‘No guarantee that a sale is a sale’: Why fashion is harder than ever

”There has always been a culture of ‘scale, scale, grow, grow’,” she said. “But now brands are seeing growth almost as a liability. Being too aggressive is no longer a good thing. So we are having conversations with businesses about not producing too much, and holding back on retail.”

She pointed also to inflated costs – stores selling an item at a higher cost than normal, knowing it would soon be discounted, as affecting the system.

Joseph Petchelco is the owner and managing director of Arddun Agency, a wholesale firm that sells Australian brands such as Lee Mathews, Alemais and Leo Lin internationally. Based in London, Mr Petchelco said he too saw many brands spending without cash flow.

“It’s so easy to spend a lot of money in fashion,” he said, listing new stores, marketing and expensive photography. “Brands that do well stay within their means. You have to pay for your product first, you have to make sure you can cashflow your business to deliver on time and work with good factories. That sounds obvious but it’s not easy in itself.”

Slow and steady has been the plan all along for Eupheme, a luxury womenswear brand co-founded by sisters Ashlee and Ebony Booth. In May, Eupheme opened a pop-up space in Sydney – its first retail outing since launching in 2022.

We do not want to be distracted by the noise of the fashion industry that says ‘spend, spend, spend’. We don’t want to engage in that.

— Eupheme co-founder Ashlee Booth

“We have two years of collections under our belt,” said Ashlee Booth. “We launched as e-commerce but from day one we’ve wanted to have a showroom and retail space. We’ve been highly considered with every choice we’ve made – from fabrics to business model to customer service.

“All of it shuns excess. We do not want to be distracted by the noise of the fashion industry that says ‘spend, spend, spend’. We don’t want to engage in that.”

To date, the Booths have not paid for digital marketing or customer acquisition – a risk, given the business does not have wholesale, but one that Ms Booth says has paid off.

“It takes 10 years to build a brand,” she said. “We want to be here for a long time. You have to be so discerning as a business owner. Every dollar we spend, we think, is this solving a customer problem?”

Both Ms Goodman and Mr Petchelco said brands must adapt constantly in order to survive.

“Every time you get comfortable, fashion moves on,” said Mr Petchelco. “Often fashion businesses get too comfy, selling their bestsellers season in and season out, and customers move on. You have to put energy into new ideas, strategies and storytelling.”

Brands that were “not agile”, said Ms Goodman, “will lose customers.” “You must be on the front foot with consumer and tech advancements,” she said. “Fashion is about the new. You have to keep up.”

At Fashion Week earlier in May, buyers from the Middle East made up much of the international guest list, with representatives from Harvey Nichols in Dubai and Kuwait, Bloomingdale’s (Dubai and Kuwait) and Tryano (Dubai) in attendance. Mr Petchelco said the region represented significant potential for Australian brands.

“It’s a very stable region,” he said. “The Middle Eastern customer knows what she wants, she is very fashionable, she wants the best of the best. So retailers are competitive and they have to be very good at what they do.

“And they are – they are very impressive. They are always looking at new ideas, new brands. They are very open-minded, they will pick up new brands quickly.” Mr Petchelco recently secured a pop-up for Australian brand Leo Lin at Bloomingdale’s Dubai.

Natalie Xenita, managing director of IMG Australia and New Zealand (which is responsible for Fashion Week) said the region made sense for Australian brands.

“Those [Middle Eastern] customers want resortwear, and that is what we do so well,” she said. Speaking with Australian fashion businesses, Ms Xenita said that the current economic climate would be a reckoning.

“Like we saw during COVID, brands that were operating on a knife’s edge were tipped over by the pullback in consumer spending. And I think we are seeing that again now.”