Cheap chic booms

Sandy McNeur says his Glen Innes store is a high turnover company trying to turn stock into cash quickly. Photo / Herald on Sunday

Businesses selling surplus and clearance fashion clothing are booming, thanks to the ongoing economic downturn.

The many retailer failures since the recession have boosted the supply of stock to enterprises such as the Designer Garage Sale, being held as part of New Zealand Fashion Week next week.

Latest Statistics New Zealand figures show retail sales are flat, with overall core sales in July down 0.1 per cent on June.

The clothing and softgoods sector was up on the same time last year but down 2.5 per cent for the month.

While there had been a gradual improvement in the fashion economy, the number of retailers going to the wall meant designers had been caught with product, sale organiser Paul Blomfield said.

"That's meant we've got really good stock to sell. It's not like it's been picked over already."

With 43 designers represented, this year's Garage Sale was the biggest so it had to take out more space at Fashion Week's Viaduct Harbour headquarters, he said.

Three of All Black star Dan Carter's Gas Clothing stores, Hamilton and Murray in Wellington and long-time designer label Keith Matheson are a few of the many upmarket boutiques that faced closure in the past 18 months.

However, all aspects of the fashion sector have been hit. Gisborne-based surf and streetwear retailer New Wave went into receivership in July and receivers were called into the five Main Beach stores in the lower North Island in June.

Outlet store Brand Clearance in Glen Innes had benefited, owner Sandy McNeur said.

It had just sold 5000 items, including the trendy Huffer and Federation brands for the receivers of New Wave.

It had also sold stock for the receivers of high profile Kiwi designer Liz Mitchell's business, and the liquidators of James and August, the underwear label set up by social page regular Sally Ridge.

Brand Clearance also acts for wholesalers and customs agents and brings in some stock, such as the Ben Sherman brand from Australia.

It has a customer database that it emails about upcoming stock and can turn over $50,000 in a weekend if it has a sale.

"It's a high turnover company trying to turn stock into cash quickly," McNeur said.

A range of 500 evening dresses had come in this week and he said gowns, which would have once retailed for $799, would go for $149.

The four Dressmart outlet malls around the country had recorded sales increases of 5-10 per cent in the past year, said Jonathan Armstrong, general manager of Asset Management which manages the sites.

Initially during the recession, there had been a lot of product flowing from mainstream retailers, he said.

Then that slowed. "We put that down to retailers reducing the amount of product they were buying in and managing their inventory."

The supply of product had since come back, indicating more confidence.