Luxury New Zealand adventure brand Icebreaker opens in Australia, founder urges rethink on physical stores

New Zealand merino wool adventure-wear brand Icebreaker opened its first Australian store last night in Melbourne’s Chadstone shopping centre.

While it’s the first Australian store for the brand, it entered the Australian market in 1999 through a distributor and in 2003 established its own brand here and has since been stocked in 210 retail stockists.

The opening of an New Zealand brand comes as brands such as North Face, Kathmandu and Rebel have continued to enjoy strong success even during tough times for retailers.

But founder James Moon, who spoke to SmartCompany at the store’s opening, says businesses should rethink the way they view physical stores – and start offering a “deeper range” of products, but with fewer brands.

“To compete, stores need to be offer a deeper range of products, but fewer brands so they can be seen as experts. They must also be competing on customer service. But they can use their customer data-base established in-store to grow the online business,” he says.

“Consumer expectations have been reset. That’s a fact of life. But success depends upon the core principles of the business and the quality of the product you create. The more unique the product is you create, the less likely you are to have to discount.”

It took three years for Icebreaker to make its first profit of $661, but now the store is turning over more than $165.2 million.

Moon says Icebreaker intends to expand further in Australia by increasing its investment here.

“We will be growing the wholesale and the online business here and really trying to get all of the channels to integrate around making it more fun and easy for Australian customers to explore Icebreaker.

“It’s a really important long-term pathway for us,” he says.

Icebreaker first entered the Australian market through a distributor. Chief executive of the Retail Doctor Group, Brian Walker, says the business established a presence in the country first without the risk of a bricks-and-mortar investment.

“By going through a distributor, you get to understand the local market without having to go through the logistical challenges. Without opening in the market, you get to see what sells and what doesn’t; what consumers like and don’t like.”

However, while going through a distributor helps you to research a new market, Walker says there are disadvantages to doing so.

“Going through a distributor tends to adds costs and reduces margins typically,” he says.

“There has become a real question mark over time as to the role of distributors. Now, brands could just offer their products online into the Australian market and this would give the same benefits of consumer research and data,” he says.

Walker expects Icebreaker’s expansion in Australia will be successful, but it’ll face “pretty strong competition”.

“North Face, Kathmandu, Rebel and enthusiast stores like Paddy Palin have all done good business in that outdoor adventure-wear, so there is certainly customers who really enjoy this, there is a demand for these products,” he says.

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