Making fashion work with a business mind
- Josh Mehlman
- 15 December 2009
Photo credit: Anthony Geernaert
Sitting in their empty store in a newly built, eerily silent shopping centre in Sydney's CBD seven years ago, twin brothers Brian and Vincent Wu may well have wondered if they had made the right decision chucking in their well-paid jobs to start a fashion boutique.
"When we opened our first store in the Galleries Victoria, that centre was dead," says Vincent. "We would appreciate it just when a customer walked in - at one stage we hardly had any customers."
Even in their most optimistic visions for the future, they could hardly have imagined they would own four stores and a wholesale business, let alone become the exclusive Australian distributor for iconic UK clothing brand Topshop.
Learning from experience
From launching the first store in October 2002, it took nearly two years before the Wu brothers felt they were succeeding.
"It took us that long before we could say, ‘OK, we really understand the retail game and how it works', says Vincent. "We made a lot of mistakes and I guess we had to make those mistakes just because we didn't have the experience.
"We learned cashflow pretty quickly. We've got business backgrounds, so that was probably something we were stronger in. But the fashion side, like how to approach brands, which tradeshows to go to, it took us a while."
Brian's experience in the business strategy consulting arm of EDS, now part of Hewlett-Packard, was helpful for the business side.
"We used to create business plans for other companies, telling them ‘OK, is this going to turn profit?' and ‘How much cashflow are you going to need'," he says.
"When we decided to start Incu, we did a three-year business plan, best case/worst case - and that is a good exercise before you try and raise your capital. I think this industry is very tough to get capital in; it is one of the most risky industries to be in, purely because fashion changes all of the time."
"You see a lot of stores come and go because they've got this great brand vision but they don't understand the business side of it and then they usually drop off after two or three seasons."
By the end of those first three years, Incu had doubled the size of its store and opened a second shop in Sydney's fashionable Oxford Street. In April 2008, they opened a separate women's store in the Sydney CBD and broke into the Melbourne market in September 2009.
Staying ahead of the trend
A major factor in Incu's success has been the brothers' skill at choosing the brands and items customers wanted - or convincing them that these clothes were fashionable.
"About half of it comes from instinct," says Vincent. "Sometimes we've had to drop brands, even though they had the best sell through for the season before, because we had this gut feeling that they were just losing it a little bit. But it's also about analysing data and just talking to staff."
This edge has helped Incu stay ahead of the major chain and department stores.
"With the big department stores, a lot of it is what has sold well in the past," says Brian. "We've got to look forwards. It is a big risk, every season you've got to almost start over again and just make sure that you'll have the right labels in six months time."
In the old days it was a simpler process: just see what the fashions were in the northern hemisphere and wait six months for the seasons to change.
"These days, you have online stores, international magazines, you can't be far behind," Brian says.
As customers grew to trust the Incu brand, it became more of a fashion leader.
"A lot of our brands don't perform very well in the first season, it takes them a good two or three seasons before you start seeing some traction," says Vincent. "Customers always like to check out what's going on. Maybe they need to see it in some magazine or a blog and then they go, ‘OK'.
"It was the same with our store. In the first two years, people were checking us out. Most of them had never heard of the labels so they'd ask, ‘Are these dodgy cheap copies?' It took us a while to establish credibility. Now, if we put in an unknown brand, people trust it because it's within the Incu umbrella."
The fashion business is still a business
According to Brian, the fashion industry is creative and fun, but still requires a business brain to succeed.
"A lot of people are probably in it for the wrong reasons, but if you apply a level of professionalism and are business minded, as well as being creative, you can do quite well in this industry," he says.
"You see a lot of stores come and go because they've got this great brand vision but they don't understand the business side of it and then they usually drop off after two or three seasons.
"You have to have a clear idea of what you stand for, who you are targeting. It's really important to understand where you sit in the marketplace.
"So many people fall into that trap of thinking it's a cool industry and you get to go to cool parties and runway shows, but half of it is just making sure you know how to run your company. Even just making sure everyone is happy and feels part of the business."
‘Humility' is not a word one often hears associated with fashion, but it's one of the main values Brian and Vincent try to inculcate in their staff.
"We've built the business ourselves and I don't want our staff to just expect customers to come in and we can treat them any way we like," says Vincent. "I still want customers to feel we really appreciate them coming in and spending 10 minutes checking out what we've got, that's really important." #
