FINZ Media Coverage

'God' catches-up with avant-garde label
FINZ Coverage: The NZ Herald
24 April, 2006
BY GEORGINA BOND

Fashion designer Francis Hooper thought it was a prank when Gucci's vice-president phoned last month. Hooper was at Paris Fashion Week with his clothing label World, and it was a New Zealand Trade and Enterprise official who relayed the request: James McArthur, executive and vice-president of Gucci Group, would like to meet the Kiwi designers. "God himself wanted to come down from his throne to see us?" asked Hooper of McArthur who is also president and chief executive of Paris fashion house Balenciaga and effectively controls some of the biggest fashion brands in the world. But sure enough the "intimidating and powerful" McArthur "rocked up" to World's exhibition site at the Tranoi fair for a chat with Hooper about what was on the horizon for World. What that meant to Hooper who, with wife Denise L'Estrange-Corbet, set up World 16 years ago, was that World existed.

This week, World returns to Australian Fashion Week. World and Zambesi will show with first timers Cybele and Veronica Keucke. With the cheque-books of international buyers open over the week, the designers have a small window in which to sell their collections, upon which the next six months hinges. Not only that, on Thursday, World will burn $40,000 in just 12 minutes on the runway show itself - an amount Hooper said was "obscene" and made him feel sick to say aloud. But for the most avant-garde of Kiwi labels the show, which blends fashion and theatre, is crucial to make the buyers fall in love with the brand. However, Hooper and L'Estrange-Corbet know they will be lucky if they sign up just one or two international customers this week. World was not mainstream and did not cater to the looks of the season, said L'Estrange-Corbet. Retailers needed to be like-minded and have to "get us", she said.

And increasingly, Australians are getting it, with that country World's fastest growing market where it has one store in Sydney and plans to open a second in Melbourne next year. The label is also stocked in five other boutique stores, and Hooper expected the market would be close to saturation point when that number grew to 12. In Europe, sales were embryonic but increasing every season. Showing in Paris four times a year, as well as Australian and New Zealand Fashion weeks was important to building on that. World was also stocked in a couple of US boutiques and the Japanese were starting to show an interest, said Hooper.

NZTE trade commissioner in Melbourne Sara Lochore said the size limitations of the New Zealand market meant designers needed to think globally from day one. "Successful New Zealand fashion companies should be looking to export to Australia. It's our nearest and most significant market and has the benefit of sharing the same seasons and similar lifestyle, so New Zealand fashion converts well here," she said.

Fashion Industry New Zealand chief executive Mapihi Opai said showing at international fashion week events worked well as part of a multi-tiered approach to develop export markets. And, that success depended on "mutual appreciation" between the designer and the buyer. "Fashion buyers and media are looking for the 'right' designers and vice versa, and the chemistry is unique to each individual," she said.

Even though World was working to build its export base, New Zealand remained a big focus for the company where its three retail stores were still its bread and butter.

 Francis Hooper (World) Picture: Nigel Marple for The NZ Herald

Fashion cash-registers ringing
FINZ Coverage: TVOne
News 19 October, 2005

Simon Dallow (presenter): “Fashion Week has been going for five years now and the catwalk continues to drive the cash registers. The event generates around $23 million a year and even the smaller players are talking big bucks.” Sharon Fergusson (reporter): “The glamour, the fame, the money - for many, Fashion Week has become an essential part of their business.” Annah Stretton (designer): “Financially, it would probably be about 30 per cent on our turnover, so it has been huge for us.” Sharon Fergusson (reporter): “Annah Stretton works from the Waikato town of Morrinsville, supplying 150 outlets around the world.” Mapihi Opai (Fashion Industry New Zealand): “The designers selling to around 100 stores in Australia are often the ones that slip under the media’s radar.” Sharon Fergusson (reporter): “Many small businesses in the exhibition tent are back at Fashion Week this year in the hope of generating orders similar to last time.” Les Taylor (Alpine Furs): “We had a $100,00 order, so it was well worth it. But, this year, we’ve had little bit of interest, but not much.” Carla Watson (Imprint): “It was a few - a couple of really big orders for us and a lot of small stockists throughout the country.” Gaylene Hood (Women Limited): “It was so good that we’re starting our own business opening a new shop in Wanganui.” Sharon Fergusson (reporter): “And, those aiming for international interest have found many of their foreign buyers over the past four years at New Zealand Fashion Week.” Annah Stretton (designer): “We’ve got a huge business in Australia now, we’ve got over 80 accounts, and very strong business through Dublin, London and Europe.” Sharon Fergusson (reporter): “Although Australia and Europe are well represented here, this year the organisers have been part targeting the Asian Pacific region. So outfits like Taiwanese TV, Guangzhou TV from China and Japanese Vogue are here for the first time. They’re amongst about 300 media delegates - that’s more than ever before.”

Does the bling turn to bucks
FINZ Coverage: Headliners (TVOne)
18 October, 2005

Ruwani Perera (reporter): If you though New Zealand Fashion Week was all about frocks, you’re mistaken. The four-day event hinges on an all important relationship between designer and buyer. Mapihi Opai (Fashion Industry New Zealand): You’re entire world isn’t going to change as the result of one week, but it will start to change if you follow-up all of those leads. This is the place where valuable connections are made. Ruwani Perera (reporter): Nicole Bargwanna is a buyer for a luxury label boutique in trendsetting Tokyo, Nicole Bargwanna (Buyer): We stock Balencia, Yves Saint Laurent, Fendi, very high level designers, but we like to put in a couple of very edgy, young, no so well known designers to balance that out. Ruwani Perera (reporter): So she’s come here hopeful of adding Kiwi labels to that list. The business of fashion generated over [50 million dollars] in exports this financial year. But the benefits can take a while to materialise. Mapihi Opai (Fashion Industry New Zealand): Growth in this industry does take time. Buyers need to get know your product....get a feeling for where it’s going to fit. And, they need to know that you can deliver. Claire Kingan-Jones (designer): So if you’re looking for business it needs to be good business and it has to be business that we can do well. Ruwani Perera (reporter): Australia counts for 71 per cent of our total exports. Kate Sylvester (designer): Australia is definitely our biggest market by a million miles - it’s just unstoppable at the moment. Ruwani Perera (reporter): Major Australian department store Myers, were to have sent out buyers to attend this year’s event for the very first time. While established designers like Kate Sylvester have an ongoing relationship with the store, it’s a blow to new talent. Kate Sylvester (designer): For us them coming over it was more of a PR exercise and it would have been great to have them here. It will be a disappointment for younger designers who would have had the chance to show what they can do. Ruwani Perera (reporter): It’s a crowded scene where business savvy is necessary for survival.

Style Pasifika awards preview
FINZ Coverage: Headliners (TVOne)
2 September, 2005

Renee Wright (presenter): In 12 years, the Style Pasifika awards have gone from a celebration of purely Polynesian arts and culture to something that’s a lot more reflective of New Zealand Society. As Ruwani Perera found out, the country’s largest fashion awards are making changes on stage and off... Ruwani Perera (reporter): This is the look of Style Pasifika 10 years ago, but you won’t find too many pulatafi like this in today’s competition. It’s not just reflective of the clothes, different cultures are breathing new life into the event. Francis Hooper (World): The Kiwi generation of our migrant communities still have their strong cultural roots, but they’re Kiwi educated and part of New Zealand culture, and now they’re commenting through their entries. Ruwani Perera (reporter): Home grown creativity has always been central to the competition. Charmaine (previous Style Pasifika winner): That’s the beauty with the Style Pasifika awards, there are no limits to the creativity - you can just be really expressive in what you’re wanting to showcase. Ruwani Perera (reporter): For one judge, the more ‘out there’ the better. Francis Hooper (World): I’m always excited by seeing something new and different - whether it’s commercial or avant garde. Ruwani Perera (reporter): ‘Out there’ or not, you’re still more likely to see these garments on the street than the not so wearable Wearable Arts Show. Francis Hooper (World): People will spend 10,000 hours on the flower of a headpiece in the Wearable Arts and it will weigh 50 pounds, and you think hhhmmm. Ruwani Perera (reporter): A win for one of these outfits will mean more than just a trip for two to Tahiti. This year there’s a much better incentive for the supreme winner - a mentoring scheme that plugs fledgling talent directly into the industry. Mapihi Opai (Fashion Industry New Zealand): If you’re looking to be an entrepreneur in the business of fashion, creative flair alone just isn’t enough. That talent has to be backed-up with business acumen, industry experience and an understanding of the fashion market in general. Ruwani Perera (reporter): Over 230 entries were narrowed down to just 100 garments. Tonight’s winner creating much debate among the six judges. Francis Hooper (World): It wasn’t obvious, because there were so many good finalists. It wasn’t easy judging, it wasn’t like ‘that’s the one’. Ruwani Perera (reporter): There can only be one and he or she will find out tonight.

China imports helped Pumpkin Patch
FINZ Coverage: The Dominion Post
18 August, 2005
PAM GRAHAM

Pumpkin Patch is in no hurry to open stores in China and is happy with its first store in the United States, according to design and development manager, Carly Tolley. The listed children’s clothing retailer has opened one store in the US and has four more planned. It has built a business on importing product from China, but has no immediate plans to export there if New Zealand secures a free-trade deal with China.

Ms Tolley told an audience at a Fashion Industry New Zealand Breakfast Forum that she did not expect a free-trade deal between New Zealand and China would affect Pumpkin Patch. The fashion industry is concerned that a free-trade deal will be a blow to clothing manufacturers in New Zealand who survived reform of the economy by developing strong brands.

Ms Tolley said Pumpkin Patch produced 15 million garments a year, about one million of which were made in New Zealand. “The ability to import is what has helped us to export,” she said. The company was having some problems getting garments into the British and US markets because of quotas on Asian goods, but saw that as a short-term problem.

Ms Tolley said Pumpkin Patch had concentrated on expanding in markets with similar fashion tastes. Australia has been an easy market to enter. Britain had been harder, but the company was starting to make ground there and it had entered the US market. “Our first store has been going really well,” Ms Tolley said. The company has no plans to open stores in China in the short-term.

Pumpkin Patch started as a mail order business, which built a client base to support the opening of retail outlets. It has a strong design focus and it shopped for designs at the best design houses in the world. New ranges were sold in New Zealand and Australia first. “We’ve found that what works here works overseas,” Ms Tolley said. The company realised early on that the origin of a garment had little impact on consumers. What mattered was having the right product at the right price.

Fashion firms swap trade ideas
FINZ Coverage: The Dominion Post
13 August, 2005
PAM GRAHAM

The remnants of the clothing industry that survived tariff reductions for 20 years has met to swap ideas on the challenge a free trade deal with China represents. “New Zealand could not have remained a small protected market,” Fashion Industry New Zealand chief executive, Mapihi Opai, said this week. A proportion of the industry survived and it would continue to do so, she said. “A decade ago, it was labeled a ‘sunset industry’ and pretty much laid to waste. How it is perceived now is quite phenomenal, but there is still more work to be done yet,” she said.

Fashion Industry New Zealand (FINZ) hosted a breakfast forum this week, at Auckland’s Northern Club, on the flow-on effects of free trade and the industry’s future options. It also held a fashion education conference. Speakers from Pumpkin Patch, the successful listed children’s fashion retailer and manufacturer, and Hart Manufacturing, a private company that produces the Vamp, VSSP and Vertice branded clothing, contributed their views to the forum. They still produce garments made in New Zealand.

A recent study from FINZ found that New Zealand fashion and apparel related businesses view the country’s impending free trade agreement with China as a significant threat to the industry. Sixty-three percent of businesses surveyed indicated a high degree of concern that the agreement would lead to increased competition with Chinese garments in the domestic market.

Pinpointing fashion's big worry
FINZ Coverage: Business to Business
1 August, 2005

China may be a threat to New Zealand’s fashion and apparel industries but an independent study finds the greatest problem is a lack of young people wanting to go into the field. Findings from the study, commissioned by Fashion Industry New Zealand Inc (FINZ), will help develop an industry-led strategic plan that is expected to be completed by October. Although the impending Free Trade Agreement (FTA) with China is a significant threat to local industry, other facets such as exporting to Australia leave it confident, says FINZ chief executive Mapihi Opai.

But few secondary school leavers are aware of non-design positions within the industry, or see them providing viable career paths. This is viewed as the greatest weakness in the industry. Technical skill shortages affect the industry’s biggest players. Pumpkin Patch Ltd design director, Chrissy Conyngham, whose company produces more than 15 million garments annually, says, “We struggle and have to do all our training in-house. “There are a lot of technical requirements associated with production, especially when you’re manufacturing offshore. In some cases it’s like learning a new language, so you need people with good communication skills and a methodical approach to the job.”

The study criticises the tertiary sector, with 65 percent of those surveyed indicating great concern that the curricula of fashion schools are not satisfactorily aligned with industry needs. They say the system does not adequately prepare graduates for the realities of the workplace. “They seem to take a creative approach to design, but I worry about the lack of commercial grounding. There is a place in the industry for some graduates, but not for the numbers being produced,” says Conyngham, who heads Pumpkin Patch’s 30-strong design and support team. “What we do is interpret international trends and deliver them with a unique New Zealand twist to fit the market, which is no less creative and no less rewarding.”

Opai says these are issues that still need to be addressed collectively by all sectors of the apparel industry. “However, when you consider that this was labeled a ‘sunset industry’ a little over a decade ago, it’s clear that significant achievements have been made and we’re confident more can be made yet.”

The study shows 63 percent of those surveyed are very concerned the FTA will increase the competitiveness of Chinese made garments in the domestic market. Although the details of the FTA are yet to be disclosed, only 22 percent foresee export opportunities arising for New Zealand fashion and apparel as a result of these negotiations. “Getting good product placement in China would be a difficult marketing job and the logistics involved are challenging. China is huge and the overall costs associated with penetrating this market are prohibitive for many of New Zealand’s fashion and apparel businesses – particularly those that manufacture locally,” says Geoff Merz, an Auckland-based customs agent and director of Merz & Associates Ltd.

More than half of those surveyed are currently exporting and display a strong focus on high-end niche markets, with one in three identifying themselves primarily as ‘designers’. In terms of international trade, however, the focus remains close to home, with the long-term priority for 88 per cent being to increase export sales to Australia.

“The pioneering has been done. Australia is now viewed as an extension of the domestic market and still holds the greatest potential for New Zealand’s apparel exporters,” says Susie Walker, design and marketing manager for Hart Manufacturing – one of the country’s largest fashion exporters. “Australia is accessible. We speak the same language, enjoy a parallel lifestyle and share similar demographics. Market information is easy to obtain, the retail environment and terms of trade are the same, and our close proximity allows for immediate communication and distribution.”

According to the study, the New Zealand apparel industry’s greatest strength is its short-run production capacity and associated high-level of adaptability. Opai says, “In the long-term, most of those surveyed want to continue manufacturing in New Zealand. They believe that the country’s short-run apparel manufacturing infrastructure needs to be protected and strengthened.”

The study shows the industry remains optimistic in its outlook, with 62 percent of those surveyed strongly emphasising the need for New Zealand apparel businesses to focus on finding ways of capitalising on export opportunities rather than dwelling on the negative aspects of free trade. For example, 54 percent view trade negotiations with the US hold significant export potential. New Zealand’s attractiveness as a tourist destination was also highlighted. “New Zealand’s tourism sector is seen as providing the greatest opportunities, in terms of capturing more tourist dollars and participating in international promotions. This is closely followed by the desire to capitalise on the success of New Zealand’s film industry,” says Opai.

The industry is confident that New Zealand designers are as good as any in the world, with fashion and apparel having gained a strong international reputation – something that has been facilitated by Air New Zealand Fashion Week.

Potential China deal dents optimism
FINZ Coverage: The Press
12 July, 2005
COLLEEN SIMPSON

New Zealand’s fashion industry is brimming with confidence despite the threats presented by the imminent free-trade agreement with China. An independent survey of 100 fashion and apparel firms released yesterday indicated the industry was bullish about its future, but was worried about the impact of a tie-up with the Asian giant.

Mapihi Opai, chief executive of Fashion Industry New Zealand (FINZ), which commissioned the research, said the confidence had evolved after years of hardship during which many businesses fell by the wayside. “I think there’s a really strong sense of confidence among the fashion sector and that’s something that comes with experience.”

Christchurch’s Park Avenue Fashions owner, Fiona Cox, buys from local designers whenever she can, but sometimes, in order to give clients the items they wanted, she has to import from Australia or beyond. “As far as I am concerned New Zealand made garments are always going to outclass the Chinese manufactured ones,” she said.

Although domestically made garments were generally more expensive, Cox said a market existed where clients often willingly paid more for a special occasion. “If they are the mother of the bride or groom, they’re always going to want to look special and they’re happy to pay for it,” she said. In 13 years in the business, Cox said she had noted a huge upswing in home grown talent, enough to make her confident Kiwi designers could cut it on the world stage. “I’ve seen really, really good growth in the number of top designers,” she said. “I’ve even seen it from kids coming straight out of polytech.”

More than 50 percent of respondents to the Fashion Industry New Zealand Study were exporters, many concentrating on high-end markets. But, while many industry participants are selling offshore, 88 percent say their long-term goal is to boost sales across the Tasman.

Auckland’s Hart Manufacturing design and marketing manager, Susie Walker, said pioneers had already cracked Australia, which was now largely considered an extension of the domestic market. “Australia is very accessible. We speak the same language, enjoy a parallel lifestyle and share very similar demographics,” she said. “Market information is easy to obtain, the retail environment and terms of trade are virtually the same, and our close proximity allows for immediate communication and distribution.”

While worries about China were widespread, respondents said the industry’s chief weakness was that too few school leavers were being attracted into the industry, exacerbating an already severe skill shortage. Pumpkin Patch design director, Chrissy Conyngham, said the company, which makes more than 15 million garments annually, had to do all of its training in house.

New Zealand fashion industry's strengths & weaknesses exposed in an independent study
FINZ Coverage: ASB Business (TVOne)
11 July, 2005

Michael Wilson (presenter): The strengths and weaknesses of the country’s fashion industry have been exposed by an independent study commissioned by Fashion Industry New Zealand. The study, which also analysed the wider apparel industry, has identified the opportunities and threats posed in the current business environment. And, feedback proved strongly negative on the prospect of Free Trade with China. The chief executive of FINZ, Mapihi Opai, joins me now. The overall confidence of the industry...what were your findings? Mapihi Opai (Fashion Industry New Zealand): The industry is very buoyant. Five years ago, there was a general lack of confidence in regard to taking on the world beyond Australia. Now, companies want to find ways of capitalising on opportunities rather than focusing on the negatives associated with Free Trade. Michael Wilson (presenter): If we look at a key Free Trade Agreement for the industry - that with China: what are the concerns there? Mapihi Opai (Fashion Industry New Zealand): “There are two sides to the issue. One being potential export opportunities and the other being the potential impact on New Zealand’s manufacturing infrastructure. Only 22 percent felt that there are opportunities in the Chinese market for New Zealand fashion and apparel, due to the general size of businesses and their limited resources. Basically, it was seen that the cost of marketing and logistics associated with that market are prohibitive for most businesses. On the domestic side, you have flow-on effects associated with the increased cost competitiveness of Chinese garments...the fact that it might cause further erosion of our infrastructure. A report by Infometrics for the Ministry of Economic Development stated that apparel would incur the greatest losses in a Free Trade environment...potentially suffering loses in output of around eight percent. Michael Wilson (presenter): Australia, I gather, is seen as the key in many ways - particularly for export growth... Mapihi Opai (Fashion Industry New Zealand): Australia is our closest market and a sizable one. It’s basically seen now as an extension of the New Zealand market. It also plays an important role in the industry as a kind of training ground for export. Incremental growth is preferable...for businesses to cut their teeth on a similar market in close proximity before they attempt to take on the rest of the world. Michael Wilson (presenter): I see that there is some confidence that a Free Trade Agreement with the US might be beneficial... Mapihi Opai (Fashion Industry New Zealand): Yes, and for very similar reasons. New Zealanders are familiar with American culture...a lot of it filtering through via mass media. Culturally, we have very strong ties in this country with the UK and US, and those are the Northern Hemisphere that we’re generally most comfortable with. Michael Wilson (presenter): What about training and skills, and attracting the right people into the industry? Mapihi Opai (Fashion Industry New Zealand): It’s a big issue for the apparel industry. Obviously, we have a generation gap, having suffered significant job losses from the mid-1980s onwards, as the result of tariff reduction and the removal of import licensing. Generally, the feeling is that there’s a lack of alignment. At the moment, the tertiary education sector is focusing very strongly on design, but that needs to be grounded by business acumen, commercial understanding and some real manufacturing know-how. Michael Wilson (presenter): Thanks very much...that’s Mapihi Opai from Fashion Industry New Zealand.

Fashion industry wary of China FTA
FINZ Coverage: The National Business Review
11 July, 2005

A new study shows relatively high levels of confidence within the New Zealand fashion industry, despite concerns about the impending China FTA and a lack of skilled industry workers. Commissioned by Fashion Industry New Zealand Inc (FINZ), the independent study showed fashion and apparel related businesses view the country’s impending Free Trade Agreement with China as a significant threat to local industry.

Sixty-three percent of those surveyed indicated a high degree of concern that the FTA will increase the competitiveness of Chinese made garments in the domestic market. Only 22 percent see export opportunities arising from the FTA. "Getting good product placement in China would be a difficult marketing job and the logistics involved are challenging. China is huge and the overall costs associated with penetrating this market are prohibitive for many of New Zealand’s fashion and apparel businesses - particularly those that manufacture locally," said Geoff Merz, an Auckland-based customs agent and director of Merz & Associates Ltd.

The concerns do not reflect a lack of export nous. More than half of those surveyed are currently exporting and display a strong focus on high-end niche markets, with one in three identifying themselves primarily as ‘designers’.

Australia a developed trade market In terms of international trade, however, the focus remains close to home, with the long term priority for 88 per cent being to increase export sales to Australia. "The pioneering has already been done. Australia is now viewed as an extension of the domestic market and still holds the greatest potential for New Zealand’s apparel exporters," said Susie Walker, design and marketing manager for Hart Manufacturing. "Australia is very accessible. We speak the same language, enjoy a parallel lifestyle and share very similar demographics. Market information is easy to obtain, the retail environment and terms of trade are virtually the same, and our close proximity allows for immediate communication and distribution."

U.S a positive Comparable to attitudes about Australia and in contrast to attitudes towards a China FTA, 54 percent view trade negotiations with the U.S as holding significant export potential. According to DHL Express general manager, Phil Rountree, these findings were also evident in the recent DHL Export Barometer - a large-scale evaluation of export confidence within New Zealand.

Production skills a problem One problem confronting the industry is the lack of skilled, informed workers, far too many of whom are being turned out with a focus on design rather than production. "In the long-term, the majority of those surveyed want to continue manufacturing in New Zealand and believe that the country’s short-run apparel manufacturing infrastructure needs to be protected and strengthened," said FINZ CEO, Mapihi Opai.

But too few secondary school leavers are aware of non-design related positions within the industry, or see them providing viable career paths, something that may be the industry's greatest weakness. Technical skill shortages, in particular, affect even the industry’s biggest players. "We really struggle with it and have to do all of our training in-house. There are a lot of technical requirements associated with production, especially when you’re manufacturing offshore. In some cases it’s a bit like learning a whole new language, so you need people with good communications skills and a really methodical approach to the job," said Chrissy Conyngham, design director for Pumpkin Patch Ltd, which produces more than 15 million garments annually.

The tertiary sector also attracts some criticism in the study, with 65 percent of those surveyed indicating a high degree of concern that the curriculums of many fashion schools are not satisfactorily aligned with industry needs and that the system fails to adequately prepare graduates for the realities of the workplace. "They seem to take a very creative approach to design, but I worry about the lack of commercial grounding. There is a place in the industry for some of these graduates, but not for the numbers currently being produced," says Ms Conyngham, who heads Pumpkin Patch’s 30-strong design and support team. "What we’re doing is interpreting international fashion trends and delivering them with a unique New Zealand twist to fit the market, which is no less creative and no less rewarding."

According to FINZ CEO, Mapihi Opai, these are issues that still need to be addressed collectively by all sectors of the apparel industry. "However," she said, "when you consider that this was labeled a ‘sunset industry’ little over a decade ago, it’s clear that significant achievements have already been made and we’re confident that more can be made yet."

Overall confidence good The study shows that the industry remains optimistic in its outlook, with 62 percent of those surveyed strongly emphasising the need for New Zealand apparel businesses to focus on finding ways of capitalising on export opportunities rather than dwelling on the negative aspects of free trade.

So Hot!
FINZ Coverage: The New Zealand Listener
9-15 April, 2005 (Vol 198/No 3387)
GORDON CAMPBELL

She sells to the stars, but how hard is it to be a New Zealander designer like Trelise Cooper? Sure, fashion can be frivolous. According to the culture historians, though, it is also a mobile, ever-changing reflection of who we are, and the times in which we live. Just ask Trelise Cooper. When she was starting out as a designer in 1997, she says, New Zealand fashion was dark, intellectual, and solid: "If anything, our fashion was a bit like the films that we were making at that time. Once Were Warriors, The Piano … and it still is."

One of the circuit breakers in her success story has been her extravagant use of colour. Initially, that palette had seemed perilous. "I remember [industry consultant] Paul Blomfield once saying to me that we were all waiting for you to go bankrupt, Trelise, with all those colours." Hah. These days, all those colours have helped create a Trelise Cooper fashion empire with an annual turnover of around $12-15 million, with a reach far beyond New Zealand's dark and intellectual shores.

She's still putting in the hours, though, even now. Cooper has been hard at work on her spring and winter collections (for the US) and has just returned from a blitz of promotional showings for buyers in Australia. Four shows in one week, she says wryly. "That may not sound like much, but each has its own looks, its models …" She still seems driven, and teemingly prolific. At any one time, she estimates, there are some 50,000 separate Trelise Cooper fashion items in circulation, worldwide.

Trelise Cooper, Karen Walker, Zambesi, Nom D … a lot of young hopefuls with pins in their mouths and stars in their eyes are now pouring into design schools and fashion incubators, seeking to emulate the success of our top names. Quite a change. Ten years ago, the local textile, garment and footwear sector looked more like roadkill – a hapless victim of the free trade policies that had sent a tidal wave of cheap Asian imports crashing onto the market. Local firms either learnt to swim with the tide, or got out.

Although still in fragile condition, the remnants of the industry have won some friends. The incoming Clark government placed a freeze on tariff cuts, creating a breathing space due to expire on July 1 this year. Instead of seeming to be on its deathbed, the entire sector was decreed to have potential to become a $1 billion export earner by 2008, with high fashion as its leading edge. More than once, Prime Minister Helen Clark has touted the fashion industry as being one of those creative, value-added industries that the country needs to be fostering.

All well and good, suggests Mapihi Opai, chief executive of Fashion Industry New Zealand (FINZ), but the glitz can be deceptive. "It's an industry based on image. Externally, there has to be a certain sense of finesse or gloss. But behind that facade, it's not as glamourous in the every-day as people would expect." Designing great clothes, in other words, is only part of the story. Getting those clothes made at affordable cost is a far less attractive process. Low wage rates are prevalent. And that's a barrier, in some cases, says Opai, to recruiting young people willing to learn the essential skills of being, say, machinists and cutters.

Cooper, for her part, is too savvy to be starry-eyed about the realities further down the fashion food chain. So, what was she like at 25 – the same age as many of the young designers that she now inspires? "At 25 … well, at 23 I knew that I wanted to design clothes …" She spent the rest of her twenties in retail, running stores in Wellington and Auckland that bore her name. "Then I burnt out, and went off to raise children." Cooper returned to the fray in 1997, with a lot of rag trade experience under her belt. To ensure uniqueness, she buys large minimums of the fabric runs she uses – if necessary, buying up multiple colours of the same pattern. People think that she gets the fabrics cheap from her husband's importing firm, she says, but that's not so: "It's strictly professional."

The rest is all a bit of a balancing act. These days, some 80-90 percent of the New Zealand apparel industry's raw materials are imported from Asia and Europe. Most garments are also being made offshore, mainly in factories in China. "We've been left with a very small pool of high-quality manufacturers," says Jeremy Moon of Icebreaker, the highly successful (annual turnover, he says, is now $30 million) outdoor clothing company, "and all of them are, on a global scale, micro." The future role of local garment-makers, Moon feels, is clear. "It's small-run, high-quality specialist product. Or medium-run specialist product for the local market. With quick turnarounds. But it's not high volumes for the export market. We can't compete on that … not with the dollar where it is now." Within two to three years, once he has tested enough reliable offshore suppliers, Moon's plans envisage 80 percent of Icebreaker product being made overseas.

Cooper is no exception to these trends. Many of her clothes are made up in China and India – the intricacies of the bead work, she explains, are best done in India. Ensuring quality control at a distance, she agrees, is a concern. There is no time to correct mistakes in an industry always working against the clock. To make things even trickier, Cooper's signature style often involves sew-ons, and the playful mixing of different fabrics. Cooper does everything she can to ensure that her customers get the quality they are paying for. Prototypes, for instance, are created to ensure the clothes will work as designed. The fact that New Zealand is a very small player, located at the very end of the world's shipping routes, doesn't help matters: "I fly in everything," Cooper says. "I have to fly it in, to meet deadlines."

The pressure comes with the territory, and Cooper sounds unflappable. Recently, she sold 40 of her pieces to Hollywood star Reese Witherspoon, but, hey, no big deal. She has also just finished dressing Canadian singer Sarah McLachlan. A buzz, she admits, but peripheral to business as usual, thank goodness. "One real advantage of living down here … is that you don't have to do the Hollywood thing. You don't have to be out there, competing on that level."

At the end of the day, her clothes are expensive. On one Internet posting for instance, someone called Johanna complains that buying a Trelise Cooper shirt – even in a sale – almost broke the bank. "Her clothes are the best I've ever seen," Johanna laments, "but why are they so expensive?" Oh dear, dear. "I wish I could answer her," Cooper responds. For starters, there's the fabric, never less than $25 a metre. The cost of making the garment, the air freight, the buttons at 10 cents apiece and 30 or more per garment … And she does do her best on the prices: "I don't know whether I should tell you this, but [in her retail outlets] there's not a 100 percent mark-up." It all adds up, she concedes. So it does, all the way to the bank. And her advice to anyone just starting out? "Learn to eliminate your mistakes. You will make them …" To err once is human. To err twice, she believes, is a sign of sloppiness in the system. Even for her, it seems, it is not easy being Trelise Cooper.

As if designing great clothes wasn't hard enough. In Dunedin, young designer Juliet Fay, 28, has taken the plunge and opened a store – Aduki, named after the little red bean – to showcase and sell her clothes. Since October, she's signed up four stores around the country to stock the Aduki brand, and she talks of opening a small shop in Auckland, perhaps by the end of next year. Just to test the waters. By way of inspiration, Fay cites some graffiti that she found in an alley across the street: "The World Is My Canvas." She has written that up inside her store.

In times gone by, Fay would have learnt the ropes in the garment industry and eased her way into her own design business. That infrastructure is now all but gone, taking the old career path with it. These days, talented people like Fay emerge from the design schools and fashion incubators facing a steep learning curve. They not only have to create great designs, ensure quality control at affordable cost and establish their brand. Simultaneously, they must learn how to run a small business and manage their cash flow through the seasonal cycles, with all their related fluctuations in production and demand. It's a jungle out there. About 70 percent of the industry is comprised of firms employing two people or fewer. "You," Opai says, "are your own career path."

Fay employs four people, including two regular outworkers. She has identified the Aduki niche: below the cost of high-end fashion, but higher quality than Glassons or the other chain stores. She's doing well. "Where we're headed now is to take it out to CMT [Cut, Make and Trim] operators, for the T-shirts and things like that. We're getting such big orders, we just can't be doing all the finishing and stuff now. And that's kind of scary, because you do want to make sure your quality is of very high standard." Quality control, as always, is the nightmare. By the time you unpack the goods and find the labels have been stitched onto the wrong side, it's too late.

Currently, the local industry is still an essential skills and supply platform for high-end fashion. But the machinists and cutters are getting old, and Fay has noticed the skills gap looming, especially in the 25-45 age group. The trickle-down effect of people "knocking off" copies from overseas catwalks is also hitting local designers a lot faster. "My worry is that we could be forced into getting our manufacturing done offshore. I don't really want to do that." Maybe, she says hopefully, it will come down to brand positioning. Maybe she can charge more, and subsidise the higher cost of manufacturing in New Zealand.

A more likely outcome? More firms – such as Icebreaker is doing – will shift their garment-making offshore. China, however, poses as many threats as it offers solutions. Very soon, it may cease to be an option that we can access on terms that we control. On January 1 this year, quotas came off textiles, worldwide. For New Zealand, the worrying outcome is that huge US and European orders – of 60,000 items a month – are now pouring into the same Chinese factories that we need to access.

Geoff Merz, a Customs broker and freight forwarder for the fashion industry since 1981, sees the likely fallout: "New Zealand – and Australia as well – is pissant business for the Chinese. They don't want to be making 600 and 300 units. They like those big bulk US and European orders. At the moment, we think we can dictate what we want." In future, at every stage – from fabric choice to manufacture – our options out of China seem destined to shrink. "The mills making those fabrics won't be interested in doing anything on those small runs."

The risk is that New Zealand will be shunted down to third and fourth level Chinese factories, with obvious implications for quality control. Doesn't that mean our companies need to create joint ventures, and piggyback on the Americans and the Europeans? "It should," Merz says, laughing grimly, "but we're very parochial about piggybacking on … We're very individualistic."

Freight costs in and out of China are also escalating. New Zealand is a small customer, situated at the end of the supply chain. "Our rates for a container out of China were $US1000," Merz says. "At the end of last year, they were $1850 and, by the end of this year, they will be $2650. The ships are full coming in and going out [of China]. The services are stretched, there's a fight on for space, and it's just as bad out of Australia as it is out of here."

Logically, any bottlenecks in China should create opportunities for the local industry. Yet extremely tight margins operate in the world of local CMT operations. As Clothing Workers union organiser Robert Reid explains, the break-even point for local manufacturers bidding for contracts is 41 cents a minute, based on prevailing estimates that workers operate on average at 75 percent levels of efficiency – due to their varying skills, lunch breaks, sick leave, etc. From the resultant hourly rate of around $17.80, the owner has to pay the worker, non-productive supervisory staff, staff bonuses, energy costs and other overheads.

Such margins are not consistent with rosy images of a glamorous, value-added industry. At his Soma President factory in Napier, Harold Trigg employs 50 staff on work that spans the entire spectrum: the chain stores, merino work for Icebreaker, and the iconic fashion designers, as well as serving tourism outlets and Maori enterprises that don't want to see "Made in China" labels on their T-shirts. The high-end fashion designers? "There's no money in that," Trigg says, "not for us. While it's nice to make for them and they're a good vehicle for advertising the facility, it's not a productive run." Simple garments in volume bring in more money than the labour-intensive, small-run fashion jobs. As Reid says, the politicians may like to talk about added value, and about moving the local industry away from T-shirts that can be made for $2 in Singapore. Yet ironically, he points out, local firms can still make more from those T-shirts – up to a 50-cent-a-minute rate – than they can from high fashion garments where the labour input required is rarely rewarded.

So with high fashion garments, the added value is being captured high up on the food chain? "Very, very much so," says Trigg. "That is the forward face of the industry, but it's only a minuscule part. They have to project image out there and they've got high profile and they're pushing New Zealand as a creative place where we do things differently … but there's not big money to be made at our end." Less and less so. On occasions, Trigg claims to have been outbid by "underground" sweatshops working 12-14-hour shifts from moveable locations, via middlemen who buy yarn and materials in cash, and leave no audit trail. Really? "Yes. The company – and I'm talking about some quite respectable names – will say, no, I can get my Asian friends in Auckland at a better price than that." In some instances, says Reid, the underground is bidding at 36 cents a minute.

Finding out just how much high fashion earns for New Zealand is not an easy task. The industry lobby group Textiles New Zealand treats $306 million as the most reliable figure for the entire clothing, textiles and footwear sector during 2004. After excluding footwear and re-exports, the 55 percent remainder of "apparel exports" is worth $168.3 million, of which $143 million can be defined as "clothing" – which still leaves it anyone's guess as to how much of the clothing figure represents the earnings from designer fashion.

Further change may be nigh. New Zealand is busily negotiating a free trade agreement with China. Reid's concern is that an even faster timetable for tariff cuts may emerge from the FTA than the current timetable on which the sector has been basing its plans: which entails a review next year and a zero tariff situation by 2009, sooner than in Australia. To me, Foreign Affairs chief negotiator David Walker would only confirm that tariffs would not be on the agenda for the next meeting with the Chinese in May, and that "domestic sensitivities" were among the factors agreed to be guiding the entire process.

The industry, as Merz says, is in a fragile state. Yet, given what it has already gone through, a faster round of tariff cuts strikes him as being almost incidental. Susie Walker of Hart Manufacturing points out that a tariff cut on a $2 T-shirt or $10 shirt should make little difference. Neither should a further flow of Asian imports into our already saturated market. "I'm a supporter of local manufacturing," Merz says, "and I think it's a disaster that we've let it go this far. But I don't think there's any turning back …" The days when our mills would soak up female employment in the regions are over. Yet, the history of redundancies and closures, he argues, is one lasting reason why relatively few young Kiwis are choosing to devote a career to learning the skills involved. "Would you want to do a job for eight bucks an hour sitting behind a sewing machine? Nah. Kids today are not that interested … And that's a genuine concern at the end of the day – who is going to be there, driving the sewing machine?"

Someone in China? Perhaps, but China can only ever be a partial solution. Fashion needs the local industry. The need for immediacy, quality and small production runs all require a local industry to exist – but plainly, it cannot survive on the crumbs offered by the iconic fashion designers. Up at the other end of the process, the burnout rate among young fashion designers, Merz agrees, seems likely to be high: if only because their support systems are meagre, and thinly spread. The fashion incubators can only do so much.

The fittest, and luckiest, will survive. New Zealand does have a tendency to believe that 21st-century industries can somehow arise from a 19th-century battle for survival. "I think," says Mapihi Opai of FINZ, "that New Zealand has almost a trial-by-fire attitude to business. You have to prove yourself before you get any help. And, you have to kill yourself trying, before someone will lend you a hand." [picture: Listener.jpg]

The business of fashion
FINZ Coverage: NZ Business Magazine
October 2004
PATRICIA MOORE

New Zealand’s fashion industry is on a roll, but for individual designers looking to establish their label the way forward can be very difficult. October’s a big month for New Zealand’s fashion business. For one week, beginning October 18, our glamour industry and flourishing export success story, takes to the catwalks to strut its stuff in front of the world’s fashion buyers, media and commentators. It may seem like party time as the heavy players in the rag trade woo new business, and keep their existing customers excited by their latest designs - but at bottom it’s all about moving product.

Air New Zealand Fashion Week is the culmination of months, sometimes years, of toil for those chosen to show. This year organisers have announced a line-up of 43 participants. It’s a mix of old labels and new; all the country’s biggest names have committed to the event and, as Tony Milich of Sabatini puts it, for those in the industry it’s the opportunity to see “who’s going to rock this year.”

Export initiatives Fashion Industry New Zealand (FINZ), was formed two years ago to implement strategies that will ensure the long-term sustainability and future growth of the fashion sector and wider apparel industry. Chief Executive, Mapihi Opai, says FINZ views the profile and acceptance of New Zealand fashion, both nationally and on the world stage, as an indication that the industry is in a healthy state. “However”, she says, “New Zealand fashion is still relatively young and has reached a transformative stage in its development - one that holds significant export growth potential, but simultaneously presents a number of challenges to overcome and pitfalls to avoid.”

In spite of the recent upsurge of fashion labels and export success stories, Opai says it’s imperative that emerging designers gain a good depth of experience by establishing a strong domestic stockist base before they attempt exporting, because steep learning curves can result in poor performance. And, she says, it’s important that the hard-earned collective reputation of New Zealand fashion isn’t damaged by individuals who have not yet learned to market themselves or sell, produce and deliver garments at a professional level. “Which is why one of the key objectives of FINZ is to provide effective industry upskilling and networking opportunities for fashion businesses.”

Paul Blomfield is creative sector manager for the fashion, apparel, textile and footwear portfolio with New Zealand Trade & Enterprise. From his viewpoint, the industry is “pretty solid actually”. “It’s always hard in a business that has to reinvent itself every season, but I would say a lot of our leading design names are a lot stronger; you only have to look at the fact that many of them now have multiple stores, plus an expanding export market.”

So what sort of export earner is the fashion industry? Blomfield says it’s not easy to separate the value of ‘fashion’ exports from that of the wider apparel trade. “When you’re dealing with an industry that’s about mana and presence, impact and hype, it’s very difficult to get them to put on record exactly where they’re at.” Figures show the total apparel export industry is worth about NZ$260 million annually, says Blomfield. “A report I did in 2002 for the 2001/02 year indicated there was about NZ$40 million in exports coming out of our top designers. Since then, we’ve seen remarkable growth, but nobody’s measured exactly that segment. I’m guessing more like NZ$80-$100 million.” Blomfield says it appears that overall the volume of apparel exports is dropping, but the value is increasing. “What that reflects is that designers are doing more business and the basic, higher volume product has shifted to China.”

Tony Milich, managing director of Sonny Elegant Knitwear, is happy to discuss hiss company’s export success figures. Sonny Knitwear was established by Milich’s parents in the early-60s and operated successfully in the local market. But, by the late 80s it became clear to Tony that the only way the company would survive was by exporting. “We reinvented ourselves in 1991 with Sabatini, our export label. And it proved the right move. Exporting has kept us very strong. We’d be only 20 percent of what we are without exporting, because the New Zealand market is quite flat.” Milich says in the first few years, export earnings totalled around one to two million. “In the last six years we’ve done three, four, and now we’re doing nearly five.” Export is worth over 60 percent of sales and growth this year has been huge he says.

Claire Kingan-Jones is the director of RJC. This year, after a decade of manufacturing, wholesaling and establishing a market in Australia, which makes up 50 percent of her business, the company opened its first retail store. “You can’t stand still in this business,” says Kingan-Jones. “You have to keep going forward.” The irony, she says, is that people set up a clothing label because they love designing - not because they want to own a business. “But as the company grows and becomes successful you spend less and less time on design and more on management.”

Skills shortage But ‘going forward’ in the rag trade isn’t easy in today’s market. The removal of import licensing during the late-80s and subsequent reduction of tariffs, saw countless closures in the apparel industry and the loss of thousands of skilled jobs. Formal industry training such as apprenticeships disappeared. “It’s a very big problem,” says Milich. “Pattern-making, machining, pressing, cutting - these skills are particularly difficult to find. I wish we were producing more in those areas rather than the surfeit of people who want to be designers.” Milich adds that if people knew how much money they could make in those areas it may be a different story. But for now, for every one machinist here, you can get 15 in China. “And if a machinist is getting older and doesn’t want to work any more, how do you replace her?”

Kingan-Jones, a board member of FINZ, agrees the shortage of skilled staff is a hot issue, but she says it’s one the industry body is working on to minimise the impact. The ability to secure funding to capitalise on growth opportunities is also an issue. “Many fashion companies fund growth by reinvesting their profits,” says Mapihi Opai, “but this is a gradual process and one that limits their ability to react quickly and capitalise on opportunities as they present themselves".

She quotes the case of one designer who was approached by numerous buyers during New Zealand Fashion Week in 2003, but could only take on five new accounts. “They simply couldn’t fund any growth beyond that point.” Opai says it’s difficult for companies to secure external external lines of credit or attract investors, especially during those first three years when they’ve no record of consistent performance. “Fashion is often seen to be a high-risk investment due to the unpredictable nature of seasonal trends and shifts in consumer demand.”

Blomfield, while acknowledging the skills shortage is a problem, sees the biggest inhibitor to fashion exports as the export markets themselves. “By the time you export a garment to the UK or New York or Paris, because the duties and shipping costs and dollar exchange rates, agents margins, distributors margins, wholesale margins - you’re selling garments at the very pinnacle of those markets, up against the world’s top labels. It’s a real challenge for these people to be up against such design heroes.”

The effect of imports on the local industry is another significant issue, says Kingan-Jones. “Our margins are being squeezed by imports; we need to push the design and originality aspect of our garments.” The other side of that, she says, is the strong recognition and appreciation in recent years for New Zealand design, both locally and internationally. However, that vital international recognition comes only after the groundwork’s been done at home. And therein lies the problem for a brand new designer, says Blomfield. “Getting penetration into stores locally can be very, very difficult. There are very few stores to sell to and there are a lot of designers trying to sell into them. I like to see designers actually establish a presence for themselves - have their name above the door. A shop these days is your advertisement.” He points out that some leading designers started with a market stall. “People actually discover what they can make and how ell it sells. If you’re not designing clothes that sell you’re not going to make it. Remember, it’s a business, not just an aesthetic pleasure.”

“The saying ‘you’re only as good as your last range’ covers not only design but quality, delivery and sell-through,” says Kingan-Jones. “The glamorous moments are short lived. It’s extremely hard work and can be very tough financially.”

Designers being taught how to woo offshore buyers
FINZ Coverage: TVOne News
13 July, 2004

Presenter (Judy Bailey): Young New Zealand designers are being taught how to woo offshore buyers already queuing up for Fashion Week in October. Industry experts are touring the country to give designers the skills they need to help fill orders. Reporter (Karen Rutherford): They’re discerning, even downright fussy, and they have a right to be. International buyers attending Fashion Week are our ticket to the world. Joanne Meisner (Sydney fashion buyer): It happens very often where I’ve been wowed on a catwalk and then, coming to a collection, been totally disappointed. Reporter (Karen Rutherford): But no more...New designers are downing tools this week to attend workshops aimed at better preparing them for Fashion Week. Susie Walker (Fashion Industry New Zealand): It’s not just a matter of putting on a great show at Fashion Week and being a fabulous designer. It’s a matter of being able to actually follow through with delivery and maintaining good market share. We have a huge talent base in New Zealand, but need to build on that business experience. Reporter (Karen Rutherford): Knitwear label Insidious Fix is one keen to learn more. Designer Kylee Davis knows too well the importance of getting in the face of busy buyers before Fashion Week and following that through. Kylee Davis (Insidious Fix designer): Whether we like it or not, we’re being compared to international designers and we really need to pick up the pace. Reporter (Karen Rutherford): Beyond that there’s the need to manufacture smarter to get delivery times down pat and to better understand markets like the UK and Europe. Pieter Stewart (New Zealand Fashion Week): By the time they add freight, duty and the mark up that’s required in those countries, it makes our garments very expensive, so it’s important that designers understand the difficulties of each market and understand what buyers are expecting to see when they come here. Reporter (Karen Rutherford): And that’s not just a slick show, but the ability to stitch up the business end of the deal as well. Karen Rutherford, One News.

Designers get the low-down on Fashion Week
FINZ Coverage: Newstalk ZB
12 July, 2004

Geoff Robinson (presenter): New Zealand Fashion Week continues to attract more and more overseas interest, but there’s some concern in the industry that up-and-coming designers aren’t making the most of the showcase. This year, for the first time, workshops are being run so designers can get the low-down on how to brand, sell and market their products before they hit the catwalk. FINZ’ DHL Designer Workshops are being held in the four main centres starting in Auckland today. Jane O’Loughlin reports. Jane O’Loughlin (reporter): Making a name for yourself in the fashion world is about more than running up pretty dresses. Emerging designers might have great designs, but not the business acumen to sell them properly. The chairperson of Fashion Industry New Zealand (FINZ), Susie Walker, says that’s where the workshops come in. Susie Walker (Fashion Industry New Zealand): That’s why we’re trying to get people that have been in the industry for quite a while to mentor them and say right, you know, can you cope with an extra NZ$100,000 increase in sales or can you cope with an extra NZ$1 million increase in sales. Do you have the machinists available to produce the goods? Do you have the capital to bring the product in? Jane O’Loughlin (reporter): Susie Walker says that securing sales is no good if the designers can’t produce for the retailers. Susie Walker (Fashion Industry New Zealand): Retailers are actually almost punting sometimes with a new designer, because they’re giving them open to bar, they’re giving them dollars, they budget for their following season and so they need to have an assurance they’re going to get that product in store otherwise the retailer actually ends up being the person that misses out all round. Jane O’Loughlin (reporter): Paul Blomfield is fashion sector specialist at New Zealand Trade & Enterprise. He says that for New Zealand designers to cut it in the international market they have to meet some pretty high expectations. Paul Blomfield (NZTE): It would surprise many people to know that by the time a new zealand garment from someone like Zambezi ends up in store in somewhere like London...by the time we’ve paid the duty, the freight, and the other taxes that are involved it’s selling for the same price as designers like Margella and Chanel. So you’re talking about New Zealand product not only having to, you know, sell at the high-end of the market, it actually has to achieve the highest end and that’s sometimes a scary thing for these designers when they first look at what their prices are going to be in the market. Jane O’Loughlin (reporter): Mr Blomfield says there’s a number of challenges involved in tackling the export market. Paul Blomfield (NZTE): Probably the trickiest one is actually establishing an agent in a foreign market and, secondly, getting your pricing right. it’s difficult to price into export markets whether you’re selling, you know, meat or whether you’re selling wool or anything, you know, and fashion is no less the case. If you’re selling into the US and you price your product incorrectly...Let’s say the dollar moves against you or your raw materials come in too highly priced or the retailer doesn’t pay you quickly enough, those are the kind of things that can knock over any business in any market. Jane O’Loughlin (reporter): Mr Blomfield says the seminars starting this week will be a way for those more experienced in the business side of the fashion industry to pass on some of their knowledge and organisers hope the results will be seen when the clothes hit the catwalk during Air New Zealand Fashion Week in October. This is Jane O’Loughlin.

FINZ Columns

Connecting education and business
FINZ Column: Australian & New Zealand Apparel
June 2006
MAPIHI OPAI

The apparel industry has undergone enormous change over the past 20 years and so too has the tertiary education sector, with both responding to new policies, technology, global influences and, of course, each other. At a recent meeting of the Trans-Tasman Business Circle, Secretary for Education, Howard Fancy, told corporate leaders that “the education system has a critical role to play in building tomorrow’s workforce and upskilling today’s”. Future advances, he noted, stem from strong relationships between business and the education sector.

It’s a principle very much at the forefront for Fashion Industry New Zealand (FINZ) as it prepares for its fourth annual education conference (August 10-11, Christchurch) – a two-day event initiated to facilitate communication, understanding and co-operation between the education sector and apparel industry. This year’s theme – “The Commercial Environment” – aims to help education providers better prepare graduates for the realities of entering industry workplaces or challenges posed in launching their own small enterprises. In addition to speakers from industry and government, the programme for the 2006 FINZ Education Conference will feature an industry panel discussion (highlighting changing skill requirements across the sectors) and the critique of a cross-section of fashion courses led by recent graduates.

Throughout New Zealand, 16 tertiary education providers offer fashion, clothing and textile related qualifications – certificates, diplomas, degrees and post graduates studies – 36 in total, which produce more than 1,000 graduates annually. These qualifications are largely concentrated in the country’s main centres – Auckland (7), Wellington (6), Christchurch (5) and Dunedin (9) – with short courses focusing on machining, garment construction, pattern-making and work experience; and degree courses featuring more substantial design, communication and business components.

Course content is unique to each education provider, which develops its curriculum independently. These are, however, subject to annual review and their authors, and tutors alike, continually seek opportunities to keep abreast of industry developments both simple and complex. Consequently, the 2006 FINZ Education Conference will feature two professional development workshops for the fashion education sector - ‘domestic apparel production’ and ‘offshore apparel production’ – which will outline common industry practices, processes, terminology and timeframes from design through to delivery.

As Fancy recently stated: “The education system and business community do not work in isolation. While they are already working together and feeding off one another, there is scope for much more co-operation.”

Manufacturing here, there and everywhere
FINZ Column: Australian & New Zealand Apparel
May 2006
MAPIHI OPAI

American retail industry analysts report that ‘Made in USA’ is beginning to look more attractive to some US retailers versus importing from China, which provides an interesting case study for the future of apparel manufacturing in New Zealand. Apparel retailers in the US need to turnover their product faster if they’re to maximise sales and remain competitive in and around the fast fashion market. Companies such as Zara and H&M have redefined the terms of fashion retailing through their ability to deliver a constant stream of new styles into stores cheaply and quickly - almost daily - thus ensuring that their inventory is always fresh and closely aligned with current trends.

It’s something they are able to achieve by staying close to home. Swedish retailer H&M manufactures some of its inventory in Europe, while Zara produces a large percentage of product in its native Spain. With its own factories and design systems, the latter is able to make alterations to products that may not be selling well and have them back in stores within two weeks - something that would take the Gap two months or more to do. Reports from offshore cite an over-dependence on sourcing from China, with its associated import quota restrictions and lead times of three-to-six months, as putting American fashion retailers at a distinct disadvantage. In this business, that’s all the time if takes for trends to shift and stores to be stuck with unsold inventory.

Hot Kiss, a California-based firm that manufactures and wholesales women’s fashion, used to produce 70 percent of its inventory offshore and 30 percent locally, but has since almost entirely reversed this equation. And, in doing so, has shortened its lead-times to 45 days. The company confirmed that its local clients, which pressured the company to move offshore and deliver better prices up to four years ago, are now increasingly focused on quick delivery and replenishment, because lost sales are now being viewed as lost revenue.

Production capacity is also being sought by US retailers in neighbouring Mexico, Guatemala and Honduras - countries that belong to the Central America Free Trade Agreement (CAFTA). In addition to their close proximity, ensuring lead-times of 75 days, regulatory hurdles in the flow of goods are minimal.

Back on the other side of the world: Can New Zealand be likened to the US? Or, does it have more in common with its before-mentioned neighbours? As far as an Australian contingent is concerned, our similarity lies with the latter, with a report stating that ‘New Zealand looks set to become a low-cost manufacturing hub for Australian product’. It’s predicted that Australian apparel manufacturers will look to take advantage of ‘lower manufacturing costs and exchange rate differentials” following the announcement of more relaxed Rules of Origin under Closer Economic Relations.

Could this be? It’s difficult to forecast how the New Zealand apparel industry will transform, but the 2005 Fashion Industry New Zealand Study does confirm ‘great short-run production and adaptability’ as being its utmost strength. On the flip-side, will New Zealand even have a manufacturing infrastructure of any substance at all in a decade? As New Zealand edges ever closer to signing a Free Trade Agreement with China, these are the kinds of questions being asked. What’s more important: market access or protection? Where will you be manufacturing in 10 years and why?

Trans-tasman trade reform
FINZ Column: Australian & New Zealand Apparel
April 2006
MAPIHI OPAI

Key elements of the Rules of Origin reform package under CER are being touted as a move that will further liberalise trans-Tasman trade. Last month, New Zealand and Australian Ministers announced that the new Rules of Origin (ROO) - the criteria for determining whether goods qualify for preferential entry under the Closer Economic Relationship (CER) Trade Agreement - will be “largely based on satisfying a Change in Tariff Classification, or CTC, rather than the existing 50 percent Regional Value Content (RVC) threshold”.

Goods currently qualify for duty-free entry provided that ‘the last process involved in manufacturing takes place in New Zealand or Australia and the process incurs at least 50 percent of the product’s factory cost’. Intended to ensure that CER applicable goods do in fact originate from New Zealand or Australia, and encourage the maximum possible use of local raw materials and components, the criteria has become outdated - inhibiting the international competitiveness and efficiency of many TCF manufacturers in the process.

In New Zealand, the vast majority of clothing materials and components are now imported, and their cost increasingly outweighs that of the local manufacturing process. The existing ROO content threshold is difficult to achieve, requiring a difficult balancing act, with the alternative faced being a 17.5 percent tariff.

Australia remains New Zealand’s largest trading partner by far, with $307 million of New Zealand apparel and footwear shipped across the Tasman in 2005. Australian Minister for Industry, Tourism and Resources, Ian Macfarlane, recently affirmed the moot points of New Zealand’s lengthy campaign - that the Factory Cost Method is “complex and involves too much red tape, because companies have to make sure that they don’t accidentally break the 50 percent rule.” A process further complicated by movements in exchange rates that cause fluctuations in the cost of imported inputs. Garments that qualify one day might exceed the limit the next.

By shifting the focus away from the origin of inputs, manufacturers of women’s and girls’ clothing will have a wider choice of materials and significantly reduced compliance costs come 1 January, 2007. Under the new rules, it will no longer matter where fabric is sourced from. If the material is substantially transformed through manufacturing in New Zealand - a Change in Tariff Classification - it will qualify for duty-free entry into Australia.

This new liberalisation, however, won’t extend to men’s and boys’ apparel. While New Zealand’s largest childrenswear manufacturer, Pumpkin Patch, is relatively nonchalant about the ruling - with the labour content of its garments being higher than the fabric content in most cases - “Australia’s protectionist instincts” in these sectors are a source of ongoing frustration for the country’s menswear contingent.

Cambridge Clothing managing director, Joe Macky, asserts that Australia’s menswear manufacturing sector is just one-fifth the size of New Zealand’s and describes the fact that “the fifth mounted a lobby that was considerably more effective than what we could here” as “galling”. The Auckland-based menswear company will continue to be restricted in the quality of fabric that it is able to export to Australia and incur compliance costs of around NZ$100,000 a year. Consequently, it may look at increasing the 20 percent of manufacturing it currently does offshore. In the meantime, there are those who laud the changes, those who lament their exclusion and others who are reserving judgment until the media communique dies down and the “hard details” are made available.

The new driver
FINZ Column: Australian & New Zealand Apparel
March 2006
MAPIHI OPAI

Recently elected chairperson of Fashion Industry New Zealand, Annah Stretton brings a wealth of knowledge to the industry representative organisation and, over the past 12 years, has proven to be one of the most business savvy operators in the rag-trade. The Waikato-based designer is the architect behind one of New Zealand’s most successful privately owned fashion companies. With an annual turnover of $NZ8 million in the past year, Stretton Clothing Company Limited is positioned in the upper echelon of this highly competitive industry - laying claim to 100 employees and 28 retail stores in New Zealand, as well as 150 export accounts across Australia, the UK, Ireland, Europe, Spain and Dubai.

The woman behind the Annah Stretton, Annah.S and Garb labels is something of an archetype for the business of fashion, drawing from a fine arts diploma and degree in accounting - the latter of which she attributes as being the making of her empire ‘South of the Bombay Hills’. “I couldn’t have achieved success at this level without it. It really becomes apparent through my work as a mentor that other designers have no notion of things that I consider normal business practice.”

A short-term accountancy contract with a clothing company provided the incentive for Stretton to switch ‘trades’. In 1992, she ventured out on her own - selling generic clothing to independent retailers before courting chain stores like Farmers. And, in delivering volume and quality at the right price, yielded a 50 percent profit from an initial annual turnover of $NZ1 million. “Fashion is as much about filling orders and bottom line business acumen as it is about glitz, glamour and creative flair,” says Stretton, who had a well honed skill-set and substantial capital underpinning her move, in 2003, towards creative expression - namely the designer market.

The rest, as they say, is history. Stretton’s list of achievements to date lends itself more to the denomination of entrepreneur than fashion designer. Last year alone, she was named the Her Business Woman of the Year, in addition to being the recipient of an Honorary Masters in Arts (from the Waikato Institute of Technology) and the Ernst and Young Entrepreneur Award for Retail.

These days, sound structures, processes and staff enable Stretton to invest more energy outside of the business and her philanthropy extends well beyond mentoring emerging designers. She is a fervent advocate of True Colours - a Hamilton-based trust that supports families with chronically ill children - and ploughs both time and money into the SPCA and New Zealand Breast Cancer Foundation. In a bid to further “extend [herself]”, Stretton recently branched out into publishing with the acquisition of Her Business magazine - a title targeted at inspiring and empowering women in business. This, coupled with her greater involvement in Fashion Industry New Zealand, reflects her philosophy of “melding creativity with the bottom line and sharing success”.

In assuming the role of chairperson, Stretton’s main priority is to create a greater sense of cohesion across the fashion sector and wider apparel industry. “We’re up against global heavyweights like China, so it’s vital that the industry works together as a whole to ensure that we can deliver the necessary quality and value that gives New Zealand its edge.”

Cash will be king
FINZ Column: Australian & New Zealand Apparel
February 2006
MAPIHI OPAI

With the summer hiatus behind us, let’s look at how 2005 concluded and what experts are predicting for the year ahead. Retailers traded well in December, despite lacklustre sales in the months preceding and widely publicised pleas from the Reserve Bank Governor for more restrained spending. Although 78 percent of those surveyed in a NZ Herald Digi-Poll agreed that Dr Alan Bollard was right to be concerned that a high level of consumer spending and debt was putting the country’s economy at risk, roughly the same number felt that their own financial position was ‘fine’. Ultimately, it seemed that those with money were happy to part with it.

Paymark Eftpos, which processes 80 percent of New Zealand’s electronic transactions, reported that spending in the week before Christmas increased 8 percent to NZ$872 million, while post-Christmas sales rose 20 percent to NZ$232 million between December 26-28, which was attributed in part to the increasing popularity of gift vouchers.

Merchants reported brisk trading of big-ticket items, which was helped along by substantial discounting, while pre-Christmas sales launched by larger chains attracted customers at the expense of smaller independent retailers. Electronics and fashion items performed well in affluent shopping precincts, such as Newmarket, and were equally sought after by bargain hunters online. According to Trade Me, the iPod emerged as the clear winner with 91,928 searches, while fashion likewise featured strongly on Christmas wish-lists, particularly - Roxy (2) 72,204; Playboy (5) 52,536; Billabong (6) 49,532; Karen Walker (7) 48,670; Louis Vuitton (8) 48,580; and Supre (10) 39,016.

There hasn’t been universal applause from retailers, but most agreed that trading was better than expected considering gloomy forecasts for the year ahead. The 2006 Grant Thornton International Business Owners Survey (IBOS), conducted in 30 countries around the world, revealed a dramatic collapse in optimism among New Zealand’s medium-sized businesses. Confidence in the country’s economy, projected across the next 12 months, fell well below the global average of 39 percent to just 23 percent, positioning us between Poland and Russia. And, while more businesses anticipate better selling prices, the outlook for increased employment and profitability is pessimistic, with a round of cost cutting emerging as it gets harder to maintain margins.

The exchange rate had a negative impact on two-thirds of those that participated in the DHL Export Barometer, with the strong Kiwi dollar, rising fuel prices and increased competition being of greater concern to exporters than economic and political climates abroad. However, the dollar is expected to recede across 2006 and, when it turns, is expected to do so aggressively.

With insolvencies rising across all sectors, John Whittfield of McDonald Vague, asserts that “cash will be king in 2006” and urges businesses to monitor potential cashflow problems sooner rather than later. In the past few years, more elaborate structures have been erected and companies have expanded beyond their core business, which may leave some in unchartered territory as the economy slows.

“Some people are also in business for the first time,” says Whittfield, “and they have never experienced a downturn. They don’t understand the dynamics of a slowing economy, and, if they’ve simply been parking problems, they will be affected. If they have borrowed against their own private property to finance their business, debt servicing and rising interest rates have a double impact as business activity slows. No business is immune as trading conditions are becoming very difficult, and even the regional economies have been tightening for some time.”

The ‘Week’ in retrospect
FINZ Column: Australian & New Zealand Apparel
November 2005
MAPIHI OPAI

Last month heralded the fifth installment of Air New Zealand Fashion Week and it was, as they say, all about business. Aside from the fitful presence of anti-fur protesters, which caused the Halsey Street venue to be locked-down on occasion, there was little in the way of drama. And, in this instance, the demonstrators’ spirits dampened, along with the weather, as the week wore on.

Inside, an air of calm proficiency pervaded, which indicated a coming-of-age, but somehow detracted from the general buzz evident in previous years - that excitement or tension that comes with venturing into unknown territory, which is made all the more colourful by a touch of chaos. However, there were far more pressing matters at hand and order understandably took precedence.

Air New Zealand Fashion Week is a competitive environment, with a high concentration of firms vying for business and exposure across four days stacked with 37 shows. This year, those with an established presence at the event were more focused than ever. They knew exactly what they wanted to achieve and who they wanted to target - chalking-up some impressive results. While certain camps viewed their participation as more of an exercise in public relations and retainment that was sweetened by any new accounts, the majority jockeyed fiercely for face time with both local and international buyers - the latter of which were entrusted to the care of Fashion Industry New Zealand.

Throughout the week, the industry’s representative body worked to help designers and exhibitors connect with buyers. And, aided by staff from New Zealand Trade & Enterprise, placed hundreds of calls via the FINZ Desk - negotiating appointments, tickets and transport while managing a 30-strong team of VIP minders for international buyers. Geoffrey Finch from Antipodium (a combined fashion retail store, showroom and PR firm in London) described his assigned aid as ‘a delight’ and ‘so conscientious’ - lamenting the fact that he couldn’t keep her when it came time to leave. Hands-on hospitality is the name of the game. For our international buyers, time that would have otherwise been spent tracking down people, passes and places, was put to much better use. They were able to attend more shows, make more connections and, most importantly, conduct more business.

Being in this ‘lightening-rod’ position presented its fair share of challenges, particularly when it came to extending invitations and expressions of interest. As always, there were hits and misses. Designers found affinity with some buyers, while their affections went unreciprocated by others and, in some cases, the situation was reversed. Much like beauty, the appreciation of style is highly individual and this was evident both on and off the runway. Some of the collections panned in print were lauded by buyers, who backed this sentiment with solid orders. It’s all a matter of perspective. And, from where I stand, the team at New Zealand Fashion Week and everyone who was involved in the event should be applauded.

Contemplating the issues
FINZ Column: Australian & New Zealand Apparel
August 2005
MAPIHI OPAI

As the election draws closer a plethora of issues will come under debate - but, what are the key points for New Zealand’s apparel industry and how well have they been managed to date? The findings of the 2005 Fashion Industry New Zealand Study show that the industry’s key priorities include:

Foreign trade & protective tariffs One promise the current Labour government made, and kept, was to freeze tariff reductions pending a strategic review of the industry - with ours being one of few that retains a relatively high level of protection. The priority going forward is ensuring that an incremental approach be taken in foreign trade negotiations, rather than the door being thrown wide open.

Traditionally, foreign trade negotiations have been a contentious issue for the industry. And, the 2005 Fashion Industry New Zealand Study indicated that the flow-on effects of the proposed China Free Trade Agreement, particularly further erosion of the domestic apparel manufacturing infrastructure, remain a red light concern. However, the path towards Free Trade was well sign-posted and one that would have been travelled regardless of whether a red or blue flag had been standing at full-mast for the past two terms.

Economic development & infrastructure ‘Short-run apparel production capacity and the adaptability it provides’ was singled out as the industry’s greatest strength in the 2005 Fashion Industry New Zealand Study and the ‘need to work closely with government to prevent further erosion of the domestic infrastructure’ is considered a priority as sustainability is being sought via gradual export growth.

While not everyone will agree with how funds have been allocated, or how favourably they compare to much larger ‘initiatives’ rolled out across the Tasman, the current Labour government has made a significant financial contribution to the industry’s economic development nonetheless - more generous than anything seen since the Muldoon era. It’s given rise to Textiles New Zealand (an industry development organisation encompassing textiles, carpet, footwear and apparel) and helped launch regional development initiatives; not to mention having supported your very own - Fashion Industry New Zealand.

Closer to home, however, many apparel manufacturers site increasing compliance costs, particularly those associated with ACC and OSH regulations, as being prohibitive for small business - a key concern, given the industry’s predominance of SMEs. And, the potency of trade unions, with their 5% demands for wage increases, is proving equally unsettling for employers who are trying to maintain ‘operational’ profit margins.

High-end niche markets & increasing exports While apparel exporters would undoubtedly like to see a slightly lower New Zealand dollar and tax cuts, it remains to be seen what other parties will bring to the table that might benefit this sector. And, it has to be said, the current Labour government has fared relatively well in this area, having supported the export development of New Zealand’s creative sectors - something that could be considered a bold move, given last year’s unsavoury comparisons of fashion exports versus those of offal and more recent criticisms leveled at so-called ‘pet projects’.

Skills, education & training Improving alignment between the tertiary sector and industry is the main bone of contention here, but turning out multi-skilled graduates who are ready to hit the ground running in increasingly multi-faceted businesses is no simple task. Anecdotal evidence, however, suggests that things are improving. Graduates are in high demand, despite being ‘flawed’, which would at least indicate two positive factors. Growth across certain sectors has been good and, more importantly, businesses are learning how to better utilise and support new entrants within today’s relatively flat management structures.

The issue of industry apprenticeships featured very strongly in the 2005 Fashion Industry New Zealand Study - topping the list, in fact. of proposed responses to industry weaknesses. Here, the current Labour government has made good ground, having channeled greater numbers into industry training and apprenticeships than seen for some decades, and has already pledged to increase these flows.

The chain gang
FINZ Column: Australian & New Zealand Apparel
May 2005
MAPIHI OPAI

As New Zealand’s fashion and apparel producers focus on moving up the value chain - are we paying close enough attention to what’s happening at ground level amidst this skyward surge? The term ‘added value’ rings familiar to most in this industry, and many who followed its call - applying themselves to the production of innovative, design-led and quality garments - have yielded impressive results. Emerging, as anticipated, more competitive amidst increasingly challenging domestic and offshore environments.

Although directed mainly at designers, this call is now being answered a few rungs further down the ladder. CMT (Cut, Make & Trim) operators are now redirecting their much needed skills and resources into the development of their own clothing brands, either complementing or altogether superseding the contract manufacturing services such businesses were founded on. While it should come as no surprise that they’re looking to navigate their way further up the food chain to where more of the proceeds from ‘added value’ are being captured, they will, unfortunately, leave skill gaps behind them along the way.

Some see the obvious solution being the offshore production of everything but samples and the most meagre of runs. However, this theory is based on the presumption that offshore factories would actually be interested in taking on our relatively small-run, labour intensive jobs. Additionally, ‘Made in China’ doesn’t automatically equate with the ability to produce quality garments cheaply - keeping in mind the adage that ‘you get what you pay for’...whatever the location.

Global apparel manufacturing hubs will only become increasingly concentrated and congested as trade barriers come down, and the likely scenario is that most New Zealand companies would simply find themselves at the bottom of a very long food chain, in the unenviable position of trying to compete for production space against the world’s powerhouses. Production capacity in China, for instance, has quickly been taken up by the US, which lifted its quotas on 29 textiles and apparel categories in 2002 - a move that has seen its Chinese imports across these categories increase from 7% to 72% in less than three years.

Meanwhile, a recent survey conducted by FINZ (Fashion Industry New Zealand Inc) revealed that New Zealand’s apparel industry views its greatest strength as ‘the ability to provide great short-run production and remain highly adaptable’. And, the industry’s top five long-term goals included: to keep manufacturing in New Zealand, to improve the quality (or industry relevance) of tertiary fashion education, and develop an industry driven apprenticeship scheme - all of which point directly at keeping things ‘Made in New Zealand’.

With this in mind, perhaps we should revisit the concept of ‘added value’ - looking at quality rather than quantity, precision rather than price - and apply this way of thinking, in addition to a little more of its rewards, across the entire supply chain. After all, the fact that 79.9% of New Zealand’s apparel ‘manufacturing’ companies employ an average of just two full-time equivalent staff, illustrates the industry’s dependence on and need to both preserve and strengthen its domestic short-run manufacturing ‘hub’.

FINZ circulated its apparel industry Skill Gap Analysis questionnaire to all of its members late last month and I’d strongly encourage all fashion and apparel related businesses that have encountered skill shortages to request a copy or download it from the FINZ website. The findings will be used to direct tertiary fashion education providers on the needs of the industry and widen the catchment of industry entrants at secondary school level, in addition to filing submissions with the New Zealand Immigration Service for the Skill Shortage List (formerly the Occupational Shortage List) when and where the circumstances support this form of action.

The shipping news
FINZ Column: Australian & New Zealand Apparel
February 2005
MAPIHI OPAI

For an industry with an acute awareness of global trends - why don’t more apparel companies display a similar degree of conscientiousness in monitoring less fashionable spheres of business? Producing ranges six months in advance has always presented its challenges. And, with the advent of global free trade, New Zealand apparel companies need to be more aware than ever of widespread trickle down effects that have the potential to erode profit margins.

Take freight for example - a topical issue at present and, in the interest of industry relevance, one that can be divided into three categories: domestic transport, airfreight to Australia and world-wide shipping. Fierce competition between airlines servicing New Zealand has helped stabilise the cost of airfreight to Australia - the destination of 74% of the country’s total apparel exports for the year ending June 2004.

In contrast, the steadily rising cost of domestic transport is frequently attributed to the fact that two conglomerates all but monopolise the New Zealand market. While this situation doesn’t exactly abet competitive pricing, more tangible factors are equally in force - including rising fuel and labour costs, and diminished productivity as the result of congestion on New Zealand’s roads. Such factors are compounded on a global scale. Limited available capacity on existing container ships and the severely restricted production of new vessels only serve to make logistical manoeuvres between New Zealand and the Northern Hemisphere all the more difficult and expensive.

The manufacturing arm of the commercial shipping industry suffers from infrastructure erosion issues that surpass those of our own and, coupled with the current global shortage of steel, its annual output is understandably meagre. Last year, global shipping lines weathered a US$1 million rise in the annual cost of leasing each container ship - an expense that was passed on to their own customers via incremental price increases totalling US$750 per container in 2004, with similar hikes already scheduled for 2005.

These costs have largely been absorbed by New Zealand importers to date, aided in this respect by the strength of the New Zealand dollar, but the reliability of freight has also become an issue. Textile wholesalers, for instance, are finding it increasingly difficult to secure container space coming into New Zealand as shipping lines concentrate on servicing more profitable routes - those likely to guarantee full cargo travelling both ways. And, the most lucrative horizon currently resides between China and both the US and UK, following the tapering of multi-fibre agreements and quota systems between these global powerhouses.

Again, New Zealand importers will be working overtime to minimise the flow-on effects by making allowances for longer lead-times, but companies further along the supply-chain need to be aware that they may soon be called upon to make provisions of their own, both in terms of costing and forward planning.

However, that’s easier said than done for an industry that considers its eleventh-hour flurry of activity the norm. One New Zealand textile wholesaler fields some 70 daily requests for urgent ‘one-hour’ delivery of miscellaneous items, which, as he rightly points out, can quickly become an expensive habit that is seldom costed in. Businesses need to ask themselves: “How often are we hitting the panic button and what is that costing us?” Revisiting my original question, many apparel companies seem to suffer from ‘SME syndrome’, especially in areas where shifts are incremental and the bigger picture isn’t delivered as one tidy package. Limited time and resources often hamper companies' ability to monitor seemingly isolated events and this only highlights the need for an industry representative body like FINZ - an organisation that can gauge potential outcomes and communicate the implications for New Zealand’s apparel industry in a clear and concise manner.

The measure of success
FINZ Column: Australian & New Zealand Apparel
November 2005
MAPIHI OPAI

Clichés, however annoying they might be, endure because they house certain truths. The one that’s been vying for my attention these past few weeks has to do with the nonsensical exercise of comparing apples and oranges. This particular adage having sprung to mind following several comments made that missed the mark of its implied wisdom entirely.

New Zealand fashion exports versus New Zealand offal exports. New Zealand fashion exports vs New Zealand pumpkin exports. Regardless of the specifics, I’m sure that many of you would have been aware of such unsavoury comparisons being served up by the media during Air New Zealand Fashion Week. I’m no economic analyst - far from it in fact - but the basis for benchmarking the country’s fashion exports against those of the mighty foodstuffs industry eludes me. There is no comparison - in these terms food wins hands down. What does a premium fashion garment really have in common with a pumpkin? Not a lot, unless there happens to be a vegetal theme running through a particular collection.

Regardless of this, New Zealand fashion is currently the apple in the eye of many in New Zealand and abroad, and this distinction can’t be denounced quite so easily. It all comes down the relevance that each of us award the particular yardstick that’s being pointed - and there are many. For instance, New Zealand apparel exports increased by NZ$20 million over the past 12 months and now total NZ$302 million annually. Insignificant numbers for some bean counters, but nothing less than an extraordinary achievement for the ragtrade, which was a patient of the sunset industry ICU only a decade ago. Drill a bit deeper and you’ll find that this ‘success’ has come about despite an eroded manufacturing infrastructure and a generation gap that has contributed to significant industry skill shortages, just to name a few of the obstacles yet to be surmounted. Well done - big tick.

This apples versus oranges form of appraisal doesn’t only exist among a handful of economic commentators, it has also permeated the terra firma of fashion itself. Little benefit can come from pitting the value of designer threads against more commercialised fashion. They are two entirely different markets and this is reflected in the rules of engagement and the yardsticks that apply. Exclusivity versus volume. Designer aesthetic versus clothes for "real women" served, as always, with a clever twist.

Live and let live, I say, because these market categories are interdependent on many levels. One party flourishes with astute branding and attention grabbing designs that have served to raise the profile of New Zealand fashion as a whole, while the other stokes the coals that warm the local manufacturing infrastructure, albeit at some distance from the consumer limelight. All that anyone can do is move in the direction that meets their definition of well earned and sustainable success.

FINZ Newsletters

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Take a look at our latest publication here FINZ Newsletter Issue 11.

FINZ Media Releases

‘Fashion Industry New Zealand Study’ shows strong measure of confidence, despite the challenges posed
FINZ Media Release 11 July, 2005

An independent study of New Zealand’s fashion sector and wider apparel industry, commissioned by Fashion Industry New Zealand Inc (FINZ), shows a strong measure of confidence among businesses despite the challenges currently being posed.

The study confirms that New Zealand fashion and apparel related businesses view the country’s impending Free Trade Agreement with China as a significant threat to local industry, with 63% of those surveyed indicating a high degree of concern that it will serve to further increase the competitiveness of Chinese made garments in the domestic market. And, with the details of the China Free Trade Agreement yet to be disclosed, only 22% foresee export opportunities arising for New Zealand fashion and apparel as a result of these negotiations.

“Getting good product placement in China would be a difficult marketing job and the logistics involved are challenging. China is huge and the overall costs associated with penetrating this market are prohibitive for many of New Zealand’s fashion and apparel businesses - particularly those that manufacture locally,” says Geoff Merz, an Auckland-based customs agent and director of Merz & Associates Ltd.

More than half of those surveyed are currently exporting and display a strong focus on high-end niche markets, with one in three identifying themselves primarily as ‘designers’.

In terms of international trade, however, the focus remains close to home, with the long-term priority for 88% being to increase export sales to Australia. “The pioneering has already been done. Australia is now viewed as an extension of the domestic market and still holds the greatest potential for New Zealand’s apparel exporters,” says Susie Walker, design and marketing manager for Hart Manufacturing - one of the country’s largest fashion exporters. “Australia is very accessible. We speak the same language, enjoy a parallel lifestyle and share very similar demographics. Market information is easy to obtain, the retail environment and terms of trade are virtually the same, and our close proximity allows for immediate communication and distribution.”

According to the study, the New Zealand apparel industry’s greatest strength is its short-run production capacity and associated high-level of adaptability. “In the long-term, the majority of those surveyed want to continue manufacturing in New Zealand and believe that the country’s short-run apparel manufacturing infrastructure needs to be protected and strengthened,” says FINZ CEO, Mapihi Opai.

However, the fact that few secondary school leavers are aware of non-design related positions within the industry, or see them providing viable career paths, is currently viewed as the industry’s greatest weakness. Technical skill shortages, in particular, affect even the industry’s biggest players. “We really struggle with it and have to do all of our training in-house. There are a lot of technical requirements associated with production, especially when you’re manufacturing offshore. In some cases it’s a bit like learning a whole new language, so you need people with good communications skills and a really methodical approach to the job,” says Chrissy Conyngham, design director for Pumpkin Patch Ltd, which produces more than 15 million garments annually.

The tertiary sector also attracts some criticism in the study, with 65% of those surveyed indicating a high degree of concern that the curriculums of many fashion schools are not satisfactorily aligned with industry needs and that the system fails to adequately prepare graduates for the realities of the workplace. “They seem to take a very creative approach to design, but I worry about the lack of commercial grounding. There is a place in the industry for some of these graduates, but not for the numbers currently being produced,” says Chrissy Conyngham, who heads Pumpkin Patch’s 30-strong design and support team. “What we’re doing is interpreting international fashion trends and delivering them with a unique New Zealand twist to fit the market, which is no less creative and no less rewarding.”

According to FINZ CEO, Mapihi Opai, these are issues that still need to be addressed collectively by all sectors of the apparel industry. “However,” she says, “when you consider that this was labeled a ‘sunset industry’ little over a decade ago, it’s clear that significant achievements have already been made and we’re confident that more can be made yet.”

The study shows that the industry remains optimistic in its outlook, with 62% of those surveyed strongly emphasising the need for New Zealand apparel businesses to focus on finding ways of capitalising on export opportunities rather than dwelling on the negative aspects of free trade. In contrast to attitudes towards towards a China Free Trade Agreement, 54% view trade negotiations with the US as holding significant export potential.

According to DHL Express general manager, Phil Rountree, these findings were also evident in the recent DHL Export Barometer - a large-scale evaluation of export confidence within New Zealand. He says: “It is very pleasing to see that the apparel sector remains confident of achieving ongoing growth, despite challenging market conditions, with exporters actively seeking new markets. While Australia remains one of the most popular destinations, we are seeing exporters take advantage of the opportunities arising through Free Trade Agreements to extend their presence offshore. There is certainly good reason to feel positive about the US, given predictions that the New Zealand dollar will ease against the US dollar over the coming year.”

New Zealand’s attractiveness as a tourist destination was also highlighted in the study. “New Zealand’s tourism sector is seen as providing the greatest opportunities, in terms of capturing more tourist dollars and participating in international promotions. This is closely followed by the desire to capitalise on the success of New Zealand’s other creative sectors, particularly the film industry,” says FINZ CEO, Mapihi Opai.

The study shows that the industry is confident that New Zealand designers are as good as any in the world, with the country’s fashion and apparel having gained a strong international reputation - something that has been facilitated by Air New Zealand Fashion Week ....download the FINZ Media Release >>