If you think opening a business now is tricky, try starting one in a recession.
Back in 2007 the GFC was in full swing, the Australian dollar was in the toilet and business confidence was pretty gloomy.
But Anthony Pitt’s absolute confidence in his fashion startup, The Academy Brand, has meant he defied the odds and built a business that now has 16 full-time employees, five retail stores, a thriving wholesale operation and turnover in excess of $10 million.
Pitt started The Academy Brand with his own savings, a small overdraft and, most importantly, a solid amount of pre-planning which he says was key to success.
“Whilst it was incredibly tough it really put the focus on the core idea of the business and why it was actually started,” he told The Huffington Post Australia.
“When I look back now on our success it was a testament to the idea and the fact that it was right and the market was ready because if it wasn’t it wouldn’t have mattered if the economic conditions were good or bad it would have failed -- I wouldn’t have survived more than two months, I reckon.”
Working in advertising as a creative for 10 years, Pitt was well versed in building other people’s business brands -- and it was actually while sitting in his office that sparked the idea for The Academy Brand.
“We all got to wear civilian clothes and at the time it was all white T-shirts and Tsubi (now Ksubi) jeans and every creative meeting we had was embarrassing -- we all looked identical,” he said. “I thought there must be a huge market for good quality men’s clothes with a cool brand story that don’t cost a fortune when you need to fill your wardrobe with staples that work for you.”
Starting a business in a recession and a crowded fashion market may seem foolhardy, but Pitt identified a huge gap in high-end fashion retailers and the low-cost chains that were filtering into Australia.
“In tough economic times, guys don’t want to be spending $120 on a T-shirt,” he said. “Obviously there were huge economic challenges at the time, but so much stuff was pre-planned so even though when I went to market it was tough and it was hard but I was really really confident of my product.”
Pitt says he took a risk ordering his first consignment of clothes for $25,000 without really knowing if he could sell them all, but got a helping hand from his manufacturing suppliers in China.
“I found some people believed in the vision and were prepared to help us with payment plans which was absolutely critical,” he said. “So they were helping me to finance the business. That was the biggest help I have had to build this brand.”
Pitt began by working from home -- driving his wife mad with the piles of boxes of stock in their apartment in Bondi -- and managed to get his clothes into a Tuchuzy, a popular boutique in Bondi Beach.
“It was hard to get in but all I needed was a shot and for people to see me in that store to get credibility and see our prices,” he said. “We had a lot of air around our price point because there was nothing else in it except for high-priced stuff.”
And it paid off. David Jones spotted the collection and came calling -- Pitt signed on as a supplier to the chain in a relationship that is still in play today. Several retailers in New Zealand also came on board to stock his products.
In 2010 Pitt established his first retail outlet in Bondi Beach, and four others have since followed. His wholesale business is still a major part and online sales -- an area he says has had organic as opposed to fully accelerated growth -- now accounts for 7 percent of turnover.
For Pitt, taking a risk to open a small business was not an overwhelmingly scary proposition.
“I had to take a lot of risk back then because time was so tough,” he said.
“I had to order a lot more stock than people were buying so the entrepreneurial spirit started back then because I had to be confident enough that the stock would move and that I would get repeats orders because I only started selling to a few stores.
“That was the enormous challenge and I knew it. It was my lucky break -- although I think you make your own luck.”
He’s also dismissive of the argument that it’s a crazy idea to start a business in a field where you aren’t traditionally trained or have even worked in. Pitt says it’s all about your headspace.
“I didn’t see going from advertising to fashion as a risk at all,” he said. “On the surface it’s completely different but the way I have structured the company and built the brand it’s very similar -- our head office is basically like an ad agency.
“This whole mantra has put us ahead of the game because I have approached this not as a “fashion guy” but from a marketing business perspective. I don’t sit here with a sketch pad wanting to design beautiful garments for catwalks -- we make products that are commercially viable and will sell.
“A lot of people are really talented but they fall by the wayside because they don’t have any of that business acumen -- they just want to be a catwalk designer and have their name on a label. The ambition was to build a brand, not a fashion label.”