School stitch-up

UNIFORMITY: Pupils from Westlake Girls head off for their Easter break. Photo / Neville Marriner

School uniform and stationery dealers are stitching up cosy little deals with principals, forcing parents to dig deep into their frayed pockets. Now, families are demanding the Government take action to end these expensive monopolies. Susan Edmunds reports.

Single mother-of-two Emma Harford is always careful with her money. She lives in the Auckland suburb of Onehunga, conveniently close to the discount stores of the main street, and the outlet clothing stores of the cavernous DressSmart complex. The 36-year-old knows which outlet shops offer the best deals and, while she admits she likes nice things, she never pays over the odds to get them. Never? Almost never.

At the start of term, when it's time to buy her two sons their school uniforms, she must head across the city to the expensive streets of Remuera because both boys' schools require their uniforms to be bought from a sole, exclusive supplier who can set his prices with no reference to the market.

Harford is a student, surviving on a benefit. So when, at the start of the year, she was landed with a $1000 uniform bill for her two boys from the School Uniform Centre, she was aghast. Older son Kobi Paraha-Ochi, 13, attends Onehunga High School; younger son Cole, 10, goes to Royal Oak primary school. These are not blazerand- tie private schools. The problem for Harford - like tens of thousands of other New Zealand parents - is an exclusive deal drawn up between the school and the uniform retailer, without reference to the parents who actually pay the bills.

Overseas, such anti-competitive school uniform and stationery deals are frowned on or banned but here the Government refuses to intervene. Tauranga Boys' College was granted a court injunction this year to stop a local company supplying its school uniform at a cheaper price than the school shop, despite having previously authorised the business to manufacture and sell the uniform. With no backing from the Government or the courts, parents are forced to wage the battle against unfair prices alone.

The Commerce Commision has received 26 complaints about these deals and is so concerned that it has issued guidelines, saying schools should not prevent other retailers from selling their uniformto hike up prices at the approved school shop. "While exclusive arrangements can provide benefits for schools, they also reduce parental choice and might result in higher prices. There is commonly also a lack of transparency in many supply arrangements," the Commission warns.

Harford finds it galling to pay $66 for a pair of shorts or $62 for a plain grey shirt for Kobi, when she wouldn't spend that kind of money on her own clothes, much less things the boys will grow out of within 12 months. Parents should be allowed to buy cheaper versions of the uniform items, she says. She pays $49 for Cole's blue polo shirt with an embroidered school logo but she would prefer to buy a similar one for $6 from Farmers or The Warehouse and sew on the monogram. Better still, she says: "I don't know why they can't just have a plain white shirt."

Plain white shirt? School Uniform Centre managing director David Kranz laughs.

"There are 27 types of white, blue-white, green-white," he explains. "Schools want consistency of colour and there are lots of variables."

Examining public messageboards such as Trade Me, it's obvious that many parents are angry at being forced into exclusive uniform deals.

Kranz agrees parents will pay more for one of his white polo shirts than they might at The Warehouse - but he says they accept that it's worthwhile for the quality. "Parents do complain about price but not as much as they used to."

There are additional costs for his Remuera Rd business, he says, in manufacturing short-run clothing ranges - a few hundred Royal Oak polo shirts here, a few hundred Onehunga High shirts there. If schools change their uniforms or switch to another supplier, he could be left tens of thousands of dollars out of pocket, with stock he is unable to sell.

Kranz has 70 schools on his books. He says not many of them are exclusive agreements and there is nothing to stop the schools going to someone else, as well.

But in many cases it was not worth a supplier's time to stock a uniform unless they could guarantee sales to the whole school. "A school of 200 - 100 boys, 100 girls, sizes spread over four or five years - with 30 students in a year with two or three sizes. It's not worth having competing suppliers."

Royal Oak and Onehunga High say they don't even benefit from their exclusive three-year contracts with the School Uniform Centre - the deals are purely about convenience for the school staff in not having to worry about commissioning and policing the uniforms.

Onehunga High associate principal Tom Webb says the deal's about quality control. And up the road at Royal Oak, principal Linley Bruce says she inherited the contract when she started at the school and may reconsider it in the future. "I'm not a huge fan of uniform, to be honest, because they're only little kids," she says. "But it's quite nice for me, as the principal of a busy high-decile school having to oversee all sorts of fundraising, to not have to worry about the uniform - to just say, 'go forth and buy'."

More often, fundraising is the incentive for cash-strapped schools to buy into the cosy deals. Big clothing and stationery chains flick the schools a little bit of cash from the inflated margins they charge on the clothes and exercise books. Smaller retailers may provide payment in kind - for instance, free sports kit for the First XV.

Stationery retailer OfficeMax says there are 300 schools participating in its MySchool programme and $860,000 has been raised for schools in the past five years.

And Schooltex, Postie Plus' school uniform division, offers up to 10 per cent of uniforms' purchase price to schools.

Bernie Donaldson's 11-year-old grandson goes to Taieri College in Mosgiel. In his first year in uniform, she was handed a $450 bill. "You can buy a plain polo shirt for less than $10. At K-Mart, they might be a slightly different colour but they're $2 or $3 ... [The uniform version] is up to about $20."

Taieri College pupils must buy their uniforms from Schooltex, she says, meaning the school gets a cut of the purchase price. Donaldson has no problem with that - as long as they're transparent about it. But she says they're not.

"As I paid I was told how great I was, as that was a 10 per cent donation I was making to the school. This amounted to $45 but they would not give me the discount." She then went down the road to PaperPlus to buy the specified stationery, only to discover they too were handing a cut on the deal to the school - all up, an extra $50 mandatory donation to the school.

That was bad enough, she says, but then she was sent a request for another $90 donation to the school. "I will be deducting the $50 from this. If they had asked for $140 I would have moaned but paid it but I do not like to be forced to pay a donation when I have no say in where I do my shopping.

"They say the uniforms are really good quality and they last a long time. But kids from 5 to 11 grow. And they still want designer things for the weekend. So you've got designer clothes they're growing out of and expensive school uniforms they are growing out of."

Active Schoolwear told the Herald on Sunday last weekend that it had been the victim of corporate bullying, after Tauranga Boys' College won a court injunction to stop it selling the school's uniform.

Principal Robert Mangan cited quality issues as the reason for the action, saying imitation uniforms were not always the right colour - even though Active Schoolwear had previously been an approved supplier. But after the school decided to open its own uniform shop, it cut Active Schoolwear out of the business by arguing before the court that it owned the intellectual property to its school logo.

Active Schoolwear managing director Tineke Bouchier, the former co-host of It's in the Bag, said she was told two years ago the school had signed up with an exclusive stockist and she would have to buy the uniforms through them. The school was now charging more for the uniforms under the new arrangement than it had when she stocked them, she said.

But the matter was settled out of court - Active agreed to stop selling the uniforms and paid the school's legal fees - because Bouchier said she could no longer afford the battle.

Mangan would not respond to questions.

But, according to Principals' Federation head Paul Drummond, the profit cuts offered to schools are usually not enough to sway the decision on uniform and stationery suppliers. Instead, he claims, convenience and quality control are more important. "In my experience, the amount of money being made is very small."

Drummond does agree with the Commerce Commission that there is an onus on schools to clearly explain to parents why they were involved in the exclusivity arrangements, and what the school got out of them. "Schools can get a bit complacent," he admits. "They should routinely let parents know where they are getting deals, why and what margin they get from them, and offer an 'out' option to parents who really don't want to."

It's not just about the money - it's about the quality. That's the position taken by the Principal's Federation and by higher-priced retailers like Remuera's David Kranz. Schools don't want children turning up in a range of similar-but-different items, in slightly the wrong colour, or in clothes that are falling apart at the seams.

Kranz says he's making long-lasting, quality uniforms and, because of the short runs, the profit margins are low.

That, in itself, is contentious: Onehunga's Emma Harford says the quality of the uniforms she buys her sons is not great.

Her grandmother and mother are both keen sewers and were unimpressed. She thinks the School Uniform Centre must be making a big profit: "The unit cost will be nothing."

But the quality argument is even harder to sustain when it's applied to low-value bulk items such as pencils and exercise books - another market in which schools are signing up exclusive deals. Drummond says it can be hard to start the school year if every parent is shopping around, trying to find the best price on every piece of stationery - and that is why schools are insisting parents buy all their children's stationery in big packages from approved retailers.

Stationery supplier OfficeMax seems to be cornering that market, with more than 400 schools signed up. Its MySchool system requires parents to log in to its website, input their child's year and subjects and purchase the stationery online.

OfficeMax education and retail manager Suzanne Flannagan says: "MySchool provides the infrastructure for schools to run their own online school shop without any set-up costs. This saves the school money by ensuring they don't need to print off school lists and minimises their impact on the environment."

So is that the reason schools are signing up with OfficeMax - to save a buck or two on photocopying stationery lists for the good of the Amazon rainforests? Uh-uh. The real reason is that $860,000 that the stationery company has paid to schools since 2007.

Flannagan says the company will price-match any written quote for the same group of products from a single supplier.

But because OfficeMax is the sole supplier of some of the products children need, parents will not be able to get a written quote for the same group of products from any other single supplier - making the price-match offer somewhat hollow.

Megan O'Donnell, who has one daughter at school in Canterbury and a son about to start, says parents are being ripped off.

Her family survives on one income - but in her daughter's first year of school, they had to pay $40 to OfficeMax to buy the schools' listed stationery package, then another $200 for her uniform. "It annoys me that they have to do it that way to raise money. Not every family in a decile 9 school catchment is wealthy."

O'Donnell says she'd get a better deal by shopping round - and she's probably right. The Herald compared the 14 stationery items listed by a North Shore secondary school this year, revealing they cost $128.79 from OfficeMax but only $114.76 from The Warehouse. The $14 difference is more than the share going to the school - meaning the retailer profits from the exclusivity deal by pocketing the difference.

For Diane Crawford-Errington, of Whangarei, it's not just the price that's upsetting. She has two children at Kamo High School.

She says a letter from the school detailing its arrangement with OfficeMax really got her back up. In the past, the school has ordered bulk supplies of stationery and parents could pick and choose whether to buy it from the school or not. This time, they were being given no option.

Crawford-Errington says: "I don't want to use OfficeMax, I'd rather use my own supplier. It was a nightmare to get the list. In the end, I went through with the purchase and printed the list off so I could buy it elsewhere."

Some of the items were more expensive from OfficeMax than they were elsewhere, but she says what really upset her was losing the right to choose. "I have no problem with the school doing deals - the issue was being told what I had to do."

The deals have infuriated Mark Powell, chief executive of The Warehouse, who says he was stunned by the cost of exclusive uniform and stationery deals when he moved here from the UK.

"We have a real concern about this," he says. "It's not about schools having an arrangement where if you buy from a supplier, the school gets income. It's much more the school saying, 'You must buy off this supplier,' and refusing to supply a list. All we want is fair competition."

Powell says he has no problem with schools telling parents that for every dollar they spend at a certain shop, the school would get 10 cents, for example. "But if they say you must buy off this supplier, I get very concerned. We understand the pressure on schools. I'm on the board of trustees of a secondary school ... but there's a big difference between doing something for fundraising and restricting choice."

In Britain, he says, schools might specify a blazer but it would be up to parents to source their own generic trousers or skirts.

There, Schools Minister Ian Wright sparked a furore in 2009 when he warned schools could be taken to court for forcing parents to pay high prices for uniforms supplied by exclusive suppliers. Wright said the deals could amount to an illegal cartel.

UK authorities have now issued guidelines to school governors, saying: "Governing bodies should ensure that the uniform chosen is widely available in high street shops and other retail outlets, and internet suppliers rather than from an expensive sole supplier."

But New Zealand Education Minister Hekia Parata won't be following Wright's example.

She says: "It is up to the Boards of Trustees how they choose to run their schools. They should know their communities and what is realistic to expect from them.

"If parents are unhappy with their school's uniform supplier they need to take it up with their school's Board of Trustees."

Green Party education spokeswoman Catherine Delahunty said that was not good enough. "It's extremely unfair. A lot of people have very, very little money at the moment. Exclusive agreements assume that everyone has the wherewithal to pay the same amount at the same place at the same time."

It's time to ask who is really benefiting from these deals, says Delahunty.

Sometimes it's the parents, sometimes it's the taxpayer picking up the bill for exorbitantly priced uniforms and stationery.

Emma Harford says she's seen parents waiting to get quotes on uniforms, so that they can ask the Onehunga office of Work and Income for assistance. She would have to do the same if it were not for the support of her family.

"I'm faced with a $1500 outlay, when you consider fees and stationery, before the kids even go in the door - it's very stressful."

There is the option of secondhand uniform, though the condition is so bad that it's demoralising for both parents and kids. "But if you've got no choice I guess you lower your standards."

For Harford, it's become a matter of pride that she kits her children out in the right uniform - even if it means wearing what seems an exorbitant cost. "I've told friends having babies to start saving now," she says. "You won't believe how much this kid is going to cost you later."