How mercy flight saved clothing firm
Philippine Airlines brings back Kiwis and also throws a lifeline to company
Achildren’s clothing business on the brink of collapse has been saved by a repatriation flight bringing stranded Kiwis in the Philippines back to New Zealand.
Philippine Airlines’ flight PR218 not only returned 167 New Zealanders home on Monday, it also brought hundreds of thousands of dollars worth of commercial stock into the country.
The flight, which touched down in Auckland on Monday, delivered two tonnes (2000 kilograms) of winter stock for Australasian brand Merino Kids. The e-commerce business, which has more than 60 stockists on both sides of the Tasman, had been running critically low on stock and was prepared to shut up shop for good.
Merino Kids Australasia managing director Paula Petrie said she was planning for the worst just a month ago as borders throughout the world closed and countries grappled with the spread of Covid-19.
Border closures saw the company’s baby clothing and newborn sleep sacks flown out of India but bounced around at different airports in Asia.
The stock was eventually stranded in the Philippine capital of Manila.
“We needed all of that stock in by February to start to get ready for winter sales. By the middle of March it just stopped, our product was holed up in Manila, and the world closed down and Covid-19 had hit with vengeance,” Petrie told the Herald.
Petrie, along with her logistics partner Vertical, exhausted every possible option to get the product delivered, including via different airlines and sea freight, to no success. They even tried Air New Zealand — which was willing to help transport the goods — but they only had operational planes in Shanghai and Hong Kong.
“We were really getting worried, and through all of this time, our stock levels were dropping. We started to feel a bit out of control,” Petrie said.
“When the New Zealand lockdown kicked in we just thought ‘there’s nothing we can do’ — it was really frightening.
“We closed down our own retail store and our business-to-business and wholesale channels stopped overnight.”
The business had approval from the Ministry of Business, Innovation and Employment to continue to trade under the essential warmth and wellbeing category for babies and still had orders coming through its website.
“We were going to run out of product, our inventory was at critically low levels, that was the end of March, and there was still nothing coming out of Manila.
“Our factory in India had closed as well and all of these stories were coming through daily of international supply chains being in tatters for months if not years . . . so my husband and I started doing a closure strategy.”
The pair planned that they would continue to trade until stock ran out, and that they could buy back any stock from struggling stockists.
Last Thursday, Petrie sent a message to the Ministry of Foreign Affairs and Trade and official Niels Meinderts helped her to arrange to have the stock loaded on to the Philippine Airlines flight out of Manila on Sunday.
Philippine Airlines has suspended all of its international and domestic flights until April 30 due to the Covid19 outbreak. It has operated occasional special flights to fly home stranded passengers in recent weeks, and some cargo runs.
Merino Kids’ inventory was stored alongside passenger luggage on the commercial flight and is now en route to Merino Kids’ distribution hub in Greytown, Wairarapa.
“I’ll be kissing those boxes,” Petrie said in response to the relief she feels. “The team has been meeting and getting organised to get everything live on our website next week.”
Petrie said the situation and the uncertainty around Covid-19 and when borders will open back up has made her think twice about her supply chain capabilities and where her factory is located in India.
Merino Kids is now considering either bringing back all or part of manufacturing to New Zealand.
“The supply chain problems that we are facing are huge for our economy and for our small to mediumsized businesses.
“The mid-term is all about how we
I’m actively looking to see if we can bring some or all of that manufacturing back home. Paula Petrie
as a business will operate in the future. This whole event for our stock has highlighted the risk that we have by having conflict and vulnerable supply chains. For me, that is a real priority now.”
Increased competition and larger order requirements forced the business to move its manufacturing offshore to India. Petrie said now was a good time to rethink that.
“I’m actively looking to see if we can bring some or all of that manufacturing back home.”
Merino Kids sells it product in the United States, Britain and Europe, as well as New Zealand and Australia.
The business was started 17 years ago by Amie Nilsson, who came up with the idea of a sleeping bag for babies made of merino wool over a bottle of wine.
The company’s goods are now sold in David Jones, Bambini and Ecostore, among others. Its online store makes up the bigger portion of its business.