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On Cue: CEO David Kesby, left, and co-founder Rod Levis Jim Rice
When fashion label Cue took to social media this year to ask customers their thoughts about its Australia-made message and whether manufacturing some items in Asia to reduce retail prices was something they wanted, the feedback was unanimous.
“Please keep it in Australia! Don’t ruin your label. Don’t sell yourself [sic] out,” one Cue Facebook fan wrote. “Half of your appeal is the sharp designer edge – the other half is in the quality – change your model and you will be dealing with a different target audience,” another fan said. Another supporter warned of “cheapening the brand” by heading offshore, adding that most Cue customers don’t mind paying a premium for high-quality, Australian-made garments.
The feedback confirmed what Rod Levis, who co-founded the company in 1968 with his wife Lynette, had always believed about his company. Cue sits in a unique position between high street retail and designer fashion and customers recognise that.
“We are the bridge between mainstream and designer fashion. Nobody else really sits there. That’s the key,” Levis says. “Our customers are very proud of the fact that we are designed and made in Australia, as are we.”
Levis says Cue’s management team continues to run the company like it still has only “two small shops in the Stand Arcade”, despite having 150 stores and counting (85 stand-alone stores and 65 Myer concession outlets).
The Sydney company has about 1600 employees, with 100 in its head office. Cue, which has had just four head designers in its 44-year history, has close relationships with its suppliers, many of which it has worked with for decades.
“Underpinning our success is the fact that we are very tightly run . . . very lean,” Levis says. “We have high profitability . . . and very little unsold stock or wasted fabric.
“It is also no accident that before David [Kesby] was [appointed] CEO he was the chief financial officer. Next to design, his second most important goal is the bottom line.”
By keeping most manufacturing in Australia (a small proportion of Cue products, such as some accessories and knitwear are produced overseas because they can’t be made locally) Cue, led by design director and head of brand Debi Rolle, is able to control the brand’s “look” as well as adapting new styles to test in stores.
“She has grown up with us and lives and breathes Cue,” Kesby says. “We are very consistent with our approach. It is a very creative place, everything is done manually and it is very design driven.
“We have between 30 and 35 new styles delivered to our stores every week. We can afford to do that because of the small production runs.”
The retailer’s relationship with department store Myer, which began in the early 1970s, has also contributed to its success, Kesby says.
The first brand to operate a concession model through the department store, it continues to be the only brand to have an exclusive arrangement with the retailer in all of its stores.
“They would buy the clothing upfront, so I didn’t have to count the capitalisation personally – it was an excellent model. Myer has been very good to me. You hear bad stories but we have been very fortunate. They let us have a lot of freedom and have been very good to us.”
As its customers pointed out, moving manufacturing offshore would have a disastrous impact on Cue, according to Kesby.
The flexibility created by manufacturing locally means that production runs range from about 150 for edgy designer items to 600 for dresses and 2000 for basic black pants.
“If we were offshore we wouldn’t have the flexibility to repeat and change designs,” Kesby says.
“We continuing to test everything we do. We have a model where if a design doesn’t work, it doesn’t matter. We can move on to something different. Our customers love that.”