From Morrinsville to Manhattan...

Designer Annah Stretton with a masked model at Air New Zealand fashion week. Photo / Martin Sykes

Annah Stretton founded her fashion empire on a Waikato dairy farm, and in excerpts from an upcoming book shares secrets on how she did it

Annah Stretton, self-described designer of "fabulous frocks", has not always garnered acclaim from the fashion pack but loyal customers have seen her clothes become one of New Zealand's most successful fashion labels.

In her book Wise Heart, she details the business strategies that have taken her from her Waikato beginnings to last year being recognised as New Zealand's Veuve Clicquot businesswoman of the year.

Stretton began her eponymous label as a mother of two small children from her Morrinsville home.

The business, still based in Morrinsville, has now grown to become a multimillion-dollar fashion brand with 30 retail stores and 150 staff, and associated business magazine Her.

With a grapevine bearing her name in the Veuve Clicquot vineyard near Reims, France, Stretton has ambitions to grow her multimillion-dollar business internationally.

Over 10 chapters she draws on anecdotes from her own business and life experience to provide tips for business success.

Stretton says a great business has three ingredients: discipline, passion and integrity.

"It's that simple. Find these in yours and the rest will just fall into place."

In 1998, I took a lease on a store in High St, in central Auckland. In those days, High St was the fashion strip in Auckland.

All the fashion-forward designers had stores there or nearby and they still do - although the focus has now moved a bit to other areas of the city like Newmarket's Teed St, where I now have a store.

The fashion district is a network of narrow streets with beautiful old heritage buildings, cafes on every corner and a cobbled pedestrian-only street down Vulcan Lane.

The stores are often old, with polished wooden floors and ornate ceilings.

They are strong spaces full of character, with long histories.

The store I leased wasn't large, but it was right in the middle of the district.

Workshop was on the corner; Zambesi and Karen Walker were nearby on O'Connell St, and World was up the road.

I had reached another milestone: finally, a store in one of the most iconic streets in New Zealand fashion.

By that point, the days painting my store were over, and we'd put together a fitout that reflected the way in which we wanted to present the Annah Stretton label in this area.

It didn't work.

On the one hand, we hadn't yet established our design credibility, which counts for everything in getting the five per cent of shoppers who frequent this area to shop with you.

Shoppers saw us as a womenswear brand from Morrinsville with generic clothing roots and no design integrity.

The shoppers on High St, while very fashion-forward, had no connection to my brand, so why would they shop in my store?

Our brand had no fit with this retail area. After six months, I called it a day and sold the lease to a shoe shop.

It wasn't a total disaster - it turned out that one of the biggest customer bases for the store was American tourists visiting Auckland, which made me realise the international appeal of the clothes and made me certain that, one day, I would crack the American market.

I also managed to sell the lease for a sizeable sum of goodwill, such is the desirability of the strip.

I withdrew and focused on setting up stores in areas that I knew the brand would fit while continuing to build a very loyal customer base of women who really loved my clothes.

I wasn't a fit for High St at that point, and to an extent I'm still not, so I have never sought to take a site there again.

Most of the fashion labels in this country are chasing a very small portion of the market, and I have always appealed to a broader constituency.

The challenge for me in this experience was that I had stopped listening to my gut.

I was so keen to prove that I belonged in the high-fashion world that I didn't stop to think about my product and its demographic.

Annah Stretton simply didn't work on High St - but it does work in 30 retail strips around the country.

It works in high-income areas like Newmarket and Ponsonby, and my customers love my brand so much that they regularly send photos of themselves dressed in the gear as well as emails detailing how the clothing made them feel, heralding the service that they have had at point of sale.

If I'd stopped to listen to my gut and worked it through instead of trying to prove myself in a realm that was irrelevant, I wouldn't have taken the lease.

I possibly always knew that I wasn't a fit for High St, but I was so proud of the brand and so keen to change perceptions that I ignored my common sense.

Looking back, it's obvious that it was never going to work in the way that I had hoped.

Fortunately, it didn't take too long for my instincts to tell me that the trading wasn't going to improve and I had the good sense to listen and get out.

My focus on running a profitable and sustainable business certainly helped with that.

I didn't deliberate for too long - there's nothing to be gained from doing that.

But it did make me think about how I approach new retail locations.

At the end of the day, I have to be sure that if I'm going invest in a new store, it will work for the labels I sell.

I need to know that our brand is a fit for the area.

If I am sure that it will work, I move fast and negotiate hard - it's all part of making good business decisions with my head not my heart.

SOME OF my most valuable business lessons have come about because I didn't know everything.

I often say that failure is the foundation stone of my success: it's so important because if you are not failing, you are not extending yourself.

If you're not tripping and falling, you're not pushing boundaries and investigating the opportunities that come your way.

You will become blinkered to new ways of doing things.

Besides, something is only a failure when there is nothing to be learnt from it.

Otherwise it's just a very normal part of your business growth; remember, there is no stigma to failing - it is simply business, not personal.

I've had many failures in the course of my business: product lines that didn't work, frocks we shouldn't have produced, and retail stores that were incorrectly sited.

My first issue of the magazine was so riddled with spelling errors that the Waikato Times ran a story on how badly executed it was - nothing like that to encourage a girl to engage a great proofreader; in fact, we recruited two!

One of my earlier - and potentially very expensive - lessons was in the area of intellectual property.

As I've mentioned before, my first label was inspired by a pair of Sam & Libby shoes I had bought in the United States.

I liked the name on the shoes and the design of the label, and so I copied it lock, stock and barrel.

I didn't change one thing: I copied the name, the colours and even the shape of the label.

Then, a short time later, when I decided to head out and start my own stores, the obvious thing was to use the Sam & Libby label.

That only lasted so long.

A couple of years later, the real Sam & Libby started clearing their shoes through The Warehouse.

'You're making shoes now!' people would say as they came into the store. It took me a while to work out what they meant.

But then Sam & Libby came to New Zealand properly, only to find that not only their name, but also their brand, had been trademarked.

The only way I could get away without paying them a lot of money was simply to offer to hand everything over to them, saving them a small fortune in legal fees for registering trademarks.

Overnight, I rebranded my own stores as Annah S and never again did I make the mistake of copying anyone else's brand.

It's so important for businesses to have their own identities, to innovate rather than imitate, but in my haste to drive the company forward I didn't see the value in making sure my branding was my own.

I had also come from a generic trading environment that had very little problem copying what was around it, all in the name of cost savings.

The brands that eventually evolved are a product of that lesson: they're my name, in my handwriting.

Although I wouldn't recommend a mistake on this scale, it's even worse to play it safe in an effort to avoid making mistakes altogether.

Great business doesn't come from playing it safe; it comes from taking risks.

There are always ways you can assess the worst-case costs and whether you can afford this - and it's important to do that analysis - but at some stage you will have to make a call on whether you take the opportunity or not.

If you don't, you will simply stifle the growth and diversity of your business.

When mistakes happen, you need to reflect on what went wrong so you can work out how you might approach it differently the next time.

In some instances, there will be nothing you would change.

You will conclude it was just the wrong moment, wrong time.

But there are other times when, in hindsight, you'll see exactly what went wrong and there are lessons that can be learned.

When failure happens, embrace it. Reflect on it, learn from it, then move on.

It comes down to black-and-white thinking: there is never anything to be gained from dwelling on it.

Never look back.

Once you've identified what the lesson is and what you would do differently next time, internalise it and move on.

As the saying goes, only a fool makes the same mistake twice.

But in my view it's an even bigger fool who dwells on that mistake.

* Wise Heart is published by Random House and is on sale Friday September 17 for $39.99.