Bendon Group CEO Anna Johnson has cited supply chain consolidation as a key factor behind the intimate apparel brand’s earlier troubles - and warned retailers to invest in operating systems.
In 2021, former parent company Naked Brands Group divested from the brand and sold it to chairman Justin Davis-Rice and Johnson for $1 New Zealand dollar.
Speaking at Ragtrader Live Sydney, Johnson said long-term consolidation and cost cutting had impacted its operations.
“The company made some really interesting decisions several years ago and consolidated the supply chain so much that we weren't able to leverage the requirements that we needed,” Johnson said. “We've had some great partners, and they really stood by us when we had no stock because we were so constrained.
“Most people would think [the issue] was cash flow, but it was actually some decisions made several years ago.”
Johnson said there are 25 components to manufacturing a bra, involving a supply chain of seven different vendors just for one range.
"Not to mention, one style - and in a range, you can have three or four styles - has 26 different sizes, and they must fit to a global standard," Johnson said. "On average, a bra takes five months in development and on a production line to finish. We design 18 months in advance. It's a slow shift to turn, or to react to, market trends."
Johnson said investing in key operating systems and back-end supply chain partners is integral to the success of fashion retailers.
“Unfortunately, we as a company did not do that in the last 20-odd years,” Johnson said. “And that really came home in the last 12 to 18 months.
“I do not recommend anyone do what we did over the last 12 months and in this very short period of time, but you must invest in your back end, your logistics, your supply chain, your tech, and your people.
Johnson said ongoing investment would help businesses avoid significant cost pressures.
“It would have been ideal not to do it all in the same year, but due to expired licenses and many other events out of our control, it was out of our hands and just happened to fall that way.”
“This last year, we moved from a 2005 un-upgradable version of JDE to a cloud-based ERP - and we survived. We moved from 43 physical servers that we owned, and we're over 12 years old, to a controlled 13 servers in a secure environment.
“We have, due to the uncoupling of a US license we previously owned, changed eCommerce platforms, and with that changed our CRM.
“We've invested, in the last few years, HRAS, LMS, engagement survey software and an entire suite of people programs.
“And we did all of that last year whilst building and installing 24 concession stores here in Australia in eight weeks.”