Reborn Australian Fashion Group looks to avoid the ’extravagance’ in the industry

Australian Fashion Group has been reborn after falling into administration, with its new chief executive determined to grow sustainable global brands from Australia.

Australian Fashion Group lead designers Siham Elmawey (Finders Keepers & C/MEO), Madeline Little (The Fifth Label) and Gemma Cassar (Keepsake the Label). Picture: Keryn Stevens

The fashion industry has a habit of getting caught up in the its own hype – and the attendant profligate spending which goes along with it – but new Australian Fashion Group chief executive Michel Boutin won’t fall into that trap.

Over the past 10 years he has consulted to and worked for brands including Wayne Cooper, Leona Edmiston and Rhodes & Beckett, and is now a few months into his new role heading what was previously Adelaide-based Australian Fashion Labels.

He’s blunt about what contributed to the failure of that company, which went into administration in early 2021 with $12m in debt including $1.9m owed to the South Australian government: staffing levels which were “a little bit ridiculous”, too much spent on overseas travel and expenses generally, and not enough attention given to what people actually wanted to buy.

It’s a trap he says is something of a curse within the sector.

“It’s the age-old issues we have in fashion,’’ he said.

“We get caught up in our own self-worth and believe that we’re at a certain level of engagement with our customers and end up spending way too much money and the money’s not coming in.  “And that’s exactly what happened. No matter how many different angles you paint it, it is a very common theme as you can see with a lot of the companies that have gone into administration or liquidation in the last five to 10 years. That’s what happened.

“The good news is the South Australian pride in this business is intoxicating. It’s a really nice feeling.’’

Australian Fashion Group’s new chief executive Michel Boutin. Picture: Keryn Stevens

Mr Boutin said the industry was “plagued with” a sense that what came from outside Australia was better, and that’s just wasn’t true.

“You can easily have a business in Australia that designs and answers world trends, and flourish pretty well with brand that is on a global footprint,” he said.

“The group has four brands – you can say five if you include the e-comm store which is a brand in itself.

“They’ve got great legs, great bones, great skeleton to really transform not only the internal business but also how they approach the business worldwide.’’

AFG’s brands are Finders Keepers, Keepsake, The Fifth Label and C/MEO Collective, while the online store is BNKR.

Mr Boutin said the group had done a good job of retaining its key staff since it went into administration, after which it was bailed out by a group of investors including SA’s chief entrepreneur Andrew Nunn.

While the company had not performed well for several years leading up to its demise, posting more than $9m in losses from the 2016 financial year to 2018-19, the existing entity did bring with it the sunk costs of entering several markets, which Mr Boutin said was a great asset.

“The cost of entry into China, the cost of entry into the US and Europe was already paid for by the former entity and the former owners. That’s the one thing they did right, and this new venture can capitalise on that.

“There’s not many Australian brands that have a fully fledged office in mainland China, let alone in the US and Europe.’’

Mr Boutin said the pandemic had naturally changed – and made more affordable – the way designers researched emerging trends.

The design team had been used to “extravagant trips” in the past, which was not uncommon in the sector, but that had all changed.

“Designers, whether they’re working for us or working for another brands, need to refocus their efforts and really do their trends and their research digitally now, and through partners that are on the ground elsewhere.’’

The group has wholesale partners in Europe, the US and China, with the US relaunched recently.

“In Europe our partner’s based in the UK but their tentacles reach as far down as Italy and even the Middle East, believe it or not, so we’re getting some good wins on the board,’’ Mr Boutin said.

Mr Boutin said a key asset of the business was its database, and a lot of work would be done nurturing and growing that base, which had become accustomed to fire sales and a lack of brand continuity.

“We’re going back to them with a story with proper trends and proper DNA for the brands,’’ he said.

“It’s about making sure we tend that database and get the business back on track.’’

Mr Boutin said his role was a “balancing act’’ between the creative and operational sides of the business.

“My first question to any business is: who are you and who’s your target market?

“When a business has a hard time addressing that or is still trying to define that, then that’s a problem.

“You need to focus on that first before any creative concerns. Once you have that voice and that DNA established and everyone agrees that this is the path, then you start designing to that.’’

Mr Boutin said many businesses got this the wrong way around, which would eventually lead to failure.

“That’s been a huge emphasis for us, a lot of soul-searching and really interviewing our designers … interviewing our customer base. We’ve spent a lot of time with the data, and understanding what was needed or what was missing. That includes both wholesale and retail.’’

Mr Boutin said wholesale customers wanted to make money, while retail customers were focused on what they wanted in their wardrobe.

“We’ve got it right now. We’ve got clear paths for all five brands, we know what we’re doing, we’re busy investing a lot in digital on our operational side of things.’’