On or offshore production?

Published 2010 | By Grace Newman

In the fashion industry, overseas travel is not always as glamorous as we’re led to believe. For designers involved in offshore manufacturing, the task can be more than tedious.  From the money spent on finding the right supplier and language barriers (expressing design concepts using exaggerated hand gestures) to extended lead times and the challenge of balancing ethics with value for money. Offshore manufacturing, despite its challenges, can open up a business to a whole new level of opportunities. Julianne Newman, from newly-established handbag and jewellery label The Redletter Club, knows all too well the challenges associated with offshore production.

“I have travelled throughout Asia both sourcing and manufacturing products, and each country comes with its own unique problems,” she says.

“You need to do research, and then more research to find the best place and the best supplier to get something done. Go in with a positive attitude, but be ready for something to go wrong, because at some point, it will and you need to be prepared for that.”

The Move To Bali

An interesting phenomenon occurring offshore is the shift toward manufacturing in Bali, where small orders are a specialty. Many Australian fashion designers have not only moved production to Bali, but also set up home on the island. One of these Aussie expats is accessories designer Gil Cowan.

“There’s a nice little community of Aussie fashion designers here now. We all tend to stick together,” Cowan told the Sydney Morning Herald recently.

“In fact, it’s not just Australians; there are designers here from all over the world, from Europe and the UK, the Middle East, America and Canada. It’s becoming a real hot spot for boutique clothing production.”

Other Australian designers living and working in Bali include Alice McCall and fashion design partner Nicholas Morley, as well as Jessie White from Shakuhachi. Natalie Cohen from Cohen et Sabine is a frequent visitor, and Bettina Liano and Sportsgirl have also been known to source products from the island.

Shona Thatcher, owner and founder of Sydney label Shona Joy, has also jumped on the Balinese bandwagon, with around 30 per cent of her collection produced overseas. Shona Joy manufactures leather goods in both India and Bali, beaded pieces and embroideries in Bali, and knitwear in China.

“Obviously, sending work offshore elevates the workload here, and that is a direct benefit. Also, depending on the Australian dollar at the time, offshore production can [have] fantastic financial benefits as you can usually make much better margins than in Australia. You can do a lot more for your dollar,” she says.

However, Thatcher admits that managing quality control can be a challenge.

“You either need someone on the ground in the country that you are working with, someone as an agent taking responsibility for delivery and quality control, or you need to approve pre-production samples, as well as shipping samples, to ensure nothing has been subbed or changed from the [original] sample,” she says.

“Timing can also be difficult as you need to allow extra time for shipping, and clearing customs.”

Keeping it local

While many companies are sending production offshore, Rod Levis, founder and CEO of iconic label Cue, believes manufacturing in Australia can be a competitive advantage.

“We are not a price-driven brand, we are a style-driven brand,” he said in an interview with the Australian Financial Review.

“We can get the latest designs into our stores quicker than anyone else – generally in six to eight weeks, compared to six to eight months sourcing offshore. That’s our competitive advantage.”

The sales figures for Levis’ two labels, Cue and Veronika Maine, are clear indications that he just might be onto something. According to the Australian Financial Review, the labels’ 2009 turnover exceeded $150 million. 75 per cent of the products bought were made in Australia.

“With that sort of success we don’t have any plans to change what we are doing,” Levis adds.

Levis’ idea of a “style-driven brand” can be linked to the emerging idea that the Australian fashion industry will begin to be recognized as part of the service sector, rather than the manufacturing sector. The idea is that the focus in Australia has more typically been on design, and this has led to international demand for our product.

Rob Sutton, national manager for consumer products at Austrade commented in Dynamic Business that “if you look at Australia as a creative nation, it involves a lot of work in creating new products, fundamental research in new fabrics and design and consumer trends.”

It seems the future of the Australian fashion industry lies in the hands of up-and-coming Australian designers and the choices they make about where they manufacture their product. It is a subject of some controversy that provokes questions of quality, profit margins, timeliness and ethics. But in the end, there is no right or wrong answer – the method of manufacturing is up to the designer and how well they make it work.

Photography by Giang Hồ Thị Hoàng