Groundbreaking footwear start-up Shoes of Prey goes into liquidation

It was one of the original Australian fashion start-up success stories. But today, it is just one of a string of companies facing ruin.

When Shoes of Prey launched in 2009, it became a tearaway success almost immediately.

But now, just one decade later, the customisable footwear company has become the latest victim of Australia’s struggling retail industry.

Shoes of Prey has just entered into liquidation, with Kelly Trenfield and John Park of FTI Consulting appointed as administrators yesterday.

On Sunday, co-founder Michael Fox broke the bad news in a post on Medium bearing the title “The Shoes of Prey journey Ends”.

In it, he cited the company’s failure to gain traction in the mass market as well as its difficulty in competing with cheap Chinese manufacturers as two driving reasons behind the collapse.

It’s a sad end for a company which was once “prepped to scale into the $100m’s revenue”.

SHOES OF PREY

The start-up, founded by Jodie and Michael Fox and Mike Knapp, allowed shoppers to customise their own shoes via the company website, which were then delivered within a few weeks.

But in March 2018, a hint of the looming catastrophe came to light when Mr Fox, the company’s chief executive, emailed some of the country’s biggest start-up names to ask for fresh funding from investors.

Shoes of Prey was once ‘prepped to scale into the $100m’s revenue’. Picture: Supplied

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In that email, he explained the company needed $3 million in a “bridge round” to shift towards a completely new business model — and save the company.

Then, in August 2018, the company revealed it had ceased trading in a shock announcement posted to its website and on social media.

THE DOWNFALL

In the Medium post, Mr Fox explained Shoes of Prey had fallen victim to changing customer demands and high operational costs.

“Despite all the right trends towards personalisation and our success within the customisation niche, contrary to our market research, the mass market fashion customer just didn’t respond as we expected,” he wrote.

“We learnt the hard way that mass market customers don’t want to create, they want to be inspired and shown what to wear.”

Meanwhile, the company’s attempt to “pivot” and serve customers with small, large, wide and narrow feet and focus on “short, fast run manufacturing for other retailers and brands” also failed.

Co-founder Jodie Fox is writing a book about the Shoes of Prey journey. Picture: David Geraghty, The Australian.

The reasons behind that failure were the business’ complexity and “high fixed costs” coupled with the struggle of “producing shoes one at a time” while also “operating our factory legally and ethically” and  “meeting all the environmental, health and safety and labour regulations which the vast majority of factories in China don’t”.

OTHER VICTIMS

The announcement comes just weeks after beauty behemoth Napoleon Perdis went into administration, shutting dozens of stores across the country.

In late January, sportswear manufacturer Skins also filed for bankruptcy, while menswear chain Ed Harry also closed after failing to secure a buyer that month.

But 2018 was also a horror year for retailers, with plus-size womenswear brand Maggie T becoming the first high-profile company to enter administration in 2018 after announcing it would close in early January.

Not long after, Australian footwear, clothing and accessories label Diana Ferrari revealed “at least four” of its 17 retail stores would be rebranded with the rest to close, and six clearance outlets to remain open.

Napoleon Perdis makeup stores went into receivership last month. Picture: Richard Waugh/AAP

In the same month, outdoor adventure gear company Mountain Designs made the “difficult decision” to close one in three stores in 2018.

Shops at Joondalup, Wagga Wagga, Toowong and Dubbo closed on January 7 followed by branches at Cannington, Bendigo, Toowoomba and Wollongong on January 10, with others at Pacific Fair, Ashmore, Bunbury, Moorabbin and Warringah also shutting.

Next came Gap, which quietly bowed out of the Australian market in early February.

The US fashion giant was brought to Australia by luxury goods retailer Oroton — which narrowly avoided its own collapse late last year.

Soon after, cosmetics brand Avon announced it would depart from Australia and New Zealand “by the end of 2018”, leaving the company’s 220 staff and more than 21,400 representatives facing an uncertain future.

In early May, fashion retailer Esprit revealed it would close all 67 of its loss-making Australia and New Zealand stores as the Hong Kong-listed company shifted its focus to more profitable regions.

Ed Harry menswear folded earlier this year. Picture: Specialty Mens Apparel

Toy giant Toys ‘R’ Us finally closed down for good on August 5 after going into voluntary administration in May.

In July, administrators revealed all Toys ‘R’ Us and Babies ‘R’ Us stores across the country would fold, with around 700 jobs lost.

The announcement followed the failure of Toys ‘R’ Us in the US in March.

Other big names that folded last year include Shoes of Prey, Max Brenner, Roger David and Laura Ashley.

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