How Dion Lee survived fast fashion

DETERMINED not to become the next Aussie fashion victim, renowned designer Dion Lee has escaped to New York.

DION Lee is determined not to become Australia’s next fashion victim.

With the recent collapse of scores of clothing retailers including the likes of David Lawrence, Marcs and Rhodes & Beckett, as well as high-profile designers like Josh Goot and Johanna Johnson, failing to evolve can be fatal, the 31-year-old says.

Lee, who is currently in Sydney to open Australian Fashion Week with his outdoor showcase, last year relocated his design and sales team to New York. “I’ve been showing in New York for two-and-a-half years now, so it did feel like a natural progression to establish an office over there,” he said.

While wanting to retain his focus on Dion Lee’s Australian retail network of six flagship stores, operated in partnership with the Cue Clothing Company, Lee said the decision to relocate to US was the logical next step.

He said his label, which has dressed celebrities including Jennifer Lawrence, Cate Blanchett and Charlize Theron, was on track to end the current financial year with a 40 per cent increase in international sales and a 60 per cent increase in US sales.

Lee denied the jump to the US was an attempt to escape the fate of some of his peers. “Not at all,” he said. “I would say 50 per cent of our business is still domestic retail, so it’s still a really important market for us. Currently we have six stores, next year we’ll be opening our seventh.

“[But] I think we’ve reached a point in terms of wholesale growth in Australia where not a lot more growth can be achieved here. We were already showing in New York, and part of that has been bringing the team over for six-month periods, so really the business decision was to streamline that process, and to get a stronger understanding of the market and the retail landscape over there.”

Visibility, too, is key in the high-end fashion business. “The ability to really be present in order to promote the brand, that is an important focus for us moving forward,” he said. “We’d love to look at a store in New York ... but at this stage it’s important for us to establish the Australian retail business so we have a strong foundation for growth to occur.

“The next chapter is how we establish a strong back-end for the business, warehousing, manufacturing, distribution, we’ve still got a lot of work to do.”

Sammy Robinson before the Dion Lee show. Picture: Wendell Teodoro/AAP

Models walk the runway on day one. Picture: Wendell Teodoro/AAP

Lee will open his seventh Australian store next year. Picture: Getty Images/AAP

Lee disagreed that the recent string of collapses reflected an issue with Australian fashion. “I wouldn’t say there is a blanket rule for the industry,” he said. “I think the global retail industry is constantly changing and I don’t think it’s anything specific to do with Australian fashion.

“It’s similar in all industries, as we face the growth of the high street, high street is becoming bigger and faster, you have luxury brands becoming more competitive, and it really is squeezing that space. I wouldn’t say it’s a reflection of the poor state of our industry, I think it’s just changes in the global retail and consumer environment.”

For Lee, whose range is sold in more than 60 retailers globally including Net-A-Porter, Bergdorf Goodman, Selfridges and David Jones, the key to survival has been recognising and adapting to those changes — and not trying to compete with the fast fashion juggernauts on their own turf.

“The most important thing for us is brand differentiation,” he said. “Making sure we have product that’s not available anywhere else, making sure we’ve created our own space. The fashion business is based on design, and design really does need to be unique.

“You have to create a reason for people to come to you rather than the thousands of other designer brands. If I’ve learnt anything, it’s about products with a really strong signature that are not available anywhere else in the marketplace, that’s what people come to us for.

“When we try to do things that already exist, they’re not as successful.”

According to IBISWorld, the $19.1 billion clothing retailing industry in Australia is under intense pressure from low-cost overseas players like Zara, H&M, Uniqlo and Topshop, with industry revenue forecast to grow at an annualised rate of just 1.5 per cent over the next five years to $20.6 billion.

“Over the last five years, many clothing retailers have had difficulty adjusting to quite a shift in consumer spending behaviour,” IBISWorld industry analyst Lauren Magner said.

“Even though the GFC was quite a while ago now, the after-effects are that consumers have become accustomed to buying items on sale due to the heavy discounting that occurred as retailers attempted to clear excess inventory.

“Many retailers also struggled to compete with the streamlined, global retailers, which have quite significant economies of scale. They are able to offer constantly updated ranges at low prices.”

But Ms Magner said there was “definitely” still hope for Australian clothing retailers. “They need a strong brand positioning, they need to offer their consumers a clearly defined product offering, the need to understand who their customer is and what drives their purchasing decisions,” she said.

“The ones that may struggle maybe aren’t as progressive, not taking up new technologies, not innovating their supply chain. Consumers crave that seamless shopping experience across all channels.”

For Lee, technology has been keen not just in terms of online sales, but coordinating his business. “Since moving to New York the communications side of the business has become increasingly important,” he said, citing file-sharing tools like Dropbox.

“That has allowed us to have teams in Australia and New York working on the same live platform, to have two offices working across design, finance, retail, it allows us to communicate internally with a seamless approach.”

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Originally published as How Dion Lee survived fast fashion