A manufacturer makes it against all the odds

Rising costs and cheap imports have caused many Australian clothing manufacturers to bite the dust. Koala Clothing had to twice rebuild its business from scratch, but it's still standing -- and stronger than ever.

You might think that being one of the last Australian clothing manufacturers would be pretty hard, battling high costs, the high dollar and cheap imports from Bangladesh. You’d be dead right -- it’s so tough they’re almost all gone.

But how about adding to that a few extra degrees of difficulty, like waking one morning to find your factory burned to the ground, or having your bank accounts cleaned out by the accountant you trusted.

Both of those things happened to the Georges family, owners of Koala Clothing Company in Sydney. But they’re fighters, this mob, and they’re surviving. No, they’re doing more than surviving. Koala Clothing is starting to do well, because it’s hard to find Australian-made clothes these days, and they’re in demand.

John Georges was 14 when he came to Australia from Lebanon with his four brothers and sisters to join their mother, Adibe. Their father, a butcher, had died seven years earlier from overwork and overdrink. At first the family lived on the streets of Beirut in desperate poverty (John wept as he told about those days) and then gradually scattered throughout Lebanon into boarding schools and orphanages.

Finally Adibe got a passage to Australia and the Australian Embassy in Lebanon was able to find her scattered children around Lebanon and bring them to her in Sydney, where they settled, another family of Lebanese migrants in the southern suburbs of Sydney.

John managed to get work in the rag trade. He worked hard, and was eventually successful enough to have his own factory in Padstow, at first with his brother and then on his own. He tried creating his own brand (Jad, after his two sons, Jason and Andre, and his wife Dorine), but mostly the business involved filling orders for other brands, mainly shirts and pajamas.

It was a tough, low-margin business, and when Phillip Longley decided in 1986 to sell the Koala brand that he had inherited from his father Charlie, John bought it. Charlie Longley started the business in 1932; his son Phillip took it on in the 1960s, but then this family business hit a succession dead-end -- Phil’s only child was a daughter who wasn’t interested.

John was making most of the garments for Koala and he and Phil became good friends, even though John was 37 and Phil was 60. They were 50/50 partners in Koala for a while, but after two years Phil said he couldn’t take the pace that his younger partner was setting and it was time to retire.

It was tough times in the industry (of course – is it ever not tough?) so John picked up the Koala brand for less than $400,000.

He stayed in Padstow for a while but eventually had to move to a larger factory in St Peters, where he and Dorine operated for 13 years, filling shirt and pajama orders for David Jones, Myer, K-Mart and most other big retailers, and raised to two boys.

In the early 2000s, the business was growing fast. Koala had a good name for quality shirts, especially school shirts, as well as flannelette PJs, and John was well known around the Sydney rag trade.

It was time to move to an even bigger factory, so they bought a unit at an industrial park in Woollongong Road, Arncliffe, not far from the station.

One year later it burnt down, a huge blaze. It was July 23, 2003, and John was just about to send out his summer indent orders. The place was full of stock.

And you guessed it -- he was dramatically under-insured. He lost $10 million in buildings and stock and got $2 million back on insurance.

Andre was 20, Jason was 14. The four of them rebuilt the factory and the business, working around the clock; asking for (and getting) extended terms from suppliers; and getting support from retailers, especially David Jones, says John.

Gradually they got back on their feet, partly with the help of an accountant named Derek Wells, whom John says was almost part of the family. “We loved him. He did everything in the back office of the business.”

Everything -- including robbing them. John says he went overseas on a buying trip and got a call from a supplier asking where his money was. John was sure he’d been paid, so, unable to raise Derek, he rang the bank to ask them to check the accounts.

Hmm, said the bank manager, your accounts are empty. John raced home to find no trace of Derek and all the bank accounts cleaned out. $5 million had been taken.

Derek Wells was eventually tracked down and got five years jail for fraud, but a week into his sentence he died. John doesn’t know if it was suicide, but thinks it probably was.

For the second time the Georges family, now with two adult sons working in the business, had to start again. Once again they had to ask suppliers for generous terms, and retailers to be patient, and once again they were.

So while most of the rest of Australia’s clothing manufacturing industry was turning up their toes or moving to Asia, this one, in a nondescript factory off Wollongong Road, Arncliffe, was surviving against all odds.

Now the Georges employ four office staff and 12 factory hands and turn over $4-5 million a year. What’s more, the business is growing, thanks to a reputation for well-made garments, growing demand for Australian-made shirts and pajamas.

And they’re also doing well for a reason that will give hope to Australian manufacturing in general: because retailers like their just-in-time service. Koala can knock up a set of flannelette PJs in no time and have it on a shelf at David Jones on Castlereagh St before a Bangladesh supplier has got it to the wharf.

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