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Ragtrader founder Fraser McEwing goes behind the doors at Cue.
A spectacular and consistent fashion performer since opening its first small city boutique in Sydney in 1968, Cue – along with its sister label Veronika Maine – has never wavered from manufacturing in Australia.
Even today, with clear, proven supply lines available from Asia, Cue imports only what it can’t make here, translating into knitwear and a couple of basic shirts. That leaves around 75% of its often-high fashion styles being cut, sewn and finished in NSW.
Executive chairman, Rod Levis, makes the startling statement: “There was no need to go offshore.”
But t that said, Australian production could not compete in the budget, high volume sector, where price is the chief driver. It is only when you reach the Cue and Veronika Maine level of complex styling and lower production runs that Australian factories are in the hunt.
And even then, it is more than money that drives the decision to stay local. There is pride in Cue being able to hang the “Made in Australia/Ethical Clothing” swing ticket on a garment; it is fused into the company’s backbone, along with using demonstrably labour-legal Australian factories.
Rather than seeing how union activity could be circumvented, Cue has embraced it, along with membership and participation in Ethical Clothing Australia. In fact, Cue’s chief operating officer, Damien Peirce-Grant, is a member of the Ethical Clothing Council.
He is quite happy for the Textile, Clothing and Footwear Union of Australia to audit compliance in any of the factories used by Cue because it does the work for Cue’s labelling requirements.
There are many reasons why the Cue made-in-Australia model works. One is a willingness to forego some profit for the convenience and efficiency of having total control over the process from design to retail rack. All design, patternmaking and sampling is done in-house – in the historical Sydney clothing centre of Surry Hills.
A style can be evolved and trialled in-store before being committed to volume production at an efficiency level virtually impossible using imports. And if the fish really start biting, repeats can be in store in a matter of days – without the fiddle and cost of emails and airfreight.
While the quick response of local production and the employment of Australian machinists might warm the heart, what does it cost in dollars?
Rod Levis says: “Let’s take a locally made jacket that is retailing for $270. There’s probably quite a bit of work in it and if a Chinese factory gets it right, the imported version could sell for $250. So if we sell it at the higher price there’s twenty dollars extra profit we could make. But we choose not to.”
This illustrates one of those intangibles about fashion: a garment is worth what the customer will pay. Irrespective of the cost price of that jacket, it will command a selling price of $270, and if that provides a satisfactory profit margin for Cue, why go through the additional pain of importing?
The lynchpin here, of course, is how attractive is the jacket? In Cue’s case, that’s what wins the day and it’s what has made the company Myer’s most successful fashion supplier year in, year out, as well as being voted Australia’s favourite fashion brand by marie Claire readers. It’s all about continually delivering on superior fabrication and styling.
Cue’s Australian factories are in the deep western Sydney suburb of Liverpool. All are independently owned and many have been working for Cue for more than 30 years. Some use outworkers – within the union’s guidelines – and most of the factories produce exclusively for Cue. In fact, Cue is Australia’s largest single user of Australian clothing factory production – yet another fact that places Cue in the unique category.
While we’re on statistics, the Cue and Veronika Maine vertical retail labels are currently available from more than 214 retail outlets around Australia and New Zealand. The breakdown is a mixture of stand-alone and concession stores with a further 81 Veronika Maine outlets planned for Myer over the next 12 months or so. Each brand has, of course, an online store as well.
The grand total will exceed 300 some time next year – an eye-watering number when you consider that Veronika Maine retail prices are between $89 and $399, with Cue between $90 and $570.
The Cue group directly employs more than 1500 people and growing.
It is also a majority shareholder in the eponymous Dion Lee fashion label, but plays a back office support role, allowing Dion’s fashion mojo free rein. Interestingly, the Dion Lee label currently does more business in the US than it does in Australia where it has five stand-alone stores and concessions in David Jones.
Its growing popularity in the US has prompted a move to open a sales showroom in New York which, going on past struggles that Australian designers have had with New York offices, is brave. But here’s the eyebrow-raiser; with the exception of knitwear, Dion Lee garments sold in the US will be made in Australia.
That’s a rarity, if ever there was one.
To come in where we started, Cue’s reliance on local production provides a benchmark, but a very high one when you consider what you need to do in reaching it. However, with our dollar pushing up the price of imports and China production prices growing anyway, there may be a green shoot or two for Australian clothing manufacturers.
I’m told that it is now considerably dearer to open an office in Shanghai than it is in Sydney or Melbourne, another sign that doing business with China is a lot less cost effective than it used to be.
Maybe this is an opportunity for the Clothing Union to modify its role from policeman to marketer of Australian production. It wouldn’t take much to put together a list of Australian contract makers, their locations and their garment specialties and book some regular advertising in the trade press to bring the bees to the flowers.