BIO: Eric Morris has been CEO since the inception of PAS in 2005 and has led eight of the Group’s acquisitions and the successful integration of these businesses. Morris was appointed to the Board of The PAS Group Limited on 9 May 2014. Eric has over 35 years of industry experience having held senior executive positions in both major international and national companies. Among PAS’ brands include Review, Jets, White Runway, Yarra Trail, Black Pepper and Designworks. COMPANY PROFILE: Fashion
retailer Review offers women luxurious vintage-inspired fashion with a modern twist. Proudly dressing Australian women for over 30 years, Review’s ultra-feminine, romantic designs have become a staple in the modern woman’s wardrobe. There are now 41 standalone Review stores and 63 concessions around the country with plans to take the brand to the Chinese market this year.
IRW: It’s been awhile since Review underwent a lot of change but late last year, there was a refurbishment of its physical stores and a brand transformation. Can you tell the story behind that?
EM: We’ve been upgrading our stores for awhile, but they were mostly marginal changes. Last year, we embarked on a body of work with Ideaworks and interestingly, when they came to us, they said, ‘You’ve got a fabulous story here to tell which you actually haven’t told. A lot of other brands try to create a story, but you’ve got an authentic story to tell because it’s such an authentically created brand.’ Review is all created internally and from a brand perspective, it’s vintage-inspired. Really, there’s a lot more to the brand than a lot of people really understand.
We also wanted to create a new retail environment for our standalone stores which we’ll roll out to our concession stores. We gave Ideaworks the project and they actually come up with the fabulous concept of a 1950s vintage hotel, which we’ve just put into our Melbourne Central store.
We opened it officially late last year and it had a really strong response from consumers. We found quite a big uplift in foot traffic coming in and it’s just a very different store for us. It’s very much on-brand and vintage-inspired. We felt that our customers love pampering and being pampered. And that’s what happens when you go to a hotel – you’re being pampered. We’ve taken elements of a hotel and rolled it out into the store.
With the current state that retail’s in, I think it’s really important right now to constantly evolve and create an exciting retail environment for people.
IRW: Can you tell me more about the Review story that you’d like to share more with people?
EM: Review’s been around for many, many years. We bought the business around 11 years ago, when it must have had close to 10 concessions and 10 standalone stores.
We’ve grown that significantly. We’ve got over 60 concessions at Myer, then we’ve got
12 stores at David Jones as well as a number of standalone stores in key locations.
Review has got a niche in the market. With the amount of clutter in retail right now, I think it’s really important that brands focus on niche areas and differentiate themselves. A differentiating factor for Review is our vintage-inspired apparel and comprehensive range ranging from dresses to separates and accessories. We’ve recently launched into footwear as well.
As I said earlier, it’s all created internally. A lot of brands are copycat brands that go overseas and buy samples to copy them, but we actually create our own product and that’s been a really exciting differentiating point for us. We have a very loyal customer base who absolutely love the brand.
I actually heard this morning that our top spending customer spent $45,000 last year and within our top 10 customers, many of them spend $25,000 and upwards. So the brand might not be for everybody, but it’s for a distinct woman.
IRW: Can you tell me about what Review is doing in the digital space?
EM: There’s a lot of work being done around digital. We redid the site and we’re in the process of relaunching in the year – it will probably be in January or February. There’s a lot of work being undertaken at the moment to do it. It’s a significant investment.
A lot of the new features will be around ease of shopping. The other element is the new platform works really well for foreign currencies as well, so we’ll be launching into other markets from that perspective.
We do click-and-collect and we do a single aisle view of stock, so when a customer buys anything from our website, it could be shipped from our warehouse or one of our stores.
We’re also launching another element in the new year, where if anyone goes into a store, you can purchase the product and if we don’t have it there, it will be delivered from online to their home. Omnichannel is becoming more and more important.
It’s quite interesting, people often ask me about the percentage that online makes of our overall sales. These days, you really can’t determine the success of your store because you don’t know how much your online is driving customers into your store and then how much of that will be shipped from stores to customers’ homes. It’s becoming more blurred.
We’ve also done a lot of work around our digital app and we’re in the process of re-looking at our loyalty program which will also launch in the new year. We’re really looking at potentially tiering the program and offering different levels of options.
IRW: What’s your opinion of the current local apparel landscape, given the launch of so many international brands in Australia?
EM: We’ve be talking about this internally for a while and with all the internationals that have launched in Australia – H&M, Topshop and Zara – they don’t provide what Review does. Our customers don’t like seeing dresses en masse. They don’t want to go to an event and wear what everyone else is wearing. They want their own look.
I think the landscape is going through a series of both cyclical and structural changes. I’ll refer to the cyclical changes – those are somewhat economic – you know, energy prices and various other household costs which are going up, like savings rates and wage rates.
Then I think structurally, there’s a big shift with the way people are shopping and how they’re researching online. Gone are the days that there was a captive market.
Obviously there are more international players and there are more international online players. We’ve got the launch of Amazon, Alibaba and the likes of them. For us, I think it’s important to keep abreast of all the changes which are taking place and actually embrace them.
I personally think the Australian retail environment has improved and if you look at the shopping centres today, with all the international players coming in, the standard has lifted and everyone is making sure they are getting better.
IRW: Can you tell me about Review’s entry into Asia and how that’s how it’s faring?
EM: Our entry into Asia is going to be predominantly through the Tmall global platform. We’ll obviously test the success of the brand through that. We’ll be launching Alibaba probably over the next few months. I haven’t got an exact date for you.
IRW: During that process, what have you learned about the Asian consumer so far?
EM: Certainly that here’s a niche for Review. We also have a high Asian demographic within our loyalty base, so we know there’s a good market for it. That is a starting point. We’ve also started working a while ago with Union Pay and we’ve launched Alipay in a couple of our stores as well because that’s going to be really important for the Asian consumer.
Just Review is launching on Alibaba for the moment, then we will then look at opportunities for our other brands.
IRW: Would you say Asia is the first entry point for Review going international?
EM: Yes, but we’re also looking at opportunities in the United States too. We’ve been doing some work with the Boston Consulting Group and the product has tested very positively across both the qualitative and quantitative research that has taken place. It looks quite encouraging, nut we’re not at a stage yet where we can definitely say we’re launching in the US. We’re still researching it.
We’re doing the same work for our swimwear brand Jets. It is already in the US and it’s successful because it’s also got a niche market, like Review. The work we’re doing now is around how to expand dramatically in the US – the product has tested incredibly favorably there.
IRW: We’ve seen a lot of international brands coming to Australia and sometimes they do really well and sometimes they flop. But when it comes to local brands going overseas, there have been quite a few that have fizzled out.
EM: There have been quite a few that have been successful and the most successful brand I think has been Zimmerman, but I think for an Australian brand to succeed overseas, it needs a niche because around the world, it’s a very competitive landscape. That’s why we believe we’ve certainly got an opportunity for Jets because it’s got a niche, it’s a positioned really well in the marketplace and there’s a space for it. It’s not just generic swimwear.
The biggest challenge, which probably doesn’t affect the swimwear business and that’s why it’s an easier overseas transition [for Jets than Review] is because swimwear is swimwear – summer and winter swimwear is pretty much the same.
But as far as Review’s concerned, one’s always got to figure out how the seasonality elements work and that’s always part of the challenge for international brands coming here or for Australian brands going overseas. That’s what we’re going to have to come to terms with if we look at moving Review into the US.
One area which is a little bit easier for Review is the fact that in terms of occasion dresses for summer and winter, you might have to just change the colour palette slightly. So in that area, that can work a bit better.
IRW: Let’s talk about Jets and its international expansion.
EM: We bought the Jets business two years ago and there was a very small amount of international business they were doing in the US at the time. We have some very good distribution there with a major swimwear chain called Everything But Water – it’s been very successful and they’ve just recently expanded their amount of doors. it’s up to about 18 doors now.
We’re also in Neiman Marcus, we’ve just been accepted into Bergdorf Goodman, which is really good for brand positioning. And in the UK, we’re in Selfridges, Harvey Nichols and we have some other really good accounts, like Brown Thomas in Ireland. So it tells us that there’s great opportunity and there’s a really good positioning for it. And the work we’re doing right now is how we really expand that.
We see a major opportunity in our resortwear. There will be accompanying elements which go with swimwear and can take a consumer from the bar to the beach and straight to dinner. I think it’s really good if someone can just pack a Jets product for their holiday and use that for everything. So that’s where we’re looking to expand as well.
IRW: At the moment, Jets does mostly wholesale right?
EM: Mostly wholesale, as well as online. But we opened our first store in Noosa about nine months ago.
We’re looking at a few other locations, but we don’t see it as a major roll-out or a major retail brand. A few really key located stores which, will market the brand and show the total Jets experience. It’s the number one swimwear brand in David Jones and we’re also working Danny and his team at Ideaworks, who have created a new store format for us which will launch in both standalone stores as well as David Jones.
The theme of the new Review stores is a 1950s hotel – this one is a poolside cabana. Jets is very much a resort type of brand as opposed to beach brand. We’re looking at rolling out a few store formats in the new year in David Jones. They really liked what we showed them across both Jets and Review, as did Myer on the Review brand (Jets isn’t in Myer).
Then obviously after that, we’ll be looking at a couple of selected locations, we will roll out those new stores.
IRW: How would you describe the swimwear retail landscape?
EM: There are a lot of brands which do similar jobs, but the element that we focus on at Jets is really around a fit, fabrication and how it makes a woman feel and that’s been the strength of the brand for many, many years. We’ll continue to focus on that and obviously expand into resort wear as well as accessories.
Australian swimwear is actually really well-respected around the world. People love the fact that we lead an outdoor lifestyle and it’s got great cache. One of the first things we did after we bought the Jets brand, was add the word ‘Australia’ underneath it because we wanted to be synonymous with Australia.
It has same concept as Review, everything is created internally and we kind of see ourselves as real artisans in terms of creating the patterns and the fit. It’s not a copycat brand which is just sent off to Asia to have manufactured. It’s really created here, then manufactured offshore, but the patterns and everything is actually all created here.
IRW: In terms of the rest of the business at PAS, what are your plans in 2018?
EM: There are quite a few exciting opportunities happening in our Designworks division. We’ve just announced the launch of Lonsdale which we’ll be launching into Target in January. We’re working on another international sportswear brand at the moment, which I can’t disclose right now.
And we’re launching another new brand which will also take place in January. Uh, it’s called B.O.D. by Rachael Finch at the supermarket. It’s is an activewear range, but dance inspired. It’s looks very different to a lot of other activewear with great fabrications, great details.