Australian companies


Despite the cloud of retail doom and gloom hanging over Australia of late, with the recent downfall of fashion companies Herringbone, Marcs, David Lawrence and Rhodes and Beckett, some Australian retailers are not just thriving domestically, they are socking it to the competition internationally too.

While we count some of these casualties and mourn their demise: electronics retailer Dick Smith; Woolworth’s DIY Masters chain, kids clothing company Pumpkin Patch and Payless Shoes, it is important to look at which Australian companies are doing well overseas and how they’ve managed to do it.


Some of the most high profile companies going into voluntary administration recently have been those in the fashion industry but some Australian companies have managed to buck the trend.

The Cotton On Group (COG) has become an important global force since originating in Geelong, Victoria in 1991.

The group, which also includes Cotton On Kids, Cotton On Body, Rubi, Supre and Factorie, now boasts more than 1400 clothing stores across 18 countries, including outlets in the US, Hong Kong, Malaysia, Singapore, Brazil, Oman, South Africa and the United Arab Emirates.

Australian women’s fitness label Lorna Jane has proved its athleticism in international markets, chalking up more than 200 stores across Australia and the US and stockists in Europe, the UK, Africa, Asia and the Middle East.

Premier Investments, which also owns brands including Just Jeans, Portmans and Jay Jays, has made in-roads into New Zealand with its love poem to pyjamas, Peter Alexander.

The recent bid for the Speciality Fashion Group by Al-Afia Holdings, a company controlled by the Qatar Royal Family, is an indication that the Group’s labels Rivers, Millers and Katies could soon be trading globally too.

Retail expert Brian Walker told Retailbiz that the Australian fashion industry was not down and out.

He said that Australia’s mid-market merchandise fashion exports did well, partly because globalisation had brought a ‘sameness’ to high streets the world over.

“British markets aren’t decidedly British. US markets aren’t decidedly American. There’s a homogenisation of these markets,” Walker said.

“Well-educated people with disposable incomes, people with very similar tastes and aspirations and technology has played a part in that.”

While there were seasonal differences in fashion, for example, the stores, whether they were in California or Surrey, looked fundamentally alike and carried a similar product range.

Stationery, gifts and homewares

Australian companies have already achieved some great things overseas in the arena of quirky stationery, gifts and homewares.

Off-beat stationery and gifts brand Typo—another Cotton On luminary—launched in the UK in April last year after the company noticed strong online UK sales and followed through with bricks and mortar. It now has more than 145 stores in ten countries and ships globally through its online store.

Still on the stationery and gift theme, Australian company Kikki.k. has stores in New Zealand, Singapore, the UK and Hong Kong, as well as over here.

Meanwhile, kids’ favourite colourful stationery company Smiggle, owned by Premier Investments Limited, has more than 90 stores in the UK, as well as stores in New Zealand, Singapore, Malaysia and Hong Kong.

And others

Bunnings, owned by Wesfarmers, is leading the charge on the lucrative British home improvement and garden market. It opened up its first pilot UK store in St Albans, on the site of the former Homebase DIY chain store in Hertfordshire earlier this month.

In other sectors, vitamin supplement company Blackmores has been doing well in Asia, while Bellamy’s organic food and its partner Tatura Milk Industries have been growing their overseas markets exponentially, especially in Asia, where demand for clean, reputable baby formula appears insatiable.

Australian company Cochlear, which develops and makes cochlear implants, has been going great guns overseas and now supplies more than 100 countries internationally.

Secrets to success

Walker said successful players like Smiggle and Cotton On Group had a key point of difference but both were ‘entirely replicable’ in other countries adding, “there’s no patriotic nuance”.

Australian companies that had gone global often made large investments in setting up overseas, he said. They researched overseas markets thoroughly before setting up physical stores, had well managed financials and operated in an integrated and skillful way.

For example, dedicated teams from Bunnings spent months meticulously researching the UK DIY market before opening a store.

Investing in a country was exactly what foreign companies such as Uniqlo and H&M did when they came to Australia, Walker said. Although they were yet to make the kind of money they were used to raking in in other countries, he said their long-term strategy would pay off.

“International retailers are showing us they are in it for the long haul. For retailers, in some cases, the long term is that financial year.”

Of course, having a parent company to buoy you up is always handy.

Walker said traditionally Australian companies had been a little risk averse to expanding into overseas markets, perhaps because they may not have felt confident in managing stores so far away. But he said globalisation and the potential rewards of overseas expansion—scale, profit, dividends and returns—was erasing this resistance.

It helped having an online presence first to reduce the risk of striking out overseas. It enabled companies to look at sales in various countries and study the demographic and conditions in which sales were made so they could make investment decision with a greater degree of confidence.

“The greater profits will be done in the physical stores but the greater risk will occur,” he said.

The only way is up (and out)

Walker predicts more and more Australian businesses will go international to take advantage of new markets, whether through online or offline retailing.

“Culturally there’s something about the Australian psyche about having a go; not dying wondering, that actually plays a part as well. There’s more of a mindset to international retailing now.

“The expansion is happening, the question is whether it’s led by medium-size businesses, like Lorna Jane, or by large corporates. [Either way] it paves the way to show others that it can be done.”

While Australia’s isolation provided a measure of protection against oversees competition in the past, that had been blown wide open.

But Australian retailers do face barriers domestically and internationally, through rising costs (rent, and wages being the most serious) which put pressure on margins.

Home-grown companies are also copping an influx of overseas retailers while trying to attract and retain customers who exhibit little brand loyalty and are constantly armed with mobile technology.

But Walker said Australian retail sales were still pretty good, cash rates were low, Australia’s population was growing and business confidence was relatively stable.

“It’s a period of investment for a lot of Australian retailers. Investing in good business information systems to create databases, upgrading shop fit-outs, the look, and the brands. Refreshing. Re-innovating.

“Like all these things, the good ones survive and the great ones thrive.”

But he said some of Australia’s main stayers could do with hitting the refresh button, such as Country Road and Just Jeans, which he said were solid companies with good products but whose look was stuck somewhere in the previous decade, “a bit tired”.


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