How Australian fashion fell to pieces

In the 90s and 00s Alannah Hill, Alice McCall and Sass & Bide became household names. Now Australians buy more clothes than ever but few are made or even designed locally. Where did it come undone?

A shock of burnt-orange shaggy fleece trims the collar of a red and gold brocade coat by Lisa Ho. The fabric is so ornate it's hard to believe the designer started her label at a stall in Sydney's Paddington markets. Tiny glass beads gleam on the floral silk Alannah Hill dress hanging beside it. Hill began making clothes while working as a retail assistant on Chapel Street in Melbourne. On the dress's care label, above the words "Gosh I Miss You Frock", it says "Made in Australia".

Next on the rack is a cream Sass & Bide jacket, its shoulders padded with layers of scale-like sequins. Its designers, Sarah-Jane Clarke and Heidi Middleton, honed their talents for embellishment during a post-university stint in London, selling hand-customised jeans on Portobello Road. On the rack there is also a Willow dress in lilac crepe, a white lace dress by Lover (which began at Bondi markets), and frilly cocktail dresses by Alice McCall.

Fifteen years ago this could have been the second floor of David Jones’ flagship Sydney department store. But it's actually 23km south-west of the stretch of luxury stores on Castlereagh Street, in a less prestigious postcode. The headquarters of the online retailer The Turn, in Punchbowl, is a treasure trove and time capsule. It archives the period before each of these darlings of 90s and 00s Australian style either lost or forfeited control of their businesses.

Over the last three decades a combination of local and global forces have twice reshaped the Australian fashion industry, creating pressures that make it harder for independent designers to thrive.

Manufacturing has moved offshore, raw materials are increasingly expensive, anything from anywhere can be ordered with a single click and, if you did head out to shop in Sydney, you’d see the same brands as in Singapore, Salzburg or Seattle. To cut through, designers have to invest in social media and digital marketing. In 2023 money – not talent – rises.

When Alannah Hill launched her namesake label more than 20 years ago, she says it was an "exhilarating, spectacular, dramatic, creative, wild, daring [and] theatrical time". In other words, things were different.

Her summer 2000 collection was featured in the windows of Selfridges and Browns in London, and Henri Bendel on Fifth Avenue in New York. "I travelled first class to NYC," she says. "I could not believe it – I still can't quite believe it."

In 1993, when Akira Isogawa started his brand, "apart from newspaper articles" to get the word out, he says: "We had to actually physically send invitations, actual tangible invitations or faxes to inform the media." The models wore red socks because he could not afford shoes.

At its biggest, Akira had between 50 and 100 retail partners in Australia and around the world. "So it was rather big business," he says. "But I feel that era has ended."

In the years before Isogawa and Hill launched their labels, the first of several seismic shifts that would decimate Australia's garment industry was under way. In 1990 tariffs on imported textiles, clothing and footwear, designed to protect local manufacturers from cheaper alternatives, sat at 55%. They have been falling steadily ever since.

Today most official clothing tariffs sit at 5% but, thanks to a network of free trade agreements, including the China-Australia agreement which came into place in 2015, for the overwhelming majority of clothing imports there are no tariffs at all.

This was initially a boon for Australian designers manufacturing overseas, and prompted many to move to offshore operations, but it caused factories from the once-thriving garment districts in Melbourne and Sydney to close. Now as little as 3% of clothing bought in Australia is made in Australia. The lack of local manufacturing presents both a creative and environmental challenge to young designers.

The Sydney designer Jordan Gogos – widely considered one of the most promising talents in the country – says factories are "literally at capacity" or demand minimum orders in the thousands. This volume doesn't suit the designs he creates under the name Iordanes Spyridon Gogos.

He says such high order minimums don't make sense from an environmental waste perspective or a business perspective. "There's no demand to sell a thousand pieces off the bat."

The contrast to Hill's experience decades before couldn't be starker. "With local production, I could have a pattern and a sample the very next day," she says. "I could have brand-new designs in store within two weeks."

When she started producing offshore, the turnaround time stretched to anywhere from four to six months. "I’d go mad waiting," she says. "There was always a lot of compromise with offshore. You’d often have to compromise on fabric, colours and trims – which really upset me."

Designers deciding whether to manufacture in China or Australia now are faced with "a real conundrum", Hill says. A Chinese factory can make a designer's ideas come to life – at a high price with a high order minimum. But manufacturing locally is also expensive and difficult, and the expertise to finish garments beautifully is increasingly hard to find. Hill says the barriers to entry for independent designers are now so high, "it is impossible to grow without at least a million dollars. At least."

In the 2010s the global trade winds that first shuttered factories started to buffet brands. Global luxury and fast fashion retail rapidly expanded into the Asia Pacific. Before this, to access international fashion Australians had to travel. Between 2010 and 2014 the global behemoths H&M, Uniqlo and Zara opened bricks-and-mortar retail in Australia, alongside luxury brands including Burberry, Prada, Gucci and Christian Dior. Now Australia's fast fashion market is worth $2.3bn and the luxury market is worth $5.3bn. Both have approximately doubled in value in the last 10 years.

These were the years after the global financial crisis – from which Australia emerged relatively unscathed – but it was a tumultuous period for the country's most celebrated designers. The Australian dollar was at a record high, eliminating the price advantage local designers had previously enjoyed over their international counterparts. Despite their respective meteoric rises, over the same three-year period the creative directors behind Willow, Sass & Bide, Alannah Hill and Lisa Ho all exited the brands they had founded.

Another casualty of the era was Karen Rieschieck's Melbourne boutique Alice Euphemia, which shut its physical store in 2014 after 18 years of trading. More gallery than retail space, Rieschieck looked for products and designers with a sense of drama or magic. She selected clothes based on an emotional connection rather than using sales data.

"I didn't think twice about displaying a saddle made of feathers and precious stones which was a collaboration between Julia deVille and Vittoria Di Stefano, or a dress in the shape of a giant Iced VoVo by Romance Was Born," she says.

During this decade, another force that would dramatically reshape the industry was building momentum: the internet. In 2010 online shopping accounted for just 5% of global sales; in 2023 this figure is expected to be 22%. In Australia online shopping grew about 20% annually between 2017 and 2022, according to the analyst Ibis World.

Aided by social media, the ubiquity of smartphones and the way advertisers have harnessed user data to precisely match a mesh bralette or an ankle-length coat with a willing customer, our increasingly online lives have fundamentally changed the way we shop. And, for better or worse, that has altered the relationship between retailers and designers, and caused department stores to relinquish their once-celebrated responsibility for curating, discovering and nurturing new talent (on the rare occasions customers brave real-world department stores at all).

Rosanna Iacono, managing partner of the consultancy firm The Growth Activists, says the "art, curation and taste" that used to set stores apart has been replaced by buying strategies driven by datasets fed into algorithms.

"We don't see the same retail theatre and creativity that we used to," she says. "Which means the most beautiful independent brands [might not] get surfaced."

Wholesaling to department stores and multi-brand boutiques was long considered an avenue to aid designers’ cash flow and manufacturing, particularly in the early stages of a business. Large orders from a department store could help a small designer reach the minimum volumes required by some factories and provide the money needed for expansion.

An order from David Jones, Myer or the online department store The Iconic once resulted in greater visibility too, with designers appearing in catalogues and advertisements. But being picked up by a bigger business with an established audience and broad reach is no longer a silver bullet. Now it's commonplace for retailers to ask designers to financially contribute to marketing and accept returns of stock that doesn't sell.

Generally larger, more commercial brands can afford to pay for more eyes, which leads to more customer data, which is fed into design decisions. This cycle feeds on itself, creating a kind of design-by-algorithm that means every store, brand and collection has started to look the same.

"I was very fortunate because print media picked my designs and used it for editorials," Isogawa says. This led to retailers giving him more exposure. "I had my collections in the windows at Barneys in New York and Browns in London without any cost," he says. "They would never imagine charging such a new talent."

A document from The Iconic, titled "The Iconic Media Kit – Sports. Brand Partnerships", outlines the site's traffic and audience, as well as the fees a designer can pay to "maximise their presence" across the website, mobile app, editorial platform, email campaigns and social media.

Having a "tile" dedicated to your brand on the site homepage for one week costs between $2,500 and $6,000. A week of being featured on the mobile app costs between $6,500 and $10,000. Email marketing ranges from $5,000 and $15,500. Social media spending starts at $1,000 and the upper range is limitless.

"These opt-in partnership opportunities complement the editorial content of our marketing channels," says Gayle Burchell, The Iconic's chief commercial and sustainability officer. "Our business model has been designed to enable brands and designers flexible and scalable ways to connect with our collective [2.2 million active] customers."

The Iconic is not alone in operating this way and, while standard online advertising rates fluctuate, its prices are competitive with advertising directly on a platform such as Instagram.

Iacono says e-commerce platforms and department stores with the largest audiences are "essentially being a Google or a Facebook" and selling access to their customers.

"Commercialising a business and actually selling clothes is not a creativity game," Gogos says. "It's a money game."

Even though the internet presents designers with challenges – Rieschieck says the complex pattern making, fabric manipulation, high-quality materials and adornment that she took pride in featuring "are difficult to appreciate online" – it is also full of opportunities.

The rolling images and videos on visual platforms including Instagram and TikTok allow designers to find and build an audience, then maintain a direct relationship with their customers. Iaconou says these skills are essential if independent designers want to survive. They "have to find their own channels and their own ways of breaking through". Engaging and selling directly to consumers "is where your margin is going to be biggest".

In 2018 Middleton, one of the founders of Sass & Bide, launched ARTCLUB. The label is focused on "the creative process rather than building a big commercial enterprise", she says. Whereas Sass & Bide primarily manufactured out of China, ARTCLUB clothes are made in Australia from remnant fabric. "Instead of offering new styles each season, I continue to offer popular styles, adjusting or adapting the patterns or offering them in new colours and fabrics," she says.

While Middleton does wholesale, direct-to-consumer e-commerce is her main focus. "There is a significantly higher cost involved in producing locally," she says, but thanks to that business structure, "we enjoy higher profits margins".

Since Middleton is one of the most well-respected and well-loved designers in Australia, she had a significant advantage over someone starting fresh: an audience. And, while the opportunities for young designers to build communities are real, social platforms and their ever-changing algorithms require particular talents, creativity and time. These skills can go hand in hand with designing clothes but it helps to have money to spend on a social media manager and to pour into digital advertising.

The pivot to digital isn't the only shift Middleton reckoned with when starting over. The rising cost of raw materials and the climate crisis have changed the way she creates clothes. She says the "intricate detailing we incorporated into our designs years ago" – like that cream jacket hanging in The Turn – would "simply not be possible now – for environmental and financial reasons".

Kit Willow, who launched KITX in 2015, 12 years after she founded Willow, says it is "a lot harder to make strong margins in fashion, compared to 20 years ago".

"The quality and weight of silk is not where it was … and the resistance to make with superb finishes and quality has certainly increased." It simply costs much more to get clothing made, she says.

For garment workers in China, where 41% of the world's textiles are produced, this is a good thing, Iacono says. "There was a period where labour costs were going up 20% per year in China, because their government was really levelling up and making sure that workers were being paid the right wage."

"China became very, very sophisticated in the last … 15 years."

There are other hubs for designers looking to manufacture offshore but they can come with trade-offs in cost, quality, ethics, transparency and ease of doing business. For a small brand with small orders, it can be hard to grapple with just one of these things.

Even the largest and most established players are suffering. Australia's prestige department store, David Jones, was bought by a private equity fund for just $100m at the end of 2022, a steep plummet from its 2014 purchase price of $2.1bn.

Despite the difficulties, Australian fashion retains some bright spots. After entering voluntary administration in 2020 and being rescued by a private equity firm, the swimwear brand Seafolly is up for sale again and this time it is flaunting far rosier figures. Emerging swimwear brands including Peony and Form and Fold have also picked up prestigious international retailers. It should not be surprising there is an international audience coming to Australia for garments - like beachwear - that feel distinctly Australian. Resort wear by Zimmermann and Camilla, the body confident apparel of Christopher Esber and Dion Lee, and breathable staples from Bassike continue to do well with international stockists.

Other local designers, emerging and established, have taken a survival-of-the-smallest approach and traded ambitions of scale for slowness and sustainability.

The south-west Sydney headquarters of Uturn Recycled Fashion sit on 10,000 sq m of land. The space is a necessity: each week workers sort through 150 to 200 tonnes of discarded clothing collected from drop-off bins, charity stores and direct donations. In the two decades Alex Dimou has been running Uturn, he has noticed the quantity of garments dramatically increase while the quality has declined.

The wearable clothing the company collects is mostly sold at UTurn's five Sydney vintage stores but the really special pieces are saved for The Turn.

At The Turn, Dimou says: "The Australian designers are just flying off the shelf."