Small Business: Auckland retailer's plan to crack billion-dollar active wear market - People Like Us

Auckland-based Australian retailer Rachael Challinor talks differences in the New Zealand and Australian retail markets and the billion-dollar opportunity for active wear.

What does your business do?

We're a retail and online business and are essentially a curation of the world's best established and emerging fashion forward active wear brands. Our aim is to push the boundaries between performance active wear and street style, because people wear active wear not just to the gym anymore. We're not a sports store, we're a fashion boutique and opened in August 2017, so it's just been over two years now.

What was the motivation for starting it?

I moved here from Australia for family reasons. My background is in sales and design, and when I moved over I couldn't believe that all of my favourite brands were not available here and the selection of active wear was very limited too. I also realised that if you buy online here you get charged a lot of duties and taxes so I thought there was a real opportunity to not only have a bricks and mortar store but an online offering. Because we're shipping from New Zealand, our customers can buy labels from say America and they are not paying any shipping charges or duties.

How big is your team?

We've got six staff at the moment, two are part time and four are full time.

From December 1, new GST legislation comes into effect - do you expect this to have a significant impact on your business?

I think it is a positive for us. We're established now, and people come to us because they trust us, they know they are going to get the best of what's out there.

How different are the New Zealand and Australian retail markets?

Still there is limited selection here. The biggest difference I've found is people shop less online here at the moment, but that is definitely changing. In terms of online sales, New Zealand is a couple of years behind Australia, driven by a couple of factors, and one of those is the level you have to pay duties at. In the last two years, I've seen that our website is growing with momentum weekly, we have monthly growth of about 20 per cent online.

Is your online business the main focus at the moment?

It's certainly a focus in the next year. We'll always maintain a physical store, and we're looking to increase the footprint of those as well. Our store is based in Orakei Village in Remuera, but it's a matter of working out how many we need versus online to keep the brand presence, but I'd say we have our eye on 2 to 3 in the short term.

Most of my time this year has spent focused on researching and growing our brands stables so that we're bringing in the best of what the world has got. We do this by trawling through social media, attending fashion weeks and buying trips overseas. Other than that, the focus has been tightening up the web and driving sales online. Our aim is to get our sales 50:50 online and retail, we're not there yet but I think we will be in the next 12 months.

What's your focus for the next 12 months?

The active wear market in Australia is valued at $1.5 billion that suggests around $200 million annually in New Zealand, and that's certainly growing.

The global market is predicted to be up to $215b by 2025 so my focus is to make sure we have as much as that market in New Zealand as possible, and the way that we will do that is by having a great curation of the right labels and presenting them nationally via online and supporting it with a retail network. We're also working on our own branded clothing line.

Are you looking at opening a store in Australia, and what plans do you have for further expansion internationally?

We get a lot of online orders from Australia which is interesting given a lot of our labels are Australian, but again, I think it comes down to being able to offer the right curation on one website. A mid-term goal is to open a store in Australia, and brands I deal with in Australia are very keen for me to do that.

What's been the biggest challenge you've faced running People Like Us?

The biggest challenge for starting any business from scratch is thinking about how much money you need to start it up and realistically tripling that. Cash flow is always tight. I always trusted my intuition that there was a niche market in New Zealand, but for what I was doing I was probably a little ahead of the timing of it but it is really starting to come together.

What advice do you give others thinking about starting their own business?

Trust your intuition and make the most of everyone who is around you. Everyone in New Zealand has been very open to offering support with mentoring and advice. Also know that you can't be everything in your business - identify what your weakness are and get help with that. Estimate how much money you need to start up, and double it if not triple it.