ripped off her designs. The White Sands founder issued a mass email containing eight side-by-side images of her swimsuits from 2009 and similar Seafolly designs from 2010. In a www.ragtrader.com.au exclusive, Seafolly vehemently denied the allegations and confirmed it had production documents to back up its claims. The brand has successfully taken legal action against several swimwear brands for infringing its protected designs.
Tough times toll
The economy continued to play havoc on bottom lines. Melbourne footwear group Figgins Holdings was the first major industry fatality of the year. It collapsed into liquidation in late February. The company operated 140 stores across Australia and once owned the Midas, Emporio, Mollini, Scooter and Florsheim brands. It came just 12 months after the company rebranded its Evelyn Miles stores into Midas and closed its 43-store Shoobiz chain, resulting in 220 job losses. The collapse was first reported by www.ragtrader.com.au with the sale of its footwear assets also exclusively covered by Ragtrader magazine. It wasn’t the first and final fall of the year. Most notably, streetwear retailer and wholesaler Ed Hardy Australia went into liquidation in September owing creditors some $15 million and staff around $500,000. The brand operated 18 stores nationwide, including four concessions in department store Myer and wholesale accounts with independent boutiques.
Still talking about sex
The Advertising Standards Bureau introduced a new category of complaints this year – the sexualisation of children. No stranger to allegations of adultifying young consumers, the fashion industry was once again thrown into the spotlight over its marketing collateral. However, the Advertising Standards Board dismissed the majority of complaints levelled against clothing brands over the last 12 months, the most notable of which was a childrenswear campaign for Witchery Kids. The creative featured brooding children posing in or around a vintage Kombi van, fully clothed in garments from the spring/summer 2010 range. It gathered unprecedented coverage in national papers. Complainants to the Bureau alleged both the styling and “defiant” model poses presented children in a sexual nature. The case was dismissed in a ruling last month, with the board deeming the children were presented in a manner suitable for their age.