New emphasis is being placed on up-and-comers’ financial and strategic wherewithal. By Patty Huntington.

Fashion brand Dion Lee gets down to business

A model walks the runway during the Dion Lee show at Mercedes-Benz Fashion Week Australia in Sydney this month.
A model walks the runway during the Dion Lee show at Mercedes-Benz Fashion Week Australia in Sydney this month.

Dion Lee is on a schedule. There are Resort 2015 and Spring/Summer 2015 collections to finish and a September New York Fashion Week show to prep. Second and third freestanding stores to open by year-end in Melbourne and Sydney. Production for both his signature luxury line – available at Barneys, Bergdorf Goodman, David Jones and Net-a-Porter – and his more accessibly priced Dion Lee II line, whose standout debut at Mercedes-Benz Fashion Week Australia on April 9 earned accolades.

The fact that 28-year-old Lee is in a confident position to execute these plans just seven years after graduating from Sydney’s Fashion Design Studio is not due to talent alone but also to the cash injection he received last June after selling what industry sources estimate to have been a $500,000 majority stake to Australian high-street retailer Cue Clothing Co.

For Winter 2011, the designer collaborated with Cue on the production of a 55-piece Dion Lee diffusion capsule collection sold through Cue stores – netting $4 million in sales for the season, according to Cue Clothing Co CEO David Kesby. “The aim is to get Dion to focus on pure design and not suffocate him with business issues,” says Kesby. “By coming into business with us it allows our infrastructure to expedite and support his goals more quickly. We’ve got the experience, the resources, the retail nous, IT and production to get him to his destination a lot quicker than he would if he was just out there struggling along like the other boutique upper-end designers. It gives him a fast track.”

Indeed, the struggles of Australia’s independent fashion sector were never more sharply illustrated than at this year’s fashion week. More than half of the 76 names on the schedule were fresh-faced newcomers, while event regulars such as Lisa Ho, Bettina Liano, Ksubi, Kirrily Johnston and Marnie Skillings are no longer in business.

And for the first time, the usually jam-packed “off-schedule” program of renegade shows in the week leading up to fashion week was non-existent. The only pre-show fashion buzz was a party for 1100 thrown on April 3 by Swedish fast-fashion juggernaut H&M to celebrate its Australian arrival – a 5000-square-metre store in Melbourne’s old GPO building.

H&M is the latest in a conga line of international entrants to Australia’s $12.8 billion clothing retail market – an “invasion” that during the past three years has been the antithesis of the falling fortunes of many independent Australian fashion players.

Helping independents not just survive but progress to the next level in the new global retail environment is a key mandate of a newly minted industry body, the Australian Fashion Chamber. The non-profit organisation will offer everything from support and leadership to promotion and education.

Key to success in the fashion industry, say analysts, is business training. “Fashion is a business but it’s been operating as a bloody trade guild in Australia for the last 200 years,” says Dominic Beirne, managing director of the Australian Fashion Partners consultancy. “[Students are] not coming out with a focus on business. They’re coming out with a focus on design and presentation and puffery.”

“They have to be able to wield a spreadsheet as well as they wield a sewing machine, and they can’t,” adds David Bush, a 25-year veteran of David Jones turned freelance consultant. “Whether or not you are running your own business or whether you want to sell to somebody else, all of those business skills become equally important once the business is up and running. You can have the best product in the world, but without any business acumen you’ll fail.”

Of the more than 20 Australian universities and colleges offering fashion degrees and diplomas, only the Queensland University of Technology offers a double bachelor of business/bachelor of fine arts (fashion).The closest thing to a fashion MBA is RMIT’s two-year business-focused postgrad master of fashion and textiles. But even RMIT’s deputy head of fashion and textiles, Karen Webster – also the chairman of the Australian Fashion Council and an Australian Fashion Chamber board member – concedes the course flies under the radar.

Meanwhile, the Queensland University of Technology is about to unveil a series of announcements via its six-year-old creative industries incubator, Creative Enterprise Australia (CEA), which launched a Fashion Incubator Program in 2011 to guide emerging businesses.

Next month, the organisation will unveil four fashion brands chosen for its new Fashion Business Accelerator Program to speed up global growth.

In the same month, CEA will also unveil the first fashion beneficiary of its new $1.2 million investment fund offering equity injections of up to $25,000 for “pre-seed” funding for emerging businesses and up to $150,000 for more established businesses with high-growth potential that are targeting global markets.

According to Anna Rooke, CEA’s chief executive officer, more than half of the 100-plus fund applicants were from the fashion/fashion tech sector.

“I think the sector is seen as being too risky by banks, angel investors and venture capitalists – we thought there was a fundamental market failure there,” says Rooke. “Most of the businesses that are applying for our fund are looking for $250,000 to $500,000 capital, so by us investing in that business, we’re hoping it will de-risk it for other investors.”

This article was first published in the print edition of The Saturday Paper on April 26, 2014 as "Getting down to business".

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Patty Huntington is a correspondent for US trade newspaper Women's Wear Daily. She is The Saturday Paper's fashion editor.

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