Another fashion firm set to hit the wall
A swathe of clothing retailers have struggled and shut their doors in the past year
Less than two weeks into the new year and another Kiwi clothing company is in strife. Increased online competition from overseas retailers, pressure on consumer spending, payment defaults, delays and construction headaches are among the reasons given for issues in the sector.
According to industry commentators, it is a tough time to be in retail.
Andrea Moore’s announcement that it was facing closure marks the fifth high-end retailer to have failed in the space of a year, following Kimberleys, Top Retail, David Lawrence and Marcs.
A swathe of other clothing retailers have also had struggles, perhaps most notably former market-darling Pumpkin Patch, which was placed in liquidation early last year.
The brand was subsequently purchased by Australian retailer Catch Group and relaunched online.
“Andrea Moore is the latest in a long line of fashion retailers that has had serious problems,” Retail NZ general manager Greg Harford said.
Andrea Moore has seven stores across Auckland, Wellington and Christchurch and employs 22 staff.
“It is just a really competitive market out there,” Harford said.
“You have domestic competitors, relatively low barriers to entry and then you have massive competition from offshore, and it’s that offshore competition that is really driving a lot of change in the clothing market.”
Another issue was New Zealand’s GST laws which allowed overseas retailers to ship to New Zealand without having to pay the 10 per cent duties tax and 15 per cent GST that local retailers had to.
It’s something Harford said retailers had been campaigning to have changed.
In hindsight we should have consolidated . . . not opened the Takapuna store, and taken a more conservative approach to growth. Brian Molloy, managing director Andrea Moore
“It is a significant price advantage that the offshore competitors have got,” he said.
For Andrea Moore, it was a perfect storm in 2017 that caused it to be placed in liquidation, said its managing director, Brian Molloy.
“In hindsight we should have consolidated our position, not opened the Takapuna store, and taken a more conservative approach to growth,” he said.
The company faced external construction at almost all of its store sites last year.
“All this construction simultaneously hitting five of our stores impacted foot traffic, sales and margins as we had to offer discounts to try and encourage customers to walk past the construction noise, dust and mess,” Molloy said.
“Looking back, I’m not sure what else we could have done to mitigate the construction and interruption it caused our business.”
First Retail managing director Chris Wilkinson said it was disappointing news for the “much loved brand”, which had a terrific backstory and had been successful.
“Our towns, cities and malls need these independent businesses like Andrea Moore to deliver diversity, interest and local relevance.
“Consumers are falling out of love with the sameness of retail, so one less brand like this is not good news for landlords or consumers.”
According to retail commentator Greg Randall, founder of Comma Consulting, retailers needed to up their online experience for consumers and translate what he said was usually a great instore experience into an equally unique and exciting online experience.
“You have very passionate people who work in the store, typically the designers and owners, who love the designs and are passionate about the brands.
“But what they struggle to do is take that physical retail passion and digitally translate that, and that’s the failing of retailers globally,” Randall said.
"You have to architect an experience that is different.”