Rodd & Gunn is hoping to grow bigger in the US market with the addition of a new styling suite in New York’s Trunk Club showroom, The Mansion on Madison Avenue, following last year’s debut in San Francisco. The Madison Avenue retail space is within the 26,000-sq ft Trunk Club, a men’s online personal styling service selling high-end clothing, which has a handful of brick and mortar styling showrooms throughout the US.
Jason Smith, Trunk Club’s vice president of merchandising says Rodd & Gunn has become one of the Trunk Club’s most popular labels since it launched two years ago.
“The quality of the materials, the overall styling aesthetic of the brand and the fit of the garments is superb. It’s a premium brand with premium styling, while also completely accessible from a price standpoint. “I’d liken it to what Ralph Lauren or even Billy Reid represents here in the US. It embodies this idea of ‘updated traditional’ that performs really well for our members,” Smith says.
Managing director of Rodd & Gunn (Australia and New Zealand), Mike Beagley who has over 34 years retail experience, says he knows where he wants to take the company, in the American market, and “how to get there”.
He is mindful however of the complexity and diversity of the US market, given the size and polarity.
Beagley is an old hand in the retail industry, having led the turnaround of footwear company Hannah & Co Limited, through 1996 to 2006.
The Rodd & Gunn brand is now available across 44 US States, in 221 stores, as well as Canada. Australia – a market it has been in for 20 years -- accounts of 70% of its annual $80 million turnover. Rodd & Gunn started life in New Zealand in 1946.
Rodd & Gunn: Appealing to the rugged, ageless?
Q: Rodd & Gunn has been in the US over the last 2 years. Can you tell us, what the journey has been so far in terms of reaching the American market?
A: To be honest it’s been a long and arduous journey – it’s closer to three years now but feels like ten! We’ve made some good decisions along the way but have also had some luck. When we first entered the US, we weren’t in any major retailers for the first couple of seasons which allowed us to sort issues like logistics, customs and labeling. Over the past 18 months we’ve worked to refine our range, logistics, debt collection, product development and sampling and this has enabled us to build a growing presence in the US, but we definitely have a way to go to be truly happy with our operation.
Q: Do you have a profile of the typical men visiting the Rodd & Gunn store? What do they like about your clothes, and why?
A: Our typical customer isn’t a fashion maven but wants to look good without standing out in a crowd. Quality and fabrics are absolutely paramount to him, as is fit. We are consistent, not fad driven and offer enormous value for money given the quality of the fabrics we use.
Our core demographic is 35 to 55 year-olds but we can be ageless. Our range is so wide you can curate them how you want, from outdoor pursuits to dining at Michelin- starred restaurants.
Q: What challenges have you faced in building your profile in the American retail market, and how have you overcome these?
A: It’s still a work in progress. It’s such a massive market so building a brand profile and brand equity takes time – any traditional or digital marketing is incredibly expensive.
We’ve done some advertising to consumers and those in the retail trade, and have worked hard to build relationships with suppliers by having our people on the ground. We’re also running experiential activities to build an affinity to the Rodd & Gunn lifestyle, such as having Michelin star Kiwi chef Matt Lambert create an instant restaurant in our major customer, The Trunk Club’s headquarters. We’ve got a long way to go but I think we know where we want to be and how to get there which helps.
Q: What forms of advertising/marketing do you use to reach the American market? What has worked, and what has been less successful? Is America homogenous? Or more diverse than we think?
A: America is made of six major regions that are nearly polar opposite to each other. So whilst you need to have a consistent brand message, you also need to tailor it to these regions. We’ve done a mix of inflight magazine advertising, had some success with stories in news media and are working on building our social media network.
This is in addition to creating relationships with key retailers, so we can be in more stores and get in front of the right customers. It’s much more expensive than New Zealand or Australia so we need to be smart how we spend marketing dollars.
Q: You talked about the fact the Americans like New Zealand’s quirky edge. What is it about your product that brings in customers, and what have you had to do differently to reach customers in America?
A: Firstly, New Zealand rates highly with anyone you talk to - whether they’ve been here, want to come, or don’t even know where on the map NZ is. We play on our New Zealand heritage and brand every communication Rodd & Gunn New Zealand. We use New Zealand to get cut through in a very competitive marketplace; we put the typical Kiwi personality into all activity we do so we’re more fun and less structured than our competitors.
When we entered the American market we started out designing a completely different US collection but it nearly killed us so we now just sell what we develop for our home markets here and in Australia. Our range is so wide that each US region can curate its own look, meaning it works across the regional differences. Interestingly, we find every season that the best sellers in New Zealand are the best sellers in Australia and the US.
Rodd & Gunn managing director Mike Beagley: US is probably his last throw of the dice, he says.
Q: Australia now accounts for about 70% of your $80 million annual turnover. Where will America figure in this pie? What other countries in the world are you selling to, and planning to venture into? Where are the Rodd & Gunn clothes manufactured?
A: Currently the US business is only 6.8% of sales but our forecast for the 2016 financial year is for it to be over 20% of our total volume. We looked at the Middle East and Asia but have decided to devote the next five years to making the US an amazing success and then we can look beyond that. Once we are truly successful in the US, I believe we can be a global brand and work anywhere in the world. But such is the toughness and magnitude of the US market that we need to focus 100% on it.
We buy most of our fabrics from the best Italian fabric mills in the world and manufacture in China, Vietnam, Turkey, Mauritius and Peru. But where we make products is less important than how we design every product from the ground up.
Q: How often have you had to travel to America since the company expanded there?
A: I am in the US generally every other month. I do over a million kilometers of travel each year, predominantly to Australia, Italy and the US.
Q: NZ businessmen like the lifestyle here and find it difficult to relocate. Do you think it is viable to run a business remotely? How important is being on the ground for Rodd & Gunn?
A: One of my great mentors Tur Borren, the former CEO of Hellaby Holdings, once said to me that it is very difficult if not impossible to run the bigger market from the smaller market. Whilst I live in Auckland I do spend a great deal of time in our Australian office due to the country’s importance to us and while technology is good, it helps to be on the ground. As the US business grows I’m thinking I may end up living there – as much as I’d love to stay.
Q: What are some of your observations about NZ companies who are operating in America and if they are succeeding, why?
A: To be honest I’m so busy I don’t get a chance to look outside of my own woodpile enough. But I know the apparel sector is tough for any brand from anywhere in the world, let alone doing it from NZ. I admire what Icebreaker has achieved. The space for NZ companies is definitely in the tech field, where there are fewer barriers to new ideas and an abundance of capital via venture capital, angel funds, etc.
Q: Is your success (like Xero’s and Orion’s) contingent upon Rodd & Gunn succeeding in the American market?
A: How you gauge success is a funny thing. We’ve been incredibly successful in Australia and built a very strong brand there but it has taken us 20 years. Succeeding in the US is probably my last throw of the dice and hopefully I have another 20 years to make it truly successful. I want to be successful in America because it’s tough, hard, aggressive and unforgiving. It’s not about ego, or making a squillion bucks (although that would be nice). To me it’s about building a legacy and being proud of what we have achieved on the greatest retail stage on earth.