Oroton bags deal with US label
Oroton Group will introduce Australian shoppers to US fashion label Brooks Brothers, a 200-year-old brand that has clothed 39 American presidents, businessmen and celebrities, but will do so without its long-serving chief executive Sally Macdonald.
Ms Macdonald announced on Wednesday her departure from the retailer, which sells upmarket handbags, shoes and clothing. Her replacement will be Mark Newman, a 25-year veteran in the luxury apparel sector and, until recently, in charge of Oroton's Ralph Lauren licence and fashion range.
Only last week Oroton unveiled a shock profit downgrade, partly due to the removal of Ralph Lauren from its stable, which sent its shares tumbling 10 per cent lower.
The deal with Brooks Brothers will help plug some of the gap caused by the loss of the licence, with Mr Newman unveiling ambitious plans for the introduction of the brand in Australia and New Zealand, which will include as many as 25 stores being opened by 2019.
"We certainly see [Brooks Brothers] as something that will help to contribute to fill some of that gap from Ralph Lauren, but it won't fill it all and we are looking for other opportunities," he said.
Brooks Brothers has a niche position in Australia through its website which books just more than $1 million in sales a year. It also has 500 stores in 25 countries.
"It's a different kind of business to Ralph Lauren," Mr Newman said. "It has a very strong repeat customer. We will be opening full price stores, factory outlets, department store concession opportunities, and there is also a great wholesale opportunity."
Oroton will hold a 51 per cent majority in a joint venture company for an initial 10 years, with the first stores and possibly department store concessions to open at the beginning of next year.
The joint venture is expected to generate $3 million in sales in fiscal 2014, rising to $50 million in the fifth year of business.
But further deals will be needed to regain lost earnings from Ralph Lauren, which had accounted for 45 per cent of Oroton's $185 million in annual sales and a third of profits.
Ms Macdonald said after seven years at the helm of Oroton, it was "time to move on".
"I also feel pretty proud of the record of 25 per cent compound growth in profit over the last seven years," she said.