Cue Clothing recruits industry veteran to turn around business

Rod and Melanie Levis at Cue’s offices in Surry Hills with model Jessica Bertoncelo. Picture: James Croucher

Cue Clothing is understood to have been working with restructuring expert Mick Calder to turn around the embattled retailer that is now set to appoint one of the top industry veterans to its board.

DataRoom understands that Eric Morris, the former boss of The Pas Group, which included apparel brands like Review Clothing, Black Pepper and Yarra Trail in its stable, has been appointed to the board of the company.

Cue, which includes the Veronika Maine clothing brand, was sold to British-based special situations investor Hilco Capital by the Levis family in April.

It comes after Dion Lee Enterprises, with which Rod Levis previously had a partnership and owned a stake in, collapsed last year.

The company appointed former Country Road Group executive Melanie Remani, who ran the Trenery brand, as its new chief executive.

She starts in the job next month and replaces Simon Schofield, who has joined Myer to run its private label fashion lines.

Mr Calder is a former KordaMentha and PwC partner and turnaround expert that now works at Sunnymead Advisory.

Sunnymead partners with business owners and boards to improve performance.

As well as running The Pas Group, Mr Morris was also the general manager of private brands for Myer until 2005.

The changes will mark an end of an era for Cue, which has previously prided itself for manufacturing its clothing in Australia.

However, the understanding is that the strategy under the new leadership team involves manufacturing more of its clothing offshore to reduce costs in what is becoming an increasing competitive environment in the Australian apparel industry.

There had been some question marks over whether Hilco, known as a restructuring group and a lender, may ultimately place the business into receivership.

It was previously a lender to David Jones.

However, sources say that the opposite is true – for the time being at least anyway – where Cue is hiring top industry talent in a quest to turn the business around and improve performance.

The Australian reported on Tuesday Country Road was closing stores and cutting costs after being hit by what its South African owner, Woolworths Holdings, previously declared was a “retail recession”.

However, sources say that retailers have seen an improvement in July sales and more buoyant conditions are anticipated with the expectation that interest rate cuts are on their way.

Cue was established in Sydney with its first store in 1968 and had designed its fashion from its head office in Sydney’s Surry Hills.

It has stores in all major cities throughout Australia and New Zealand.

IBISWorld says clothing retailers face increasing competition from direct-to-consumer sales and online-only retailers, which allow manufacturers to bypass traditional channels and reduce costs. The shift has led to declining revenue for wholesalers as manufacturers target niche markets and upscale boutiques.