It’s been a rocky year for Jeanswest since it fell into voluntary administration at the start of the year, but now, the brand is returning to its denim roots and reconnecting with the local community. “In the past two months, we have re-opened over 100 of our stores across Australia and New Zealand, and we are currently working to reposition our brand back to where we are at our best,” said managing director George Yeung. The latest sales figures are certainly encouraging. In an exclusive
usive interview with Inside Retail, the brand revealed it is currently experiencing positive like-for-like sales growth across the majority of stores compared to the same time last year.
“Our strategy is to ground the business in all things denim and denim-related, whilst developing a closer authentic connection to local communities. Although it has been a very difficult time for our business and for our teams, we are all very energised and optimistic about the future.”
The 48-year-old Australian brand went into voluntary administration in January, but it was bought back a few months later by its original part-owners, the Hong Kong-based Yeung family, which owns private equity investment company, Harbour Guidance. At the time, it closed 37 stores, made 263 staff redundant and owed $50 million to creditors, the majority of which sat within the owner.
According to a report from the Australian Financial Review earlier this year, KPMG’s James Stewart said the Yeung family’s investment vehicle had been keeping the business afloat after it lost $5.5 million (before interest, tax, depreciation and amortisation) in 2018 and $11 million in 2019.
“They’d been writing cheques to keep the business going, which is one of the reasons why they’re the largest creditor. (They) couldn’t keep doing this forever,” he said at the time.
Jeanswest marketing and business development manager Leanne Wall admitted that there was “some surprise” when the business had been bought back by the Yeung family at the time, but is confident that the future ahead is a positive one.
“With its almost 50-year-history, for most of its years, Jeanswest was in growth and profitable, so there was a strong belief and shared energy that we could rejuvenate the iconic brand,” she said. “We’ve been able to retain the bulk of our teams and now we’re on the journey of growing the brand organically.”
Denim in the DNA
At its peak, the fashion retailer was well-known for its marketing slogan, “Jeanswest fits best” and its wide range of jeans on offer, from straight and skinny legs to maternity, tummy trimmers and butt lifters. Now, Jeanswest is re-focusing on all its denim and denim-related ranges, exploring new techniques and fabrications, some of which have already appeared in stores, but will largely be released in the second half of the year.
“There have been ranges over time that we’ve moved away from. At one point, we had a children’s range, we also did a strong back-to-work program which was dressier. We’re trying not to complicate things and focus on what we’re good at,” explained Wall.
Since Jeanswest entered the market almost 50 years ago, a raft of players have invested in the denim market and offer affordable ranges.
However in November last year, despite going into voluntary administration just a few months later, a Roy Morgan Clothing Store Customer Satisfaction Report found that Jeanswest’s rating – 94 per cent – was ahead of Cotton On (91 per cent), Just Jeans (91 per cent) and Zara (90 per cent).
“We don’t feel the denim landscape is overcrowded, but we feel it has changed over time. There have been some pretty significant brands that have come and gone, and many that were industry leaders in the marketplace at some point, for example Pepe Jeans, G Star and, to some degree, Diesel,” observed Wall.
“You may see these brands in Australia, however they no longer have the store footprint and marketplace presence they once had. Although many fashion brands have a denim offering, most do not cater for a wide range of fits, washes, leg lengths, silhouettes and key seasonal fashion styles.”
Location, location
It’s a challenging time for physical retail at the moment, as e-commerce continues to rise in the current climate. Other businesses that have gone into voluntary administration have switched to online-only models and since the pandemic, others have started consolidating their store network in an effort to keep profitability up.
However, Wall says there is still a belief in bricks-and-mortar at Jeanswest and since the brand had already consolidated its network at the end of last year, coronavirus has had less of an impact on its stores compared to other brands.
Many of its stores are also situated outside of CBD areas, which have suffered a huge drop in foot traffic since the pandemic hit earlier this year. While Melbourne is in lockdown, three Jeanswest stores are still open in Geelong and “trading well”, said Wall.
“I think location has been one of the major reasons why we are seeing a turnaround today. The stores we have re-opened are perfectly positioned for our brand where the brand has a strong following,” she explained.
It was believed that one of the reasons behind Jeanswest’s downfall was the increase in online competitors, but in the coming months, the brand will be relaunching its website, with a simpler user journey, more detailed product information and imagery of different-sized models.
Do good, be good
Jeanswest has just announced its partnership with not-for-profit organisation, Good360, which delivers excess product from retailers to people in need. It’s part of the brand’s move towards focusing on the local community and its sustainability practices, says Wall. As part of the new partnership, 90 Australian Jeanswest stores are donating clothing to the organisation, who will connect the stock to local charities, schools and community groups.
“Throughout our repositioning process, we were able to identify end-of-line products which we wanted to do more with, rather than looking at a markdown strategy. We knew there were individuals and communities that were in great need of clothing during this time,” said Yeung.
“Through our partnership with Good360, each of our Australian stores were able to be paired with the local charity in the most need for clothing. The relationship with Good360 has allowed our store teams to be a part of the company initiative by being able to develop a local community connection.”
Jeanswest has also long been a partner of Fashion Revolution Week and regularly participates in the Baptist World Aid Australian Fashion Report, while also offering denim ranges using less water and chemicals in the manufacturing process.
“For us, it’s really important that we are growing the brand organically, that we are listening to our loyal customer and delivering to them what they expect from a denim brand and also that we’re prioritising our teams and having a local, authentic connection with our consumers,” said Wall.