End of local lingerie as Bendon quits NZ

By Dita De Boni

Iconic Kiwi lingerie maker Bendon has moved operations offshore sooner than widely predicted.

Just two months ago the chief executive of Bendon's parent company Ceramco, David Appleby, had said the company would maintain local manufacturing and distribution.

Yesterday Bendon announced it would cease operations within six months, jeopardising 400 jobs and ending 50 years of New Zealand-based production.

After the move, costing the company an estimated $9 million, nothing bearing the name Bendon will be made in New Zealand or Australia.

Manufacturing will move to new and existing plants in Indonesia, Phillipines, Thailand and China.

The move signals the end of the last major New Zealand-based manufacture of mass-produced women's underwear.

The chief executive of the Apparel and Textile Federation, Paul Blomfield, says Bendon's disappearance is a major blow to the industry.

But he says the move is not surprising as the majority of moderately priced underwear is imported and sold through large discounters such as The Warehouse, Deka and Farmers.

"The people I am most worried about are the smaller suppliers - the labels and tags people, small companies supplying special thread - the infrastructure of the industry is shrinking, and if the big players fall over, everyone is at risk."

Another tragedy is that rural-based apparel plants are significant employers of women, minorities and immigrants who, while highly valued in the apparel trade, will not be able to transfer their skills with manufacturing jobs becoming increasingly scarce, he says.

Bendon foreshadowed a move in June of this year when it transferred its operational headquarters across the Tasman. The company hinted at that time it might eventually get out of manufacturing altogether, but that some level of production would stay in New Zealand.

Yesterday, managing director Hugo Venter denied ever giving false hopes to Bendon workers.

"I was very pedantic myself and never ruled out the possibility of moving our manufacturing," he said.

"It has been a very tough decision and we aim to support our workers with career counselling and other services to reduce the impact of the closures."

Bendon has successfully boosted export sales as the domestic market has become more competitive, another contributing factor to the move offshore.

Overall sales were up 10 per cent last year but Australian sales soared 23.8 per cent.

Within three years Australian sales are predicted to make up 70 per cent of the company's business as opposed to 40 per cent in 1998.

But Mr Venter said there was "no question" that despite massive restructuring and a reversal of the company's declining profits - reaching $4.07 million in 1999 from $1.14 million the previous year - non-tariffed imports were a major reason for taking Bendon offshore.

"Considering from our perspective that in a few years' time tariffs will be reduced to nought, we had to make a very tough decision but one which made absolute sense from a financial point of view," he said.

"It simply got to a point where no time was a good time, and we had to set ourselves up for the future survival of the company."

Mr Venter said he did not foresee any decline in sales from the move, and believed exporting product back to New Zealand from Asia would still be more profitable than local manufacturing.

"The climate of the market in New Zealand would mean we would have to raise prices to keep profitable, but we haven't done that."

He said the company was currently negotiating to sell its Te Rapa plant to another apparelmaker, which would save the jobs of some of the 245 workers there.

He said the 13 production line designers working in East Tamaki could also keep their jobs if the Te Rapa plant was successfully on-sold.