The Business Herald’s markets and banking reporter.

Aussie firm closing fashion stores

Clothing chain for 40-plus women has struggled in the NZ market because of inadequate marketing, say staff.

Eight of the 19 New Zealand Suzanne Grae stores are in Auckland. Photo / Natalie Slade
Eight of the 19 New Zealand Suzanne Grae stores are in Auckland. Photo / Natalie Slade

Staff at women's clothing retailer Suzanne Grae are blaming the fashion brand's failure to gain traction in New Zealand on insufficient marketing and poorly performing stores in the big cities.

Around 100 jobs are at risk after the Sydney-based firm - part of Australia's Sussan Group, which also operates Sussan and Sportsgirl stores across the Tasman - yesterday announced a "last resort" proposal to close its 19 stores in this country, including eight in Auckland, over the next 11 months.

"Suzanne Grae has operated in New Zealand since 2006, but despite our best efforts to meet local customer requirements on range, price and service we have not been able to establish a sustainable business," chief executive Carole Molyneux said.

Molyneux was not made available for an interview yesterday and the company, which said the proposal followed a thorough review of the business, would not elaborate on the issues that led to its poor performance.

But shocked staff spoken to by the Business Herald yesterday attributed the retailer's problems to a lack of investment in advertising.

"If you don't advertise you don't get business and there's a lot of competition," one staff member said.

A worker at another store said Suzanne Grae's retail sites in urban areas such as Auckland had been dragging the business down.

"They should have stuck to provinces ... the provinces are where the clientele is."

Molyneux said the business - which trades in the "value fashion segment" and is aimed at 40-plus women - remained successful in Australia where it was growing customer volumes, despite a challenging retail market.

"A final decision [on the proposal] will depend on the outcome of the employee consultation process."

Six Sussan stores were rebranded under the lower-end Suzanne Grae brand when Sussan pulled out of New Zealand in 2011. Sportsgirl bailed from this country in 2000 following an unsuccessful search for a buyer.

Retail analyst Tim Morris, of market research firm Coriolis, said the local women's fashion trade was a very tough market.

"The only people that have got any hold on it are the iconic names at the top and the cheap and cheerful ones at the bottom ... everyone else floats in the middle and struggles," Morris said.

Sussan Group is owned by its executive chairwoman and chief executive, Naomi Milgrom, and operates more than 550 stores employing more than 4500 people across Australasia.

The Business Review Weekly valued Milgrom's personal fortune at A$375 million ($460 million) last year, making her Australia's seventh richest woman.

In Auckland Suzanne Grae operates a store on Broadway in Newmarket and has retail sites in Sylvia Park, Glenfield, St Lukes, West City, Lynn Mall, Shore City and Manukau shopping centres.

The company

19 stores in New Zealand, including eight in Auckland.
100 Staff facing job losses.
•Part of Australia's Sussan Group, owned by Naomi Milgrom, Australia's 7th richest woman.

- NZ Herald

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