Australian fashion label Willow will be wound-up at the end of September, after owner Apparel Group was unable to find a buyer for the brand.
The Willow online store closed on Monday and according to a notice on the brand’s website, its four stores in Melbourne and Sydney will close their doors in “late September”.
Willow was founded by Kit Willow Podgornik, who continued to work for the label as creative director until 2013. Apparel Group (APG & Co) acquired the brand in 2011 and fashion label sat alongside sister brands JAG, Sportscraft and Saba.
However, APG & Co put Willow on the market earlier this year, after deciding the brand no longer fit with its long-term strategy.
Increasing competition and narrow margins of error
The closure of Willow comes in the second half of what has been a tough year for some Australian retailers of women’s clothing.
The Australian operations of UK brand Laura Ashley entered voluntary administration in January and 20 of the chain’s 38 stores were closed before a buyer was found for the remaining 18 outlets.
Women’s clothing retailer Meredith & Moore entered voluntary administration in March and closed a month later, while the parent company of retail brands Rodney Clark and Gordon Smith also called in external managers in July.
More recently, fashion chain Seduce closed its nine Australian stores, after voluntary administrators and liquidators were appointed to the business in August.
According to Brian Walker, chief executive of the Retail Doctor Group, Australian retailers, particularly those that specialise in fashion, are operating in an “increasingly competitive and challenging environment”.
“Australian consumers, particularly of fashion, are spoilt for choice compared to when many of these brands started,” Walker says.
“The margin for error in picking designs and trends, in being on trend and having perceived value, is getting narrower and narrower.”
Walker says the introduction of large international fashion retailers into the Australian market, including the likes of H&M and Zara, means some retailers are being forced to develop and distribute their ranges faster.
“In a time gone by, the products would sit in store and eventually they would sell,” he says.
“Now [designers] are introducing new designs weekly, monthly because H&M and Zara have given us this whole concept of ‘fast fashion’.”
Walker says this faster pace of fashion retail has important consequences for retailers’ inventory management and working capital.
Pippa Kulmar, senior strategist at RetailOasis, agrees that the increased competition in the Australian fashion market, which has been brought about by large ‘fast fashion’ retailers expanding to Australia, is the “one big challenge” to local designers and retailers.
While Kulmar told SmartCompany the rise of emergence of online clothing retailers has also played a part, she says prior to H&M, Zara and even Uniqlo opening local stores, local fashion retailers had relatively little competition.
The influence of these retailers is being felt the most among mid-market retailers that look to the fashion shows in Paris and New York for inspiration, according to Kulmar, as the likes of H&M and Zara are able to pick up those design trends and deliver garments faster and at a lower price.
“You can’t play the same game,” she says.
“They are better at copying trends and can do it cheaper.”
How local fashion brands can set themselves apart
Both Walker and Kulmar highlight the importance of fashion brands maintaining a clear creative strategy when it comes to maintaining their place in the market.
“If you copy trends, you always have to compete on price,” Kulmar says.
“If you’re coming from a point of view of original design or creativity, all of a sudden price becomes less of an issue because consumers are buying the brand.”
Kulmar says she hopes the influence of ‘fast fashion’ leads more local designers and retailers in the mid-market to “pick a position and stick to it”.
“Decide what the brand stands for and design accordingly,” she says.
“Also understand the customer, who they are and what they want.”
Walker says successful fashion brands must maintain an “x factor” or a creative “heart and soul”.
“Sometimes we find … with a brand like Willow, when it loses the creative force and energy behind it, it might not show for a season or two, but it ultimately does,” Walker says.
“When they lose that, they become more mainstream and then they’re in the gun barrel.”
SmartCompany contacted Apparel Group but did not receive a response prior to publication.
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