Why hire companies are killing the Australian fashion industry
Okay, this is actually really scary
Once upon a time, shopping was an art form. And like chameleons, we could transform one dress into three different outfits to wear to multiple events. However, that came to an abrupt end when Instagram came around and no one wanted to be seen snapped in the same dress. Thus hire stores were born.
For fashion lovers, this was revolutionary. Finally we could afford a Zimmerman dress or an Aje top while still paying rent. But fast forward three years, and we see that boutiques and designers have been hit hard enough to be threatening Australia’s fashion industry.
Nicola Finetti’s dresses have graced the industry for over twenty years, and he believes hire boutiques are killing designers and boutiques alike.
Finetti is passionate about this issue to him “this hiring thing is a nightmare,” and for the charismatic designer this isn’t just business it’s personal.
Hire boutiques like Glam Corner, Her Wardrobe and One Night Stand offer their customers the chance to wear that dream dress for a fraction of the price. While this benefits the customer, over time it has started to cause a dent in local industries.
“I sell a dress for $690 and they can hire it 20 times and they make a profit. Remember it is not a boutique that will eventually buy two in each style and then maybe ten in one size, no they (hire companies) buy one,” said Finetti.
A legitimate stockist can purchase up to $30,000 of wholesale and if hire companies are saturating the market, Finetti won’t be able to reach this price as boutiques won’t be able to sell as much as they use to.
Finetti has been proactive and established a system to combat this issue, by stating in his policy ‘2.1 Sales Material IP Protection’ that:
“Any unauthorized offering of Nicola Finetti garments for commercial hire may deceptively imply an endorsement by Nicola Finetti that does not exist or otherwise infringe the above rights, which will be strictly enforced.”
To read the policy in full click this link: https://nicolafinetti.com/terms/
Finetti goes as far as to send back money if he discovers the customer is working on behalf of a hire company.
“I already have had three hiring boutiques that I turned down the money, one she was very upset and sent me to consumer affairs to say it is not right,” said Finetti.
In regards to this incident, he won because the policy on his website outlines the rules and is perfectly legal.
Over the past three years, Finetti’s sales have increased because he has managed to stop a lot of boutiques from hiring his dresses.
However, it is still hard to track who is a genuine customer and a hire company, because they can still buy through friends under as Finetti puts it “false pretentions”.
Adelaide has been hit the hardest by hire boutiques. Our market is already so small and there really wasn’t room for these stores. Some of our favourite boutiques have had to downsize to accommodate the changing landscape.
Azalia Boutique has noticed a decrease in sales since a tide of their customers began turning to hire boutiques for events.
Azalia’s owner Azadeh Afzalia sites renting as the biggest cause killing her business.
“85% of it is because of renting, it had a direct effect on us,” said Afzalia.
Azalia’s online manager Kylie Miller stresses the hire industry “has had a massive impact on boutiques”.
It is well known in Adelaide some of our best formal wear can be found at Azalia’s, however, Afzalia has had to downsize her operation because girls don’t buy formalwear anymore, they hire.
Usually, Azalia would spend 80% of her buying budget on formal and event wear, but recently they had to lease a warehouse in Brompton of which three quarters was filled with un-purchased formal wear.
“I’ve invested so much money and it is gone,” said Afzalia.
People still come into the boutique looking for formal wear, and Afzalia and Miller have to apologize and tell them this is simply the state of the retail industry.
Both Afzalia and Miller know the only way they will recover is if designers stop selling wholesale to hire boutiques, which they share with a tinge of hope because they can already see the tide shifting.
Like Finetti’s emphasis on hire stores killing local boutiques, Afzalia and Miller highlight how eventually designers won't be able to create.
“If we aren’t ordering from them because their not selling, then the designers aren’t getting enough minimum orders and eventually they are going to go out of business,” said Afzalia.
This system isn’t benefiting the designer and without them, there simply won’t even be any dresses to rent.
“Eventually it will kinda come round and be like, well, designers won't design anymore, it is going to be like a chain reaction,” said Miller.
However, while it is easy to dwell as we watch possibly the demise of Australia’s fashion industry, there is a feather of hope sweeping through.
According to Afzalia and Miller designers who once had accounts with hire boutiques are pulling back because they are noticing their sales and orders are dropping.
If all designers come on board and rally against hire boutiques stocking their clothes, it will greatly reduce the pressure on boutiques and hopefully, they will thrive again.
Of course, like all issues education will be key so perhaps it is time for consumers to think about their buying decisions.
Sure it’s cheaper to rent a nice dress instead of buying a new one, but is it worth the consequences?
I don’t know about you but I don’t want to see Australia’s fashion industry fizzle when it’s just hitting its stride.
Words by Faye Couros