One month on from the Christchurch earthquake, Fashion Industry New Zealand (FINZ) takes stock of clothing businesses in the South Island's main centre, as well as the flow-on effect for other ragtraders. VICKI MATIAS reports on the challenges and outlook for fashion in Canterbury ...

Concentrated in the Christchurch CBD, now referred to as the red zone, fashion retailers were among those hardest hit by the earthquake. With the area deemed unsafe and still cordoned off, most clothing retailers, wholesalers and manufacturers in the city centre do not yet have access to their premises.

Landmark department store, BALLANTYNES, will be closed for six months or more. All purchase orders for autumn/winter 2011 have been cancelled, with the exception of specific garments in this season’s catalogue and stock already destined for its stores in Christchurch International Airport and Timaru.

While the company is confident of re-opening its City Mall flagship store, business operations have been relocated in the interim. The administrative team is now working from offices near the warehouse, enabling them to process online sales and continue servicing customers.

Several heritage buildings have been reduced to rubble. Among them is BARBARA LEE’s design studio and boutique, Panache, which has occupied a prominent position on Tuam Street since 1978. Fortunately, no one was harmed, as the building was unoccupied at the time, having undergone restrengthening soon after the initial September earthquake. The retail side of the business had already been relocated to a temporary site.

Neighbouring boutiques, WORKSHOP and WITCHERY, have been bulldozed. And, retail stores on High St, including TRELISE COOPER and WORLD, have also been severely damaged.

It’s still uncertain when NG SPACE will reopen. The fully-renovated historic building on Madras Street, owned and operated by designer Sharon Ng, housed several businesses, including her workroom, gallery, café and boutique, which carries the NG label and select European brands.

Ng was able to retrieve undamaged stock and computers, and has since found a private residence to trade from. Structural work is already planned for the building, but most of her machinery remains inside, leaving her unable to manufacture in-house.

The UNTOUCHED WORLD store in the Arts Centre on Montreal Street has also sustained serious damage. Its two floors have been locked-down and a full assessment is yet to be carried out. So far, nothing has been recovered, aside from personal items belonging to staff.

Previously the University of Canterbury, the cluster of Gothic Revival buildings that form the Arts Centre have been ‘red-stickered’ and are unlikely to reopen for another 12 months. Nevertheless, Peri Drysdale, founder of Christchurch-based SNOWY PEAK, the parent company of Untouched World, anticipates that restoration of the precinct will be a priority and provide a much-needed creative hub for the city going forward.

Snowy Peak’s head office on Roydvale Avenue in Burnside, west of the CBD, remains intact. Production continued seamlessly after the earthquake, running straight through the night on February 22. Skeleton staff returned to work the next morning and all employees were back by the following week.

The company’s headquarters also house the flagship Untouched World store and its own organic Native Garden Café. Drysdale reports that the eatery was packed in the days following the earthquake, with local residents seeking food, beverages and the use of amenities.

Since then, it has become a popular meeting place for neighbouring communities, bringing additional business to both the café and store at a time when demand for high-end clothing is otherwise subdued in the region.

The SAKAGUCHI store in Merivale, north of the CBD, was completely destroyed. Designer, Takaaki Sakaguchi, has decided not to re-establish the Christchurch boutique and will concentrate on his wholesale business instead, namely an extensive list of stockists in New Zealand and Australia, who have all been extremely supportive.

The company delivered indent orders for autumn/winter 2011 before the earthquake and will continue to operate form its offices and workroom on St Asaph Street, which sustained moderate damage.

Sakaguchi is currently weighing-up the option of outsourcing production to manufacturers across the country and plans to open a flagship store across the Tasman later this year.

Fashion Diploma students at the CHRISTCHURCH POLYTECHNIC INSTITUTE OF TECHNOLOGY (CPIT) started classes the day before the earthquake. And, Fashion Certificate students were scheduled to begin the following week.

The city campus on Madras Street is still closed, due to cordon restrictions. Buildings have undergone two structural assessments and CPIT is currently in discussions with Civil Defence regarding a re-occupancy plan. The Sullivan Ave campus was reopened on March 14.

THE IMMEDIATE CHALLENGES

Clothing retailers in Christchurch have been affected to differing degrees. They are not only faced with financial and contractual business obligations, such as cashflow, bank loans, leases, insurance and employees, but also the problem of how to clear stock-on-hand and whether to receive existing purchase orders or cancel them.

Merchants with multiple stores have transferred stock to other locations and those engaged in e-commerce are trying to push through more sales online.

Retailers like Ng are resolved to continue trading and don’t want to disappoint their loyal clientele. She has only cancelled one purchase order for autumn/winter 2011, which stood with an Auckland-based designer who was forthcoming with the offer to decline delivery.

Insurance claims will be processed once the cordon is dropped and retailers have an opportunity to asses the full damage. Ng is fortunate that her building didn’t collapse, as it wasn’t covered for full replacement. And, Sakaguchi is looking at a claim of around NZ$50,000 for the contents of his Merivale store, as well as a further NZ$20,000 in damages to his offices.

For many of the smaller fashion businesses that have been hit hard, there is little option but to cease trading, with restoration reserved for those with the necessary resources.

Companies in Canterbury are also feeling the pinch from a sharp decline in tourism across the region. Visitors to the South Island are bypassing Christchurch and heading to other destinations, such as Queenstown.

Shortly after the earthquake, the Government announced a Support Subsidy Package for employers committed to retaining staff and rebuilding local business; offering six weeks pay in instalments of up to NZ$500 for inoperative workers. A similar package, designed to assist people who have lost their jobs, has also been introduced.

THE BIGGER PICTURE

As one of New Zealand’s three major cities, Christchurch represents 10-40 percent of domestic sales for clothing wholesalers. Most of them will carry the loss for autumn/winter 2011. But, if trade in Canterbury turns sluggish over upcoming seasons, the impact may be felt throughout the entire supply-chain.

Auckland-based streetwear wholesaler, STEM DISTRIBUTION, supplies international brands to 12 Christchurch retailers (including Bloom, Stencil and Cheapskates), which account for 15 percent of its domestic business and around half-a-million in annual sales.

The company has assisted its Christchurch stockists by way of extended payment terms and the option to cancel purchase orders. Much of the excess stock has been moved to other retailers around the country and the remainder will be cleared through an end-of-year sale.

Cancelled purchase orders have had some bearing on almost all of New Zealand’s clothing wholesalers. BALLANTYNES, in particular, is a substantial account for clothing suppliers, including Christchurch-based MISTER MENSWEAR, which has offices on Cashel Street.

The company outsources production to manufacturers in Hamilton, Nelson and Christchurch; the latter of which is yet to re-open and largely responsible for construction of the brand’s signature pieces. It is unknown whether Mister’s garments for autumn/winter 2011 have already been made or how long it will take to complete the job, but co-founder Ra Thomson has no intention of cancelling the order at this stage.

Womenswear manufacturer, COTURA FASHIONS, which produces the Cotura, Hendrix and Zardi brands, sustained damage to its Riccarton premises in the September earthquake. But, the company had already relocated to a nearby site in the western suburb of Sockburn, which was untouched. With only five percent of production destined for Christchurch retailers and no cancellations in the pipeline, it’s almost ‘business as usual’.

GOING FORWARD

The earthquake that struck Christchurch on February 22 had a devastating effect. And, the loss of lives has weighed more heavily on the minds of local residents than the long-term outlook for business or plans to rebuild the city.

When asked what the future holds, many ragtraders in the region said the stark realities of the earthquake are still too much to take in right now and their focus is on immediate concerns.

Jenny Wilby, general manager at BARBARA LEE, says they are taking things one day at a time and none of them are ready to return to the city just yet.

Those who have contemplated Christchurch’s reconstruction expressed the desire to see heritage buildings restored, as they promote the history and character of the city.

Thomson stressed concerns about the possibility of landlords dramatically raising rents and Christchurch becoming one big shopping mall. He believes consideration should be given to emerging retailers and the regeneration of smaller businesses. Nevertheless, he remains optimistic about the future and intends to open a flagship store when the city is rebuilt.

Ng would like to see designers working together to create a new fashion precinct and suggested temporary rental packages to support struggling retailers. For her, what’s needed is robust discussion and clear procedures around all future activity. She also plans to reduce the floor-space of her boutique and engage with new likeminded tenants, which may include other designers.

All of these companies in Christchurch were appreciative of the well wishes and support they have received from business colleagues, local residents and people throughout New Zealand.

The big decisions, regarding the long-term outlook for fashion-related businesses in Christchurch, will be the most challenging. But, Cantabrians form a tight-knit community and this, coupled with ongoing Government assistance, suggests that the region’s apparel industry will be revitalised and emerge stronger.