A Queenstown retailer selling jackets for around $4000 each plans to open a shop in the Dubai Mall because its owner says it can’t survive selling only here.
Best of New Zealand (BONZ) owner Oscar Rodwell said the decision was made to go to Dubai because of uncertainty from New Zealand border closures.
More than 90 per cent of sales were once to international tourists and now with no foreigners, the businesses’ two Queenstown shops have lost more than 75 per cent of their revenue.
“Sales are terrible. We had to look at our entire business model. We waited for a couple of years for things to change,” Rodwell said.
“We have got a lot of staff and a lot of mouths to feed and we can’t keep waiting for the Government to decide that it’s safe because it could take another year and in a year’s time we might not be around,” he said.
It had been able to bring the sales to half pre-Covid levels so were looking at the overseas markets, like Dubai.
“Queenstown is pretty dire. It’s not a good place to be doing business at the moment,” he said.
“The future is unknown … ongoing border closures … I don’t know if we are going to open up in New Zealand here for some time,” he said.
“For us, we are just looking at moving offshore. We’re not just going to rely any longer on borders opening. We’re not going to sit around and wait for it,” he said.
Transport issues and factory closures in China for accessories like zips and shopping bags which BONZ imported from Switzerland caused problems.
The price of importing from Europe would be factored into the costing but the cost of accessories was marginal and it wouldn’t have a huge impact on their business.
The Queenstown shop was founded in 1983. It sells locally-made clothes.
The industry was “struggling” because of lack of demand and had slowed production but the problem would be if demand soared again. Then, current levels of supply wouldn’t be enough, Rodwell said.
Due to reduced demand, the retailer reduced supply too but with the lowered production there would be some future consequences.
“We can get supply at the moment but my concern is in rebuilding, as soon as we have high demand we are going to run into huge supply issues because everything in our industry has scaled down during the pandemic,” he said.
“At the moment there is really low unemployment which means we won’t be able to get staff to support the growth in our industry,” Rodwell said.
He has two Queenstown shops. The only Australian shop was shut last year.
Lambskin jackets and hand knits are the retailer’s most popular products.
Retail NZ chief executive Greg Harford said when businesses start to move overseas that is a clear indication of New Zealand losing its spot as a desirable place to trade.
“We are becoming less attractive as a shopping destination and a tourist destination because we start to lose some of those luxury brands that underpinned top-end tourist experience,”
And it takes time to build back your reputation, and individual stores around New Zealand are a part of that.
“As you find business looking elsewhere to set up shop, it diminishes New Zealand overall position,” Harford said.
The latest survey by New Zealand Made brands has found global container shipping charges are three times what they were prior to the pandemic, with consumer spending on goods surging as a result.
About 40 per cent of brands surveyed by Buy NZ Made said they had issues with shipping, including importing raw materials and exporting finalised goods made in New Zealand.
Buy NZ Made executive director Dane Ambler said with more costs and delays on the horizon this year and urged Kiwis to support the domestic market by shopping local.
“Around 29 per cent said lockdowns were the biggest challenge faced in 2021, while 15 per cent were hamstrung by cashflow issues.
“Our largest city spent 107 days in lockdown, so understandably Auckland businesses have borne the brunt of the 2021 restrictions,” Ambler said.
Meanwhile, 7.5 per cent of businesses surveyed said skills shortages hampered their operations, with the border largely closed to overseas workers.
The year ahead
In 2022, businesses will be looking for a strong recovery, with 54 per cent had been expecting strong revenue growth prior to Omicron restrictions in New Zealand.
About 15 per cent will be actively seeking new customers, and 11 per cent are hoping to optimise their processes. Of those surveyed, 7 per cent will be launching new products and 6 per cent are eyeing exciting new innovations.
About 5 per cent of Kiwi businesses will be cutting costs, but, only a few businesses will be cutting staff, which is positive news, he said.
“Few would have predicted restrictions would go on this long. With Omicron knocking at the door, 2022 will be another year of do or die for so many New Zealand Made businesses that need local support.
“Let’s make 2022 another year of shopping local to help communities and keep Kiwis in jobs.”
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