This, too, shall pass: Part II How to run a fashion business in an economic downturn

FNZ Publisher Murray Bevan speaks to local business owners Liz Savage and Emma Cruickshank about their strategies to maintain a foothold in retail and also grow their customer bases. This is part two of a two-part series.

In light of a lot of negative news lately in fashion, punctuated by the closure of Auckland-based womenswear labels Mina, Hej-Hej and more recently Starving Artists Fund, I spoke to five local New Zealand fashion design and retail business owners about the current obstacles they’re facing, and what positive changes are being made to address the shifts in spending and consumer sentiment.

The closures of Mina, Hej-Hej and Starving Artists Fund are just the tip of the iceberg: Benjamin Alexander recently stopped producing new clothing, quoting “the end of this chapter”, Napier-based Kilt shut down their factory just a month before Christmas in 2023 (although retail stores remain open), Auckland-based Maaike closed in August 2023, Wellington’s Nisa closed down in June 2023 (later to be saved by a crowd-funding drive), Okewa Rainwear shut down in September 2023, plus-size fashion brand Lulah Collective closed in October 2023, Carly Harris closed in September 2023 and Sassy’s closed in September 2023 after a 20 year run.

However it’s not all doom and gloom; some brands have taken the leap to open new stores and others are seeing opportunity for adaptation in the ways that customers are reacting to EDMs and trend-based items along with new designs and product development, and are taking on more feedback from customers. While some companies have closed down, others are thriving and see the next year as cause for cautious optimism.

Liz Savage, Director, Scarpa retail and Scarpa the Label

Tell us why you created Scarpa the Label as an evolution to the store

Scarpa the Label was conceived as an evolution to the in store experience we have become renowned for over the last 30 years. The aim was to offer our customers an exclusive and curated collection that embodies the essence of footwear fashion in NZ.

We wanted to embody our core value of quality European fashion, but deliver it in a uniquely NZ way. Scarpa the label recognizes a desire for unique, in-house designs that reflect our commitment to quality, style, and innovation. By creating Scarpa the Label, we sought to establish a distinct identity within the Scarpa brand, showcasing our design prowess and providing our customers with a locally designed capsule.

What are the biggest differences in consumer behaviour and demographic between your stores and online customers?

While our physical stores attract a diverse demographic, online customers tend to exhibit a preference for convenience and a broader geographical reach. Online shoppers often engage in more deliberate product research, leveraging the digital platform’s flexibility. In terms of demographics, our physical stores typically skew more repeat regulars seeking a tactile shopping experience, while our online customers span a wider range of ages and locations across the country.

What’s the biggest opportunity for growth in NZ for Scarpa the Label?

The biggest opportunity for growth in New Zealand for Scarpa the Label lies in establishing strategic collaborations and partnerships. By leveraging our existing brand reputation and network within the fashion industry, we aim to create mutually-beneficial partnerships that enhance brand visibility, broaden our customer base, and position Scarpa the Label as a key player in the local market. We want to keep it small and exclusive so when we do choose to branch out, we will be very selective with who can be custodians of our brand. Until then, we will focus on making sure we keep our core Scarpa regulars coming back for more within our own distribution network.

Additionally, investing in digital, targeted marketing campaigns and exploring omni-channel will be a focus and area for continued growth. Our little brand, designed in NZ, is already outperforming some of the more established global brands we stock, which is an amazing outcome given we have been in market less than a year.

What are the hallmarks of the kinds of products that sell well for you now at Scarpa across all brands, compared to 10 years ago?

I don’t think at our core, our fundamentals have changed over the last 10 years. We remain customer obsessed, quality obsessed and European centric. Our customers tend to self segment – we have the fashionistas who simply must have the latest fashion designs from Europe’s runways. But we also have a quality casual clientele, who prioritises comfort and casual. Our brands if anything have moved more fashion more exclusive.

With Ecom and global access, more mainstream brands are available everywhere. That’s not our gig. We sweat over unique and ‘exclusive-to-Scarpa’ and go to painstaking lengths to ensure the majority of product on our shelves is in fact exclusive in NZ and even better, unearths brands that we know New Zealanders will love.  We are able to do this because our customers trust our eye, and trust that anything we put on a shelf in our store or online, comes with a reputation and consistency we have earned over years and years improving our craft.

There is no doubt, the sustainability lens is more prevalent, and we endorse this. And there is no doubt there is an affordability pinch that we are all feeling at present. We cater to this with fashion affordability in a chunk of our range, but we also offer the less price conscious and more fashion orientated customers their fix as well. Scarpa the Label, in particular, places emphasis on eco-friendly practices and “as affordable” European heritage.

We are not and have never intended to be a price-led brand. We prioritise quality over almost anything. Because we need to be able to trust that when a customer leaves with something from Scarpa, it fits, it lasts, it excites – and they are proud to have Scarpa on their feet or over their shoulder.

What are some of the future shifts you think you will continue to see evolve in fashion consumption in New Zealand in 2024, and how will you adapt to them?

Anticipating the evolving landscape of fashion consumption in New Zealand in 2024, we foresee an increased emphasis on sustainable practices, digital integration, and a demand for more personalized experiences. Scarpa is committed to aligning with these trends by expanding our sustainable product offerings, enhancing our online shopping experience, and implementing data-driven personalization strategies. By staying adaptable and responsive to changing consumer preferences, we aim to maintain and evolve Scarpa’s position as a leader in the evolving NZ fashion scene.

Emma Cruickshank, Owner, Black Box Boutique

Tell us why you recently shifted Black Box Boutique from an omni-channel sales outlet to online only.

Like most retailers in New Zealand, over the last few years we have encountered a huge amount of situations that have rapidly impacted our business.

We have noticed a shift in how people are socialising and shopping. It is much more purposeful and considered now compared with pre-Covid times. So with rent prices going through the roof and crazy weather patterns affecting our store and customers we decided to make a move and shift our model so we could free up our time and be more nimble in how we talk to customers and develop our business.  Fashion and retail are such fast-paced environments, we had to become more efficient in order to maintain our success which meant cutting costs that didn’t bring value to our business or our customers.

So, we have moved sideways. We decided to keep our store as online-first but also opening up an appointment based showroom service. We are basing ourselves out of Public Library, our fashion showroom in Grey Lynn which is already familiar to so many people.

This allows us to provide valuable one-on-one time with our customers, making sure they still come and visit us and are able to see our ranges in person to try things on as well. It’s a nice point of difference and we love our customers, many have been with us since we first opened our doors so we didn’t want to say goodbye to that face-time with them.

Utilising what we already have but turning it into a new and exciting customer experience, while minimising the crazy costs (and stress) associated with Auckland commercial rentals is the answer for us.

What have been the biggest shifts in consumer behaviour and buying patterns that impacted the decision to move online-only?

We definitely have noticed customers are not impulse-spending like the used to, with the cost of living so high they are making more considered purchases and really going back to brands and businesses they love and can connect with.

The beauty of our new model is that it allows customers the ease of shopping online while also providing a special Black Box space in our showroom that will be open for everyone to try on their ‘watchlist’.

We will create more of a relaxed environment, serving coffees and drinks, where people can bring their friends and have fun while they shop.

We will still be doing events as well throughout the year which lets us foster our community, look after our long-standing clients and welcome in new Black Box customers as well.

What are the hallmarks of the kinds of products that sell well for you now, compared to 10 years ago?  

We have tried really hard to uncover and onboard exclusive brands into New Zealand that haven’t been seen or are not widely stocked around the country. For example Gimaguas and Paloma Wool are exclusive to Black Box Boutique in Auckland, while Mariam Nasser Zadeh, Aries womenswear and Gil Rodriguez are exclusive to us in NZ.

Our customers like to be unique and look for brands that give them a look that would be hard to repeat. Many of our brands come from Spain, London, L.A. and New York.  Gimaguas, Maryam Nassir Zadeh, Aries, Gil Rodriguez are all relatively smaller brands (in the scheme of things) that are focused on concise collections that drop 2-4 times a year.

Many of our pieces can be dressed up or down, providing a multi-wear option in your wardrobe and, above all else, the pieces themselves are easy to wear. We have lots of cottons or cotton blends, jersey and silks; natural materials are something we value and our designers value. Comfort and style can be synonymous these days.

Transparency and sustainability is discussed much more openly that it was a decade ago and while not perfect it is something that is in constant development across the industry. Many of our brands outline their initiatives and goals for environmental awareness, worker parity and sustainability without having to be asked for information.

It’s hard to nail down but in 2024 I would say we consider ourselves high end street. We stock a combination of styles that can be dressed up or down, all available at a mix of high and low price points. We want to make sure everyone is able to find a piece they love within their budget.

We stay away from mainstream brands and only buy small quantities of each to encourage individuality and purposeful purchasing.

 What are some of the future shifts you think you will continue to see evolve in fashion consumption in New Zealand in 2024, and how will you adapt to them?

I definitely feel the shift in NZ is more online, so many physical retail stores are closing due to crazy overheads; perhaps we just do not have the volume of people compared to cities in Australia, to warrant a 6 or 7 day a week store that is busy and bustling.

For us, the beauty of online is we can target the whole world and our showroom lets us connect and engage with the human side of fashion and retail, regularly.