Inside Retail Weekly: What was the process of selling part of the business like? Was it always part of the plan for Ginger & Smart?
Alexandra Smart: It was a really interesting process for us. We’ve been in business for 17 years with our heads down, building a business from startup. We built the business off the back of our cashflow, our own grunt, strategies, business plans and smarts and we were very independent, nimble, lean and good at what we did.
But we reached a point where we recognised that to scale the business, it required some external help, and the marketplace has changed – it’s important to be in a lot of channels. So we went through a process of looking around the market to see who would be a good partner who would believe in us and recognise our talents, who would come on board and be collaborative and collegial and help us to go from where we are now to where we want to be. Alceon Retail Group were those partners.
IRW: What are you hoping to gain from the new partnership with Alceon?
AS: Alceon is really good at growing capability – they’re good at digital and logistics and finance and a lot of the backend parts of the fashion business. They have brought on good people and good technology, so we see our business really benefiting from those aspects. We’re really good at brand, product, design, HR and retail, so it’s really good for us to have partners that have capabilities in areas where we’ll need help to scale.
IRW: Did you find selling the business to be an emotional process, especially because you’re both the founders and still in the business now?
AS: Yes, it was an emotional process to go through, but we’re looking forward. It’s been an exciting process insofar that we’ve learned a lot – we’re learning just by virtue of working with new groups of people and teams. It’s a good thing for Genevieve and me to be doing after 17 years in our career paths, too. You can’t be good at everything, so it’s good for us to bring in new ways of thinking and doing things – it’s super important at the stage that our business is at.
So really, we’re excited about the future and proud of ourselves that we were able to build a recognisable brand that people still love. We’ve stayed relevant in the market, we’ve built a great community around us and we stand for a lot. So rather than it be a sad scenario, it’s more of an exciting outcome.
I joke that I did an MBA which I graduated from in 2002, the year my daughter was born, and I’ve just done one again, just by going through that whole process.
IRW: What are some of the plans you’d like to put in place with Alceon?
AS: It’s always been my view that in Australia, as a brand, you have to play in a few distribution channels. We’ve always had a wholesale business which underpins retail and we’ve got a corporate channel (we do uniforms for Macquarie Bank). But the thing about distributing through various channels is you have to be good at that channel management. We’ll be focusing going forward on digital, obviously – it’s always been a focus, but it will become an even greater opportunity for us. We’ll be looking at growing those retail stores and concession stores in David Jones and international. So they’re the three key channels we’ll be focusing on in the short and long term.
IRW: Do you see Ginger & Smart doing a lot more D2C in the future?
AS: We have our wholesale business now, and international will start as wholesale, but we’d like to open stores overseas.
IRW: It’s not your first time overseas, though.
AS: We took our first resort collection over in 2006, and we were picked up by Browns Focus in London. We had a thriving international business until the GFC hit, then we made the decision to come back and unlike most people, we didn’t lose any money. We were very lucky. Since then, we’ve focused mostly on the Australian market, so it’s a great opportunity for us to take the collection predominantly to the US at this stage.
IRW: There are quite a few designers who are really pushing into the US right now – Camilla and Bassike, to name a few. Why there?
AS: I think it’s because Australian designer product is really fresh and interesting. It certainly sits well in the LA market; it’s an exciting product in the New York market, so it’s a natural fit [for the US]. It’s potentially less competitive than Europe as well. It’s still competitive, don’t get me wrong, but to their credit, a number of Australian designers have really cracked the market over there and in a sense, opened the door a little bit. Certainly Australian design as a category has more of a profile in the US than it ever had before, so it’s a matter of capitalising on that and making sure that our offer is differentiated into the US market, which will be really important.
IRW: Is there an Australian aesthetic in terms of design?
AS: I think we’re a unique market. Look into any of the major cities around the world – Paris, London or New York – and they don’t sustain a local designer presence like we do in Australia. There are 10 or more Australian designers who are well regarded and supported that we compete against. But as a category, that doesn’t happen anywhere in the world, so it says a lot about the designers and the Australian market supporting their own, because it’s unique.
I think there’s something about the fact that we’re so far removed from Europe and America that we march to the beat of our own drum. We’re not influenced by trends or what’s going on. We’re aware of it, but we’re not led by it, so it’s a unique story and that’s what fashion is all about – it’s all about storytelling.
IRW: What do you think customers are looking for in a physical store experience these days?
AS: Customers these days are looking for an experience, it’s not just about buying a dress. It’s a very visual experience; it’s a sensory experience when you’re shopping in a boutique. It’s about the music and the scent of candles, feeling the fabric and the visual feast of moving through a store, but it’s also about that elusive customer service.
Customer service is easy to talk about, but much harder to execute on the shopfloor. It’s what the customer is demanding, so we as retailers have to step up and look for ways to make the experience exciting, long-term and fruitful on both sides.
Having a Ginger & Smart piece in your wardrobe for 10 years is a really key important part of our customer experience. We don’t want her to throw it out, we want her to build a wardrobe that she loves, is timeless and relevant for many years to come and she can wear her piece lots of times.
That’s part of our sustainability stance – making sure that the fabrics that we choose, the styles that we design and the messages that we send are all about long-term timeless beauty.
IRW: Ginger & Smart has been in the sustainability space for awhile. What kind of work are you doing at the moment in that area?
AS: We started this journey in 2008 when we become ethically accredited through Ethical Clothing Australia. What that meant was we were making sure our factories and the people we were working with were being paid correctly and working in conditions that were accredited.
That was the start of this journey, which became part of our sustainability journey about five or six years ago. We select fabrics that are renewable, sustainable and biodegradable – we work with really interesting technology which has changed so much in fabrics now. We’re always working with our factories and fabric merchants to come up with new and interesting fabrications. The fabrics that we select are either sustainable or we use fabric that will be in your wardrobe for a long time, so you won’t throw it out and it won’t turn into landfill. We use our fabrics entirely, so rather than getting rid of it all at the end of the season, we’ll use them up in recuts and put them through our outlet store. We donate a lot of fabric too.
There’s a whole social responsibility part of our business, too. We partnered with the Sydney Women’s Fund, which raises money to help disadvantaged women. We designed a bag and scarf for them and all proceeds go to funding a sewing circle for refugee women who used to sew in their home country but find it hard to assimilate into the workforce. It’s not just about sustainability, that’s the buzzword. For us, it’s a social responsibility positioning and that goes right through to when we make decisions around stores. We recycle fitouts; we repurpose, we don’t throw out and start again. It’s just a consciousness around what we can do within our own four walls and contribute.
IRW: How would you say the retail landscape has changed since you first launched the business and how have customer expectations changed?
AS: It’s completely changed in a relatively short period of time, obviously driven by online, but also driven every day by all sorts of external factors, political or environmental.
But from a consumer point of view, there’s been an impact on the conscious consumer around not buying for the sake of it, but making good decisions. In our category, we talk about customers buying forever pieces or pieces that they love that they’ll invest in. I don’t think that’s changed that much, but I do think that obviously our customer has the world at her feet. She can buy anything anywhere and have it on her desk the next day. So that speed to market and efficiency and the experience of putting the garment on is extremely competitive, so you have to do everything along that chain as well as you can.
IRW: Have you ever felt any pressure from customers’ insatiable hunger for newness?
AS: I think you’re right when you say the customer is always demanding newness – it’s such a visual world that we live in and Instagram, Pinterest and all those digital tools have meant that there’s that ‘wipe and it’s gone, I want more, I want new’.
I don’t know that we’ve felt the pressure of it, but we’re aware of it and therefore, it’s about making sure that it’s exciting for the customer. But then I think that’s the demand of the designer anyway, to make a thing so covetable and interesting that the customer is drawn to it. Definitely, she wants it fast, but she’s not throwing it away, she’s keeping it forever. That outweighs the idea of always needing something new.
IRW: How has the business evolved in the last 17 years? How did you imagine the business would go when you first launched it?
AS: We always had a business plan right from the start. We had a really clear vision and when we look back at the timeline of when things happened, there’s no real surprises there. It’s what we planned.
We started in 2002 with a small candle and accessories collection, opened our first store in 2006 which was the same year we were picked up by Browns Focus and picked up our international business, then we’ve added stores and opened and closed others over time. We’ve been nimble to get our stores out that don’t work.
Of course, the retail landscape changes all the time. We launched our first online store in 2009 and we were one of the first brands to join The Iconic. We were always at the forefront of some of those key decisions.
From a product and brand perspective, it’s been a singular vision and now we’ve done all the hard work and we’ve had the chance to go and do some pretty amazing things. We recognise that there’s a reason why there’s a silo of a few brands – and really, I can imagine that’s the direction the Australian market will go. To grow and scale, you need grunt, whether it be finance or logistics, you need support to take a brand of our nature from here to there.