The Pitch: Roll up your tights

FASHION lover Emina Dzananovic has found herself in a tight spot with her hosiery business.

Emina Dzananovic

FASHION lover Emina Dzananovic has found herself in a tight spot with her hosiery business.

She launched her fashion label, OK OK in 2007, but when she added socks and tights two years later they soon took over the business.

"I sold 500 pairs of tights at a weekend market which made me realise there was a demand for them," she said.

The tights ticked the boxes. They are made ethically in Melbourne, they are not mass produced, and they are funky.

"The hosiery appeared to fit a niche that had not been tapped. I used to work in the hosiery department at David Jones so I have always liked hosiery, but this business just kind of found me," she said.

Then the Brunswick knitwear factory that makes her hosiery ceased local production on May 31.

While it came as a big shock, there had been some talk for several years that they might be at risk. "The person I dealt with at the factory was overseas more and more," she said.

Ms Dzananovic said she came across the Brunswick factory by chance.

She said from the early days she never looked to outsource overseas, even though the cost would have been cheaper.

She started off with just 500 units and now has more than 10,000 units.

But the closure of the knitwear factory has thrown up all sorts of problems for her and other niche labels such as Tightology.

Fortunately, Ms Dzananovic already had her summer stock made so she has some time to consider the options.

She thinks she may not have the quantities to have the tights made in China as the Chinese factories work in minimum 10,000 units.

"This is not really an option for me. It is all about ethical production and I don't trust wages that they would pay people in China," she said.

She has had some contact with the last hosiery knitwear factory in Nelson, New Zealand, and may be able to have the tights made there. "The bottom line is to find a reputable manufacturer," she said.

Socks are not an issue as she has them made by a factory in Campbellfield.

Meanwhile, the future of the machines at the Brunswick factory is unclear. It is not known if they could be bought by a consortium of smaller makers.

The company did not return phone calls from BusinessDaily regarding the future of the machines.

However, the machines are understood to be old and newer, better machines, which would manufacture tights which were not so easily copied in China, might be an option.

While OK OK legwear is stocked in 60 boutiques, much of her business is generated by her website, social media and at markets such as the Melbourne Design Market on July 28.

She said at last year's market, at Federation Square, she picked up a number of stockists.

Net link: ok-ok.com.au

THE EXPERTS

John Downes

Director, Acorro business advisers

NOT being aware of the intricacies of the closure, I would suggest she consider trying to buy the equipment and set up her business in manufacturing and distribution.

Or partner with the current management and staff to buy the business and act as an anchor client, focused on design and distribution.

Then there's the offshore option.

I think it is critical to know what the customer is buying.

The sassy and funky designs? That it's Australian made? That it's unique because it is low volume and fast to market? Is the market just Australia or the world? This drives how much volume Emina is going to be able to sell to make a solid business.

Options one or two may be able to attract some government support to get a new business going.

The question of how much demand there is for her range is the critical one. If she only has $1 million in sales a year and needs to feed a factory of five people for six months of the year, then that may not be sufficient to keep them afloat.

In short, she will need to scale up and take some very calculated risks to continue this business.

Net link: acorro.com.au

Carolyn Tate

Marketing guru, Carolyn Tate & Co

There are four options open to Emina.

The obvious two are to close the business or to look outside Australia to manufacture offshore.

A third, not so obvious choice, is to buy the machines from the factory and manufacture them herself (which can be very expensive with limited return on investment). The final, and more radical but meaningful option, could be to collaborate with all of her competitors and community groups with a passion for keeping the industry alive and hosiery Australian-made. The purpose of the lobby group could be to raise awareness to find funders, investors or larger companies prepared to buy the company (or invest in machinery). She could even start a crowd-funding campaign on pozible.com.au to start the momentum and increase awareness. If Emina chooses to head up this campaign it will be time-consuming and exhausting but extremely fulfilling. It also will have a long-term impact on her business and help other industries facing extinction to realise they can fight the good fight, too. Emina can see this as a threat or an opportunity. I see it as an opportunity to save an industry.

Net link: carolyntate.co

Bruce Hall

Small Business Mentoring Service
 

EMINA really needs to decide if she wants to shift from being a wholesaler/retailer to a manufacturer.

This is a different field and requires a different mindset and skills.

Certainly, there could be an opportunity for existing customers to band together and make a bid for the machinery. They would then, however, need to find someone to run this "co-op".

Has she explored if there are small-scale producers in areas like Springvale who may be able to produce what she needs?

If she were to go offshore, then I would be looking to link with someone who is Fair Trade accredited and make this a feature of her marketing. Maybe look at Indonesia rather than China for a partner, as I know they have a garment manufacturing business.

With regard to her website and social media, it would be handy to know what traffic she is getting and how it is working from an inquiry perspective.

There are a number of technical search engine optimisation problems with the pages I have looked at. I suspect the site isn't ranking that well. Pinterest is not being actively used and could be a real asset, along with frequent Facebook posts.

Net link: sbms.org.au