Star spangled horizons — Exporter Magazine

By Glenn Baker.

Most Kiwi men will be familiar with the classic Rodd & Gunn menswear brand – with its distinctive English Pointer gun dog trademark – and warm, inviting masculine-style store environments steeped in New Zealand’s outdoor heritage. CEO Mike Beagley, explains it’s a long-standing ‘lifestyle’ brand that appeals to successful and discerning men – “those who’ve reached a point in their life where success is measured” – predominantly aged 35-plus, but it is increasingly attracting younger male customers as well.

However, the heritage of Rodd & Gunn is a little less well known – the fact that it began life in New Zealand purely as a shirting brand in 1946. Branded retail stores didn’t come along until 1987 – initially under the Action Downunder banner, then Outdoor Heritage, and finally as Rodd & Gunn branded stores from 2003. 

Today there are 23 stores throughout New Zealand, including eight in Auckland, and another 62 in Australia (taking into account the brand’s exclusive presence in 31 Myer stores). In the past ten years the overall business has quadrupled in size.

Beagley, whose involvement with the privately-owned company dates back to 2000, has an 80 percent shareholding (former Myer chairman Howard McDonald owns the rest). He explains that despite the economic downturn across the Tasman, sales figures there are still out-performing the New Zealand stores. That’s because the cities of Sydney, and to a lesser extent Melbourne, are still in the driver’s seat of the Australian economy. That’s fortunate because Australia, where the brand has been established for more than 20 years, now represents 70 percent of Rodd & Gunn’s business. 

Beagley says the brand resonates particularly well in ‘big-city’ Australia, where he believes an English-like, private-school based, class structure still exists within the culture. As a consequence, private school catchment areas are one of the deciding factors for store location.

He says there are fundamental differences between the two countries, driven largely by their size. “In New Zealand you have to be more egalitarian and cater to a wider market. Whereas in Australia you have to cater for a more defined market.”

The US market, on the other hand, is a vastly different kettle of fish. And it’s a long way from home.

So what made Rodd & Gunn take on what is arguably the world’s toughest retail market? It’s a question Beagley still has trouble answering.

“We first showed at trade fairs in New York and Las Vegas in 2011, and delivered a spring 2012 collection three years ago,” he explains, adding that they started out by going through wholesale distribution channels and investing in their online business. Now they’re exploring ‘bricks and mortar’ options for later this year.

“As a matter of fact, we didn’t choose the US at first,” Beagley confesses. “A friend of mine badgered me to enter the market for years and I finally relented. There’ve been many days where I’ve regretted it, but overall the expansion has been really good for us as a company. It’s made us tougher, stronger and far more focused, and if we can succeed there, it opens up a whole new world for us.

“Unless you know exactly who you are and what you stand for in the US, you’ll be dead in a very short time,” he says.

Icebreaker is a great example of a New Zealand brand doing well in North America, says Beagley. And because Americans have a very positive view of New Zealand, with its ‘clean, green, outdoorsy’ image, Rodd & Gunn’s branding borrows heavily on that image for the US market – right down to including the words ‘New Zealand’ on its branding.

One low cost, low risk strategy employed to establish the brand in New York has involved The Trunk Club – a unique personalised shopping service. “We have an amazing room where we showcase our brand, and it’s in the middle of Manhattan, two steps from Madison Avenue,” explains Beagley. “Our styling suite is the staff’s favourite room, so they tend to take their customers there if it’s available, ahead of our competitors.

“It’s a brand positioning statement and a great opportunity to give New Yorkers a taste of the Rodd & Gunn lifestyle experience.”

Market insights

Although wholesaling has given Rodd & Gunn a considerable footprint in the US via some 200 stockists across 39 States, plus Canada, Beagley admits that things have been tough and often a case of the proverbial ‘three steps forward, two steps back’.

Nevertheless, by averaging around eight trips to the US annually for the past three years he has gained some major insights into how the North American market ticks.

“The main thing I’ve learned is the importance of having your own team on the ground.

“They’ve given us far better outcomes than agents or distributors,” he says. “Our own employees present us to customers in a more complete and passionate way. They believe, they fight, they give honest feedback and they truly know who we are.” 

Currently he has people on the ground in San Francisco, LA, Dallas, Chicago and New York, all working with retailers to promote the brand.

He says the chosen market entry strategy is costly and risky in a way, but while it may still take years to build up customer loyalty, it works. “It has given the market a perception that we’re much bigger than we actually are.” 

Meanwhile, closer to home, the biggest challenge right now in Australia is the cost of doing business. Beagley says most business expenses, including wages and rents, are far higher than in New Zealand, or even the US.

“If I had my time again I’d have more functions based in New Zealand than Australia, to manage the cost base better. Overall, cost management is a greater focus in Australia than most other things.”

When you consider how long the Rodd & Gunn brand has been around, you have to admire its durability. Beagley puts that down to their absolute focus on quality, and resistance to short-cuts – unlike his competitors. “We’ve also stuck to our core beliefs and values as the brand as evolved and made sure we’re very consistent in the brand’s touch points.”

As for fresh thinking, he says a lot of that comes from having a team all aged under 33. That youthful attitude provides that challenge for him, he admits. 

After all those years, there’s no chance of resting on his laurels. 

Glenn Baker is editor of Exporter. This article was first published in the June 2015 issue of NZBusiness.