Huffer co-founder Steven Dunstan is on his hands and knees cleaning the floor of his new Bondi store. It opens for trading tomorrow morning and the place is a mess, he was up until 3am the night before putting it all together.
Dunstan is hands on, the back lighting and accenting isn’t exactly how he’d like it, but the former professional snowboarder turned retail-wholesaler is no stranger to his current position. As of this morning he now has two operational stores in Australia and plans to open 6-8 more in the next three years. He says it’s ambitious, and given that the New Zealand native only has 5 stores in his home country it probably is.
Huffer’s journey started in 1997 with the coming together of two professional athletes and an idea to bring trendy street wear to the 18-24 market. They’ve had their ups, including managing to open and sustain stores on New Zealand’s high streets, and their downs, which Dunstan describes as “pulling out with our tails between our legs” when their American partners went under after the GFC.
Dunstan is now bullish about Huffers’ expansion prospects down under, telling Inside Retail that he’s already secured two wholesale agreements with major Australian retail names for Q1 2017. Wholesale is the foundation of the company; Dunstan sees retail as a brand expansion exercise, sales and trade is important, but prospective locations are scouted based on their relevance to the brand.
“The major [retailers] we are dealing with have been really happy that we’re retailing in Australia – it’s shown our commitment to the market here,” Dunstan said.
“We’ve made a decision that we are a wholesale business, retail is to support wholesale,” he continued. “There’s a point when you become a retail business, and then you have to make quite different decisions. You can’t be a retail first wholesale business – that just doesn’t work.”
Although hesitant to name his partners, Dunstan said that a number of retailers are actually supporting Huffer’s Australian expansion by providing catchment and overhead information about specific locations around the country. They want him to succeed; after all Australian customers becoming familiar with Huffer’s products can only be good for their bottom lines.
The plan is already fleshed out. Following the opening of the 65sqm boutique on Gould Street in Bondi, the company will look towards opening stores in Victoria within 18 months. Brunswick and Chapel Street are the standout spots, Dunstan says, revealing that Huffer will follow the same routine they’ve pursued in Sydney – opening one major store and a subsequent satellite location.
“Although we came to Sydney, Victoria would be a more successful market [for us],” he said.” The strategy in coming to NSW first was about strengthening our [wholesale] business.”
The new Bondi satellite is an intimate boutique store facing out onto a side street in the heart of Bondi’s retail district. It’s light and remarkably simple, but as Dunstan says it doesn’t need to be grandiose, that’s what the beach is for. This is a stark contrast to Huffer’s Newtown location in Sydney’s inner west, which features intricate detailing and artistic installations. Dunstan also knows he isn’t the only boutique in town —the place is practically flooded with them—and has a plan to standout.
That plan is a coffee machine, neatly poised on the light oak counter in the middle of the store and clearly visible from the outside. Dunstan says he wants to bring one of his favourite New Zealand retail practices to Australia, free coffee Fridays. At first it seems like a gimmick, but upon walking through the store it becomes apparent that the idea is no ad-hoc PR stunt. The main street frontage window is pulled back from the street wall, just enough to provide ample seating space and he’s already started work on organising a local barista to come in and facilitate the service. It’s not about drawing sales, that comes later. It’s about embedding the store in the local community and providing locals with a social space that they can’t get at the boutique across the road.
The product range itself is lean and tailored to Bondi. Locally themed t-shirts will be printed for sale in the store, which over time will diverge further from the brand’s Newtown offer. Light, summer focused garments adorn the racks; Huffer’s bulkier New Zealand range is nowhere to be seen.
The store is supported by a remarkably small supply of stock and will require daily fulfilment from the Newtown location. Rent is so steep that daily fulfilments are cheaper than the extra space at a larger location.
“Rent up here is ridiculous; a year ago we opened in a popular shopping area in Newmarket, Auckland that attracts premium rents. The [Bondi] store is 2.5 times higher,” Dunstan explained.
Click and collect is a potential solution, they wouldn’t be the first retailer to justify a smaller format with omnichannel, but the service is only on the horizon at this stage. The company has an online store, but in Dunstan’s own words it could do with some improvement.
Huffer wants to triple their online business in the next three years alongside their Australian expansion. At the moment their online sales makes up only 5 per cent of their retail trade, but Dunstan says their millennial customer is primed to deliver them strong organic growth in the area. A freshly hired marketing manager should help, with the company currently undertaking an investment plan to leverage their social media presence.
Whatever the case, Dunstan knows that this won’t be the last time he’ll be on his hands and knees bringing a store together in the next 12 months.