Fashion brands struggle to stay on home soil

Cue S.19 campaign

The decades-long offshoring of apparel manufacturing to countries where labour is cheap, machines are new and skilled workers are plentiful has made it virtually impossible for all but the smallest brands to make clothing in Australia, even as consumers are pushing the fashion industry to reduce their carbon footprint and treat people in their supply chain more ethically. 

“The resourcing and skillset out there has retracted in no uncertain terms. People are getting older, and the craft is not being taught to relatives and family members who would carry on those amazing skills,” Damien Peirce-Grant, Cue Clothing’s COO, told Inside Retail Weekly

Sydney-based Cue Clothing, which owns the brands Cue and Veronika Maine, is now the largest clothing manufacturer in Australia, producing more than half its garments at 15 local factories each year. This makes the business an outlier today, but in 1968, when Rod Levis founded the business, it was “the norm”. 

“Back then, there was a thriving local industry,” Peirce-Grant said. 

Over the years, however, the ranks of clothing manufacturers in Australia have dwindled, as brands shifted production offshore in pursuit of cheaper labour, the cost of replacing outdated machinery stacked up and young people stopped learning the skills necessary to enter the workforce. 

Now it would be impossible for a brand to find a local factory to produce 2000 units of clothing without having a prior relationship with the supplier, according to Peirce-Grant. 

“The world has changed. I think for startups and lower volume brands, there is certainly opportunity locally, but the problem is what are the unions and government doing to educate and develop workers? There needs to be a collaborative approach,” he said.

Cue Clothing has been able to keep over half its production in Australia because of its long standing relationships with its factories (some of which have continued for more than 40 years) and because it is willing to take a hit on margin. 

Cue Clothing produces some bigger margin items offshore to make up for the slim margins on its Australian-made clothing, and knows it could increase its overall margin if it started making every item offshore. 

“The numbers may not necessarily stack up, but to be able to say the majority of our products are made locally is really important,” Peirce-Grant said. “And to reduce our split by another five per cent would put many of [our local manufacturers] out of business.” 

Cue Clothing, however, turns over more than $200 million annually and has a thriving online store and national bricks-and-mortar footprint. Not all brands are able to perform the same mathematical juggling. 

At a critical point

Australian womenswear label One Fell Swoop has been making formal and cocktail dresses locally since it launched in Perth 15 years ago, and founders Nikolina Ercig and Daniel Romanin say the cost of local manufacturing is their biggest concern. 

“The primary challenge of manufacturing locally is the increased cost of production, which drives up the cost of the product. It is difficult to stay competitive in terms of cost,” Ercig told Inside Retail Weekly. 

The fashion brand has sought to justify the cost of its products by offering bespoke and pre-order options, which it is able to do in large part because it manufactures locally. 

“This is an area that has grown our business significantly, as our clients can order a piece and have it delivered in a very short lead time,” Romanin said. 

It is ironic that Australian fashion brands’ ability to make garments locally has never been precarious than at a time when consumers have never been more vocal about sustainability. But they could yet be manufacturers’ saving grace.

“I think we’re at a critical point,” Peirce-Grant said. 

“If businesses decide to reintegrate [the manufacturing of] pieces here and support local jobs and skills, it could suddenly create a little more of a career path.” 

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