Fashion
Australians are the world’s biggest consumers of fast fashion, a trend that’s not only harming the planet but that could also prove catastrophic for the domestic fashion industry. By Lucianne Tonti.
Fast fashion’s impact on local designers and retail brands
Something bad is happening to the Australian fashion industry. Local designers and retail brands are struggling, rocked by the drop in Australians’ discretionary spending, while ultra-fast-fashion brands Shein and Temu are reporting unprecedented growth.
“With the cost-of-living pressures and interest rates … when discretionary spending goes down, fashion is top of that list,” says Kelly Atkinson, co-founder of the online store Showroom-X and a campaign called We Wear Australian. “Then fast fashion enters our market and it’s really hard to be competitive on home soil.”
Over the past year, several prominent designers, including Dion Lee, KITX and Arnsdorf, have closed their doors. This month, Mosaic Brands announced plans to shut five of its nine labels, resulting in the loss of more than 200 retail stores and leaving debts to suppliers that run into tens of millions of dollars. In another blow, Myer has revealed it will close 10 of sass & bide’s 14 standalone stores, signalling a deeper crisis within the sector.
A recent report from The Australia Institute underscored Australians’ love of cheap clothing. We are the world’s biggest consumers of cheap fashion, purchasing 56 new items of clothing per person each year at an average cost of just $13 a piece. Americans, by comparison, buy 53 items annually at $24 each, while in the United Kingdom, it’s 33 items at $40 each. Every year Australians send at least 200,000 tonnes of textiles to landfill.
Of course, this is partly due to the fact Australians’ disposable income fell by 8 per cent in the two years to March – the largest drop among OECD countries. Laura Demasi, head of retail research at Roy Morgan, says people tightening their budgets to accommodate higher costs of living are “trading down” in terms of their clothing brands. One beneficiary of this trend is Kmart, whose latest annual sales were up by about 6 per cent.
That is modest compared with the outsized performance of ultra-low-cost retailers such as Shein and Temu. Both platforms sell clothing for exceptionally low prices, with dresses from $3, tops at $2 and pants at $11.
The number of people buying on Shein increased by 34 per cent in the six months to June 2024, according to Demasi. “Every month, about 1.1 million people buy products from Shein in Australia. There is no other retailer in this country that’s grown like that.”
Roy Morgan surveys ask where people shop in an average four weeks. Lately they’ve found Australians who shop at The Iconic, David Jones and Myer also shop at budget stores Temu, Shein and Kmart.
Eighteen months ago, says Demasi, they weren’t the same customers. “As much as our more premium retailers and designers would be loath to admit this, I think that all of them have lost share of wallet to Shein.”
In the 12 months to June, Temu and Shein together generated nearly $3 billion in sales in Australia. Of the two, Shein is more focused on fashion. Owned by Chinese billionaire Chris Xu, the brand has been plagued with scandals, including allegations of child and forced labour as well as unfair working conditions in some of its factories. In addition to a slew of copyright infringement cases, studies have found Shein’s products contain high levels of toxic chemicals, raising serious concerns about both consumer safety and the environmental impact of its mass-produced, low-quality clothing.
In response to growing concerns about fast fashion, other parts of the world have introduced legislation. In France, each piece of fast fashion sold will incur a €10 levy. In September, California passed a bill requiring apparel manufacturers and distributors to participate in an extended producer responsibility program. European Union legislation introduces eco-design requirements, bans the destruction of excess clothing and makes producers responsible for collecting and recycling textiles.
Meanwhile, Australia’s product stewardship scheme, Seamless, remains voluntary. Given the current state of fast-fashion consumption, the scheme’s four cent levy per garment sold is akin to using an umbrella to stay dry in a monsoon.
“There’s no protection for the industry,” says Genevieve Smart, co-founder of womenswear label Ginger & Smart. “Not just Asian brands, but lots of brands are dumping their stuff here and we are wide open to it.”
Jaana Quaintance-James, chief executive of the Australian Fashion Council, says both state and federal governments have historically overlooked the fashion industry. “It’s often dismissed as just champagne and catwalks, rather than recognised as the economic powerhouse we are in terms of employment and export value,” she says. A 2022 report by the AFC revealed that fashion contributes more than $27.2 billion to Australia’s economy, generates more export revenue than the wine and beer industries, and employs more than 489,000 people.
Over time, the government has compounded the challenges facing the Australian fashion industry by successively removing tariffs on imported textiles, clothing and footwear. In the 1990s, these were at 55 per cent; within three decades they had fallen to just 5 per cent, and now, thanks to a series of free-trade agreements, most clothing imports have no tariffs at all.
“Unfortunately, creativity is just not being heroed” says Charlotte Hicks, the designer of Sydney-based label ESSE Studios. “Quality isn’t being heroed. Individuality isn’t being heroed and neither is design integrity.”
Hicks uses fabrics from European mills and manufacturers as much as she can in Australia, something that is becoming harder to do and not just because of the expense. “I need the product to have a certain level of design integrity or trickiness, if you will, and [the local producers] just don’t want to do it,” she says.
This is partly due to the collapse of Australia’s local garment manufacturing industry – only 3 per cent of clothing that’s sold here is made here. As a result, vital skills are being lost. Compounding the issue is the lack of significant investment in technology and machinery, leaving the industry unable to keep pace with manufacturing advancements in other parts of the world.
Quaintance-James, who was appointed to her chief executive role in March, has made government engagement a priority. “We are calling for the type of skills and technology investments that will enable a sector to advance,” she explains. “Technology is really critical because it actually has the potential to bring down the cost of locally produced products.”
Richard Poulson, who co-founded Showroom-X and the We Wear Australian campaign with Kelly Atkinson, says that to survive in this environment, designers have to ensure the margin on their products is healthy. “That means that your supply chain needs to be absolutely tickety-boo,” he says. Asked whether he thinks it’s possible to have that assurance and be manufacturing in Australia, he says: “I don’t.”
So the domestic industry continues to suffer. Ginger & Smart was founded in 2002 but has been owned by Alquemie Group since 2019; Genevieve Smart stayed on as creative director until her departure in July this year. “I was just struggling to find the joy in the business and the industry too, really,” she says. “I needed to step away to reflect on the broader changes necessary for myself and for the industry. It had become too noisy, with too much stuff. We need to focus on consuming less and valuing quality. Profit cannot come at any cost.”
Shortly after Smart’s exit, Mary Lou Ryan announced she would step back from Bassike, the brand she co-founded, and Claire Greaves and Pip Edwards both exited P.E Nation. The extent of the departures reveals what a challenging environment it is to be doing business in. “So many designers that I talk to are just absolutely knackered, totally exhausted,” says Poulson.
In addition to the pressures to compete with cheaper goods, social media and online shopping has also changed the way brands communicate with consumers, presenting another challenge for independent designers. The speed of these platforms and the volume of content required has made it harder for designers to distinguish their work and help the customer discern good quality from bad. It’s especially challenging for designers competing with the marketing budgets of enormous international companies.
“Anyone can spend money to take a good picture,” says Charlotte Hicks. “I’ve got to work so hard to encourage people to buy into the slightly higher price point. I have to tell a story about the fabric and the quality and educate customers. You just kind of have to keep fighting the good fight.”
This article was first published in the print edition of The Saturday Paper on October 19, 2024 as "Fast-fashion victims".
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