Cotton On Group might be the next big thing in America.
The Australian retail company is wildly successful and just reported its first $1 billion year in revenue.
The 25-year-old apparel company has well over 1,400 stores in 17 countries, and now it has plans to continue its rapid expansion in the United States.
The company has launched 121 US stores in the past six years, with a corporate hub based in Los Angeles. The company has six hubs around the world to help manage its business across the globe.
The apparel company ostensibly operates on a fast fashion modicum, selling trendy clothes to women, men, and children for low prices. Its subsidiaries are further reaching, as they include a lingerie, sleepwear, and swimwear store (Cotton on BODY), a shoe store (Rubi), and a stationery store (Typo). In addition to its namesake apparel store, it also has Cotton On KIDS, Cotton, Factorie, and Supré under its umbrella. Currently, Cotton On, Cotton On Kids, and Typo are in the United States.
But despite being a global entity, the company prides itself on its Australian lifestyle.
“The Australian way is far more humble and [an] understated sort of style,” CEO Peter Johnson said to Business Insider, while maintaining that the company is just “aggressive internally.”
The expansion is, indeed, aggressive: it plans to open hundreds more stores in the United States in the next three to five years. Currently, ten stores are on track to open this year.
Obviously, competition is steep, but Cotton On Group maintains that it’s different from other fast fashion companies.
“We focus on the customer rather than the competition,” Johnson said.
Johnson also prefers to forgo the phrase “fast fashion.”
“We prefer to use the term value fashion,” he said.
“What you pick up you think is going to cost a lot more than it really does,” he said, adding that the company isn’t “playing to a price point.”
However, Cotton On’s stores have something in common with fast fashion companies like Zara: a tight supply chain.
Johnson highlighted the importance of moving quickly in the apparel industry.
“The response of something that takes off is so much faster and so much bigger …. that period used to be anywhere from six to twelve months,” he said. “I think that period has crunched.”
Look no further than how Instagram has changed the way consumers shop — people see styles on Instagram and immediately want to sweep them up. This change has been partially responsible for undoing traditional retailers like Gap.
“When there’s something that’s working in the market you need to be on it really fast … because everyone will get it, and so it’s important to be confident to go big and large with confidence early …. as opposed to at the end of the cycle.”
He said that Cotton On uses testing to make sure that products hit the right buttons with consumers.
The company is also attuned to the consumer’s desire for a connection.
“I guess the other thing we’re seeing more recently is a far greater need to have a connection a brand, not just the product,” Johnson said. ” So we feel that … customers are looking for something a bit more genuine, a bit more real, [asking] ‘what’s the story behind this.’”
“We have that story resonating with our customer,” he said.