KEY POINTS:
While Hallenstein Glasson made the headlines recently by deciding its new chief executive would be based in Australia, another New Zealand fashion company, EziBuy, is also gearing up for expansion across the Tasman.
EziBuy chief executive Mary Devine aims to boost turnover from $260 million to $350 million
in the next three years, thanks largely to the potential market in Australia.
One source of growth will be Ezibuy's recent purchase of Max Fashion, the womenswear chain that has an estimated turnover of $60 million.
Now a multi-channel player with catalogues for 35 brands, online retailing and stores, EziBuy will introduce Max to the Australian market this year through internet retailing and catalogue sales, and probably a small number of flagship stores.
Max already has 39 stores in New Zealand and aims at a target market of designer-conscious 18 to 45-year-olds.
"The opportunities are very much Australian growth in general and the launch of Max in the market," says Devine.
Coriolis Research retail analyst Tim Morris is excited about the Max purchase and sees it as a sign of things to come.
"Max was a very good move for EziBuy now that they have got scale. It's logical for them to do more and more concepts," he says, adding that Max has given EziBuy access to a set of different demographics.
"If they can make Max work, the world's their oyster," he says.
If they demonstrate that they can add value, he believes there will be more acquisitions like it.
"EziBuy is a great New Zealand success story but because it is privately owned and operating out of Palmerston North, you don't hear about it," he adds.
The Max purchase is going well so far, says Devine. "Three months into Max, it has been seamless; it was a good fit for the business.
"Max has the perception of being more up-market but it's still price competitive."
Devine believes Max can have a stronger brand, building on the retailer's Republic for NZ Women campaign. The retailer has launched the Max Foundation for NZ Women, a charity which in Devine's words will "support individuals and initiatives whose actions enhance the well being and advancement of NZ women".
Meanwhile, Devine says EziBuy has huge potential to grow in Australia, buoyed by the flourishing internet sales the EziBuy brands are already achieving across the Tasman.
Ezibuy already turns over about $100 million a year in Australia, roughly the same as its turnover in this country (Max provides the rest of its turnover) _ despite the fact that it started in New Zealand in 1978 and only entered the Australian market in 1992.
The EziBuy CEO thinks it's ironic that EziBuy has a $100 million turnover business in Australia, but "no one's heard of us".
A key strategic triumph for the company came in 2002, when it bought the Coles Myer database and the brands the company had for its catalogue business, Myer Direct, which sold women's apparel and home products.
"There was a change of chief executive. It was a small window of opportunity," says Devine.
She is originally from Christchurch but is now based in Auckland. She joined EziBuy in May 2006 after working at Lane Walker Rudkin, Survival Apparel and at Arthur Ellis.
Her brief was to drive EziBuy's growth and to find new investors for the company. The founders and majority shareholders, brothers Peter and Gerard Gillespie, wanted to find another party to take the minority shareholding previously held by Direct Capital. In February 2007, Devine enlisted a new shareholder, private equity company Catalyst Investment, which took a 43.5 per cent stake.
Catalyst, investors in Pacific Dunlop and the Just Group, "were judged as understanding the Australian market and apparel retailing", says Devine.
So far, so good. "They are in for anything up to five years and have been pleased with the progress," she says.
While the Gillespie brothers have now taken a step back, Gerard is still an executive director and remains involved in decisions about stock selection.
"They are lovely," Devine says of the brothers. "They are so humble; they just want the best for the business. We are very, very fortunate.
"We are in a very strong financial position for acquisitions _ anything we acquire has got to have the opportunity to be multi-channel."
EziBuy has become better known to the non-catalogue market in the past year, with nine stores opening throughout the country, including a large store at the Sylvia Park mall in Auckland.
A final two will open this year, one in Takapuna and the other in Dunedin.
"With the three channels, we are offering customers an opportunity to shop in any way which is most suitable for them," Devine says.
"We do not differentiate or provide preference to the channel, however we find the catalogue is the catalyst to initiating buying in all three channels.
"Our best customers will shop all three ways," she says.
EziBuy has come a long way from a single warehouse operation in Palmerston North in 1978. The private company has now built a warehouse distribution plant in Palmerston North, which is the largest of its kind in the Southern Hemisphere. The company has also invested extensively in IT.
Other areas of growth for EziBuy in New Zealand and Australia will be extending the niche markets, says Devine. As well as the four main womenswear brands _ Capture, Emerge, Urban and Grace Hill, Ezibuy has menswear and home catalogues.
The company owns the fast-growing Sara plus-size brand and corporate clothing company Profile also comes under the EziBuy umbrella.
Devine draws on the company's relationship with the world's largest catalogue company, the Otto Group _ EziBuy has the Australasian rights to two of the Otto brands _ for inspiration on the future.
The German company has expanded beyond apparel into health and beauty and jewellery.
A children's wear range is another obvious omission for EziBuy but the company says its 50 per cent share in JK Kids takes care of that.
EziBuy isn't alone among New Zealand retailers taking on the Australian market; Michael Hill and Pumpkin Patch are other proven success stories.
Coriolis Research's Tim Morris says an integration of the New Zealand and Australia retail sectors is under way. Australians are "snapping out of it" and coming to New Zealand with their stores as they regard this country as a state of Australia.
"On the flip side, there are 10 to 15 NZ retailers with a bit of nous who are coming to the same conclusion [about Australia]," says Morris.
