Celebrating 25 Years: A behind the scenes look at one of the world’s fastest growing fashion retailers
“Great to meet you all. You’re off to a really nice start.”
Those were the parting words of Jim Collins – world renowned leadership expert and business coach - as he concluded a two-day strategy session with the Cotton On Group’s leadership team in his hometown of Boulder, Colorado back in February.
As the Australian-born global fashion retailer gears up to celebrate its 25th birthday, it reflects on what has indeed been a nice start…
THE EARLY DAYS
Marshal McLean, Group Executive of Communications and cousin of Cotton On Group Founder Nigel Austin, began his journey with the business working on the shop floor of the very first Cotton On store in Geelong, Australia.
“The store was located on Myers Street in East Geelong behind our grandfather’s butcher shop. It had a really eclectic and resourceful fit out, using recycled fittings picked up from an old supermarket,” recalls Marshal.
“It was managed by one of Nigel’s friends and offered customers a range of on-trend and affordable basics that embodied the quintessential Aussie style – effortless, relaxed, authentic and real.”
The store wasn’t located in an area considered to be a retail hot spot; instead it was situated in a residential precinct, away from the hustle and bustle of the city centre. But going against the grain didn’t stop the Group from being successful; a characteristic that remains at the heart of the business today.
“From day one we wanted to be a brand that was accessible to everyone, everyday – from the products we create to the locations of our stores,” said Marshal.
From that first store in Geelong, the Group grew steadily over the next 15 years. However it was the mid-noughties that proved to be a defining era in the business’ history; kicking off with the launch of its second brand, Cotton On KIDS, in 2005.
EXPANDING THE PORTFOLIO
After identifying a gap in the market for on-trend and affordable childrenswear, Marshal said the business’ approach to launching a childrenswear brand was straightforward – creating fun, age-appropriate apparel that reflected the lifestyle and spirit of Aussie kids.
“At the time we were still a relatively small business with around 35 people which is hard to believe when today we have a team of 22,000. I firmly believe it’s a result of our ability to sense what the customer wants and deliver it quickly – that’s what has enabled us to grow,” said Marshal.
Over the last 11 years, Cotton On KIDS has grown to 178 stores across nine international markets, and through listening and responding to its customer has launched a number of new categories including activewear, swim, bed linen and a dedicated ‘tween’ brand Free by Cotton On which launched in 2013.
From there – things only got busier. In 2007, the Group set about growing its brand portfolio further – launching lifestyle brand Cotton On BODY, establishing its philanthropic arm, the Cotton On Foundation, and acquiring a small apparel brand which it later transformed into youth fashion brand, factorie.
The Cotton On Foundation remains the lifeblood of the business today and was born after Nigel was asked by his local Parish in Geelong to make a donation to a healthcare centre in the small and remote village of Mannya in Southern Uganda.
Eager to see firsthand the projects he was donating to, Nigel travelled to Mannya where he instantly fell in love with the local community and decided he wanted to do more to make a positive difference in people’s lives.
Over the past nine years, through the support of its people and customers around the world, the Foundation has successfully raised $50 million, created over 5,000 educational places for children and is well on the way to achieving its vision to create 20,000 educational places globally by 2020.
The Group’s growth has never been limited to new brands, with stores in new markets always on the horizon. Over the last decade, the Group has entered 17 new regions including the United States, several countries across Asia, South Africa and more recently in April this year, the United Kingdom.
To continue driving its international expansion, Chief Executive Officer Peter Johnson said the Group has invested heavily in its five international hubs, located in New Zealand, South Africa, Singapore, Brazil and the United States.
Driven by over 8,000 passionate team members, these country hubs act as the Group’s eyes and ears on the ground, working hard to ensure its stores, brands and products are tailored to meet the needs and expectations of the local customer. Testament to the success of this model is the Group’s expansion into Namibia, which was lead by the team in South Africa.
“Namibia was a major milestone for the Group as it was the first time one of the business’ international hubs was responsible for driving the launch into a new region,” said South African Country Manager, Johan Van Wyk.
“Within the first few days of trade, Namibia propelled into the business’ top ten performing stores in a new country, and a short time later we opened the doors to the region’s second store. It’s testament to not only the Group’s localised approach to its global operations but the talent, knowledge and expertise of our global teams.”
Another key component of the Group’s global expansion is its licensing model which allows the business to trade in countries that restrict foreign entities from operating.
Spearheaded by longstanding team member Paul Heard, nearly half of the Group’s international markets are operated under three key licensing agreements including the United Arab Emirates, Qatar, Lebanon, Saudi Arabia, Oman, Thailand, Indonesia and the Philippines.
Paul’s career with the Group dates back to the mid-nineties when two friends who worked in the business offered him a role at the local distribution centre – which back in those days was a small warehouse in suburban Geelong.
With strong operational acumen, Paul was quickly asked to join Group’s production team, and over the next two decades he went on to lead a variety of functions including buying, merchandising, allocation and distribution, before commencing his current role as Group Executive of Licensing.
“What makes the Group so unique is its ability to nurture its people to be the best they can be and provide them with opportunities to grow and develop both personally and professionally. It’s ingrained in the culture and something that after 25 years continues to be an integral part of the business and its success,” says Paul.
Today, Paul is one of eight Executives in the business, and is responsible for building and nurturing relationships with each of the Group’s license partners as well as finding ways to take its brands and products into new countries and markets.
THE ROAD AHEAD
Having achieved sales of $1.8b last financial year, the Group’s sights are firmly set on being a role model and force for change in the retail industry, demonstrating that it is possible to be profitable and a loved social contributor.
“As our global operations grow so too does our responsibility to our people, customers and the communities we touch around the world. We’re therefore committed to making meaningful decisions at every turn - not just because it’s the best way of doing business but because it’s simply the right thing to do,” said Peter.
“Our Ethical Framework, including our 14 Rules to Trade, governs the sourcing, manufacturing and supply of our products and adherence to this code of conduct relies on the strength of the relationships we hold with our supplier partners – some of which were made 20 years ago when they met Nigel in China, when he had only a handful of stores in Australia.”
Listed eighth of 87 fashion companies in the world for mitigating the risk of exploitation in its supply chain according to Baptist World Aid Australia’s 2016 Australian Fashion Report, the Group says it is on the road to continuous improvement and is committed to ensuring sustainability and traceability of its supply chain.
“Our customers are eager to know where and by whom their clothes are being made and that the people making them are being treated fairly. We are proud of the work we’ve done with our supply chain to date but we’re not perfect and there’s always opportunity for improvement,” said Peter.
“From late-July we started to publically disclose the details of our suppliers with the goal of full disclosure by the end of 2018.”
The Group’s commitment to bettering its supply chain goes above and beyond sustainability and traceability.
In the last two years, the business has established the Bangladesh Mobile Health Clinic which has provided more than 25,000 factory workers and their families with access to free healthcare, became one of the first Australian retailers to join the Better Cotton Initiative, and, in partnership with Business for Development, is funding a sustainable cotton project which supports farmers in Kenya.
For the Geelong start-up come global fashion powerhouse, the last 25 years has brought with it many causes for celebration. With big dreams for the next chapter of its journey, founder Nigel Austin is adamant the best is yet to come.
“The passion, energy and determination of our global family is as strong today and it was 25 years ago,” he said.