Retail start-ups must maintain marketing efforts regardless of the niche they operate in industry experts say, in light of news that designer denim label Bettina Liano has entered voluntary administration.
Corporate recovery firm Ferrier Hodgson – the same firm handling the administration of REDgroup Retail – has seized control of the fashion house.
Established 28 years ago, Bettina Liano trades in Melbourne, Sydney and Perth through a chain of seven boutiques.
The brand is distributed throughout Australia, New Zealand, Indonesia and Malaysia through more than 120 stockists, including 18 in NSW and the company employs 90 people throughout Australia.
Known for its tiny sizes and celebrity fan base, Bettina Liano has attracted a cult following among fashion-conscious consumers.
Ferrier Hodgson administrator John Lindholm has informed suppliers, staff and creditors that he has taken over the company and will attempt to find a buyer to save the brand.
“I now control the company’s assets and operations and am assessing the company’s financial position,” Lindholm said in a letter to staff.
“I am working with the company’s management team to stabilise the business while I seek a buyer for the business in the short-term.”
Ferrier Hodgson has issued a notice to hold a special creditors’ meeting on July 20.
Brian Walker, managing director of The Retail Doctor, says when a company is placed in voluntary administration it is normally the result of funding activity and/or trading activity.
While Walker says he couldn’t comment on the company’s funding activity he was surprised to learn about the company’s administration from a trading perspective.
“Having said that, Bettina Liano has a very prescribed look – you have to be a certain size to wear the brand. The staff also need to embody that look, so much so that it pours out of them,” Walker says.
He raised questions about the company’s marketing efforts, suggesting its appeal as an exclusive brand could have contributed to its downfall.
“They kept too low a profile… When you operate within a niche you need to be full on in a social media context, have a strong CRM platform and strong viral marketing,” he says.
“I also thought the range was a little limited and therefore hard to promote.”
Walker doesn’t believe the company’s distribution strategy directly contributed to its collapse, claiming the mix of retail concessions and seed retail outlets makes sense.
“But in reality what you find is a tightly tuned retail offer or a dispersement of the offer,” he says.
Walker says he is still struggling to understand what the company’s core offer is.
“At the end of the day their core product is denim but if you look at the layout of a Bettina Liano store you wouldn’t even know that,” he says.
Walker offers retail start-ups the following tips:
- Have a strong understanding and a clear definition of your offer.
- Be great at what you do and be better than the competition.
- Stay one step ahead all the time, work it and rework it.
“Make sure you’re linked to the social media community. Also keep your debt levels well under control and have good cash flow,” he says.