A Growing Trend - the Cotton On Story
From a local market to a multinational company, Geelong-based global retail giant Cotton On has become one of Australia’s most successful brands, writes MIRANDA LUBY
It all started with acid wash denim. It’s an unusual way to begin the tale of one of Australia’s biggest business success stories but for the Geelong-based global retail giant Cotton On, from humble beginnings have come great things.
It was at Geelong’s Beckley Market that company founder Nigel Austin sold his first item of clothing — a quintessentially ’80s acid wash denim jacket — out of the boot of his car.
In the first week he only made $30 — hardly enough for food and petrol for the university student. Undeterred, he went back to his supplier and father, the late clothing wholesaler Grant Austin, and bargained for a better deal.
The next week he made $200.
In 1991, Nigel opened his first Cotton On shop in Geelong and now, 24 years later, the retail genius has taken his fast-fashion value brand from Geelong to the rest of the world.
The 44-year-old father of five, along with more than 19,000 employees, now sells clothing, underwear, sleepwear, shoes, stationery and homewares from more than 1300 stores across eight brands in 19 countries.
Out of the company’s impressive North Geelong headquarters comes Cotton On, Cotton On Kids, Cotton on Body, Supre, Typo, Factorie, Rubi and T-bar.
The Cotton On Group, owned by Nigel and his cousin Ashley Hardwick, is usually quite private about the business’s success, preferring to keep exact figures and financial details quiet. But recently the pair, along with chief executive officer Peter Johnson, has spoken out about the global retailer’s incredible success.
The Cotton On Group, it has been revealed, is now bigger than Solomon Lew’s Premier Investments, which owns Just Jeans, Dotti, Portmans and Jay Jays, Country Road, Witchery, and Mimco, and is one of only a handful of Australian retailers that has successfully ventured overseas. For Peter, who joined the Cotton On Group in 2004 after working for Jeans West, Sussan and Country Road, being able to celebrate the company’s success publicly has a hugely positive influence.
“We often think there’s far too much negativity in the press surrounding business, especially in Geelong, and if you’re a young adult moving into a professional career and all you hear is doom and gloom you’re getting the wrong message,” he explains.
“We want to inspire our kids to challenge themselves and talking about the positive side of business can help do that. We have so many talented Geelong-bred people and we want to attract them with the story of our success.”
But the company’s good news doesn’t stop there.
Cotton On Group has revealed plans to add 227 jobs in Australia and overseas this year and aims to maintain its sales growth record of 20 per cent a year.
Cotton On Group’s sales are forecast to rise 22.5 per cent in 2015 to $1.51 billion and, in 2016, the company plans to open more than 100 stores as well as expand e-commerce with new online sites and improved digital content.
Over the next three years, the group plans to open 570 stores across the globe, taking the total to almost 1900.
But despite the Cotton On Group’s enormous global growth, Peter says there are no plans to leave the company’s roots behind.
“We are really proud of our Geelong heritage. It’s where we started and where we continue to drive the global business from,” he says. “Geelong is a city that’s been through transitions in economy and employment base and it’s always dealt with that change and been so resilient.
“We have so many great entrepreneurial and creative people in the region, plus a really lively business and cafeÌ culture, and these are all things that the Cotton On brand reflects and attracts.
“As a company, we are really aligned with Geelong. It keeps us grounded and genuine.”
So what can be attributed to the Cotton On Group’s phenomenal success?
The company’s smooth operations are cited as some of the best in the business.
It has a direct sourcing model and fast replenishment system for its products that rival those of other global fast-fashion chains such as H&M, Topshop and Zara.
A team of more than 60 designers and trend forecasters in North Geelong and at four hubs overseas design the company’s products, which are manufactured by 170 suppliers at 330 factories — mainly in China and Bangladesh — and are sent two to eight weeks later to seven distribution centres in Melbourne, Brisbane, South Africa, China, Singapore, California and New Zealand.
While experts say this system can be attributed to the company’s growth, Peter says there’s no secret formula for its success.
“There’s no one thing that makes us successful but what is true is we have maintained the vision of the business from day one, which is to give our customers up-to-date and on-trend products at a good price,” Peter says.
“We also think that the Aussie spirit on which the company is based is something that resonated with our customers here in Australia and overseas.
“From the beginning we’ve done business in a relaxed and fun way and there’s a sense of adventure and willingness to give anything a go, which Geelong also reflects as a community.”
But the Cotton On Group is about more than just its brands.
The charity arm of the business, the Cotton On Foundation, is also incredibly successful. In the eight years since it was launched it has raised more than $35 million to build schools, wells and other infrastructure and support to coffee farmers in communities in southern Uganda.
“We had our sights set high from the start but we never thought we’d get to a level like this,” says Tim Diamond, founder and general manager of the Cotton On Foundation. “It’s incredible. We’re really making a difference.”
The foundation, which was started by the Torquay father-of-three after he impressed Nigel Austin with his business nous and charitable nature, raises money through events such as Run Geelong and through the sale of items such as cloth bags, jewellery, bottled water, candles, mints and coffee. But rather than pass the money raised on to a charity, the Cotton On Foundation, whose finances are run separately from the Cotton On Group, has a registered non-government organisation with staff on the ground in Uganda.
“The amazing thing about the foundation is that we have a direct impact,” says Tim, who travels to Uganda four times a year.
“We actually use every cent of the money for the charity and we can show you where it’s going because we are there on the ground.”
Support for the foundation comes from a number of sources.
Unpaid ambassadors such as Joel Selwood, Sally Fitzgibbons and Hamish and Andy help spread awareness while staff take trips to Uganda to help build schools and wells.
“People inside and out of the company really believe in what we’re doing,” Tim says.
And the foundation also has a huge impact back home with Run Geelong raising money for Geelong Hospital and the Unite Geelong campaign, which works to reduce local youth homelessness.
Another thing that’s clear when talking about the Cotton On business is the company’s commitment to its staff.
The Geelong headquarters contains two gyms and staff have access to eight full-time personal trainers that provide one-on-one sessions.
There are office osteopaths, naturopathy and massage services as well as company-based sporting events and competitions.
The headquarters even has a health food- only cafe where cooking classes are offered. And, keeping the company’s future firmly in sight, Cotton On in conjunction with Deakin University has established a $30 million education and training platform aimed at improving retail and leadership skills for their staff across the globe.
“Our people are critical to our business and it’s really important to make sure they’re developed, enhanced and evolved,” Peter explains.
Despite its global reach and huge growth, Cotton On remains very much a family business. Many of those now running parts of Nigel Austin’s global empire are cousins and old school friends and many strategic business decisions are made at family and social gatherings.
For now, the group has no plans to sell the company that started 24 years ago selling acid wash denim from the boot of the car. “We’re very happy with the way things are going,” Peter says.