Business

Cactus Outdoor buy helps local production

Cactus Outdoor says growth doesn't mean the company has to send manufacturing offshore. Quite the reverse.

Everest-summiting clothing label Cactus Outdoor is determined to prove New Zealand’s garment manufacturing doesn’t all have to head overseas.

The 27-year-old Christchurch apparel company has bought Albion Clothing, one of the few large-scale clothing manufacturers remaining onshore. The deal will see the combined companies' annual revenue reach around $10 million.

Cactus Outdoor director Ben Kepes does not plan on taking his business overseas anytime soon, with the seven-figure acquisition sum being “a show of commitment” to the local garment industry.

Kepes says the company has produced clothing that has reached the top of Everest as well as “both poles”. Meanwhile 42-year-old Albion Clothing continues to produce garments and uniforms for organisations like the New Zealand Police and the Defence Force. 

The Albion Clothing factory in Christchurch is one of the largest remaining in New Zealand. Photo: Supplied.

Kepes says consumers are demanding provenance with their purchases, and this is creating a market for businesses such as his.

“There’s a real shift back to people buying locally - things like farmers markets and artisanal producers in New Zealand.

“It’s about educating the consumer - you pay more for a garment that lasts a long time, and is better for the environment and our economy.” 

He says reports like the Tearfund ethical fashion guide and the scandal surrounding New Zealand clothing brand WORLD mislabelling some shirts as “fabrique en Nouvelle Zelande” when they were produced overseas, highlight a growing demand for retailers to be transparent about the production chain of their garments - especially when paying top dollar. 

On the other hand, a Massey University study last year found retailers are most worried about international competition and currency issues, further emphasising the pressure many retailers feel to cut costs. 

Founder of WORLD Denise L’Estrange-Corbet told the NZ Herald that onshore manufacturing is only getting harder as “more local factories close down, with fashion retailers taking their production abroad”. 

But Kepes remains adamant, saying although Cactus Outdoor may be priced at a higher end than a lot of people can afford, he hopes a broader move to ethical practice will balance that. 

Buying a Cactus Outdoor winter jacket can set you back between $300 and $900.

“Eventually every company will need to reflect the cost of their ethical practice and there won’t be much differential.

“Even when Kiwi retailers decide to move manufacturing offshore, the purchase price often doesn’t go down. It just means the retailer is making crazy profits from the consumer.”

The 2019 State of Fashion report, published by international consultants McKinsey & Company, forecasts that by 2025 the number of consumers interested in buying from local or “nearshored” companies will double. Nearshoring involves companies transferring their business operations from a faraway country to one closer to home. 

Retail NZ’s Greg Harford says the sustainability of local manufacturing may lie in vertical integration. He says this is increasingly popular in the apparel industry, with designers often being manufacturers in their own right. 

This integration would make it more possible to remain local, as clothing businesses wouldn’t need to outsource so much from other companies or contractors. 

Local fashion designer Rachel Mills, who three weeks ago acquired clothing manufacturer The Pattern Table, would agree. 

Mills has been designing and producing garments locally for her brand since 2015, using organic and deadstock (leftover) fabrics, and wants to broaden her scope.

She says in its heyday The Pattern Table was a 49-machinist-strong New Zealand clothing producer, but it lost a lot of business with the boom of offshore production. 

New Zealand will never be the place where hundreds of cheap garments are pumped out, she says. But neither will it die. 

“I want Pattern Table to grow, but what I want to preserve most is the skills of the pattern makers and the garment makers. I want a place where these skills can be trained up so they don’t disappear completely.” 

Ryan Jennings, Executive Director of Buy NZ Made, says “it’s a clear win” when domestic businesses merge and are able to remain local in hyper-competitive markets. 

Meanwhile, Kepes says the Albion acquisition signals growth in scale and technology for New Zealand garment manufacturing. He says technology such as 3D printing and a newly-installed robotic fabric cutter makes local production more cost-effective. 

“We have this super fast robot that can do all those little, time-consuming jobs, so now we can apply people to where they really add value to the garment and we can put technology in places it doesn’t really differentiate.” 

He says Albion Clothing will remain a standalone company, and will produce for other clothing businesses, as well as making all Cactus Outdoor’s apparel. 

“If Albion is approached by one of our competitors to produce their clothing - that’s great. We want to be a good business and we believe in the mission of returning this manufacturing to New Zealand.” 

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