SMALL BUSINESS SECRETS | Men’s Fashion: Online versus traditional retail | Ricardo Goncalves

It's an industry where sex sells,and the perfect fit means everything.

Paul Zach started his athleticswear business BCNU in 2012 after a career in telco management and architecture.

The business turned it's first profit last year, but Paul's makinga dramatic change to his business structure to stay on top of costs.

RICARDO: "You've got a bit of a shoot going on?"PAUL: "We're shooting our 2017 product suite.

" RICARDO: "You're moving now to an online only business, why?PAUL: "We're going back to our core strategy.

Our initial business plan said we would predominately be an online business with a little bit of wholesale retail.

" "However for us I think we got a little bit distracted in the early stagesto the point where our wholesale retail business grew at three times our online businessin FY14/15.

" RICARDO: "Isn't that a good thing?"PAUL: "It is a good thing but we weren't prepared for that.

" "We didn't have a fully fledge wholesale retail strategy.

"He soon learned maintaining those relationships, sending stock and collateral to 47 wholesalers around the worldcomprised one of his biggest costs.

RICARDO: "So what does moving to an online only business mean for your costs?"PAUL: "It actually helps us to reduce our operational costs by about 30 per cent which is money that we can re-invest back into product development.

"RICARDO: "What does it mean for your customers?" PAUL: "What it means is better pricing, a better experience for them,they have access to our products 24/7.

" While an online only platform might be right for Paul anothersimilar business has increased its bricks and mortar presence.

RICARDO: "I understand you moved from a smaller retail shop across the road to this bigger premises, why?" MICHAL:"We did, we needed the space.

The brand has been growing overthe last few years and we started off as an underwear label, and now we're mainly activewear and swimwear and the old spacejust wasn't big enough.

I think we're in a bit of a unique situation, we have a huge online presence, particularly overseas but we also have a retail presence so we leverage off both.

" Michal grew up watching his Lebanese born parents run a restaurantnearby but decided he wanted to go his own way.

Online now forms 50 per cent of his business andit's grown by 30 per cent this year.

RICARDO: "Given that online is growing, why do you need a physical store?"MICHAL: "I think it does make a difference to have a bricks and mortar face to the brand.

I think people's confidence to the brand is slightly different then.

" Just down the road from here is another menswear retailer, and while hiscompetitors are growing their online platforms, he's relying on foottraffic to drive more than just business.

Nick Brown has been in the men's fashion business for 25 years,making and selling his own wears.

He sources his fabrics locally, but has noticed a steepdecline in activity since the global financial crisis.

NICK: "People don't walk in, it's one think if they walk in and don't likewhat they see, you just don't see people walking in.

You kind of see this look on their face like they don't want to be distracted by what's by the side of them when they walk up the footpath.

I'm getting by because I own the shop.

If I had to pay market rent for this shop I don't think it would be worth while at all.

" And while Nick does have a small online presence, it's the nostalgiafor the past that he's still captivated by.

NICK: "People would love to live in the inner city, they think it's gotmore vibrancy and everything else, but part of that is the streetscape.

Part of that is small shops, little florists, bakeries, but if you continueto shop in the big shopping malls, these little places won't last.

" They'll just become 'for lease' signs.


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