Oroton bags deal with US label
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.
Frequently Asked Questions about this Article…
Oroton has struck a joint venture to introduce the 200-year-old US label Brooks Brothers into Australia and New Zealand. Oroton will hold a 51% majority in the joint venture for an initial 10 years, with the first stores and possible department store concessions planned to open at the beginning of next year.
According to the article, Oroton and its joint venture plan to open as many as 25 Brooks Brothers stores across Australia and New Zealand by 2019, alongside full-price stores, factory outlets and potential department store concessions.
The article says Oroton expects Brooks Brothers to help plug some of the gap left by the loss of the Ralph Lauren licence but that it won't fill the entire shortfall. Company executives indicated they are also looking for other opportunities to restore lost earnings.
Ralph Lauren had accounted for about 45% of Oroton's stated $185 million in annual sales and roughly a third of the company's profits, so its removal contributed significantly to a recent shock profit downgrade and a 10% fall in Oroton shares.
The joint venture is expected to generate about $3 million in sales in fiscal 2014, rising to around $50 million in the fifth year of the business, according to figures cited in the article.
Sally Macdonald announced her departure, and Mark Newman—an executive with 25 years’ experience in the luxury apparel sector who recently managed Oroton's Ralph Lauren licence and fashion range—was named as her replacement.
Brooks Brothers already has a niche position in Australia through its website, which books just over $1 million in sales a year, and globally the brand operates about 500 stores across 25 countries.
Oroton plans a mix of sales channels for Brooks Brothers, including full-price stores, factory outlets, department store concession opportunities and wholesale distribution, aiming to leverage the brand's strong repeat-customer base.
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