COMFY BOOT MAKER GETS PRICKLY RUN ON HOME TURF
Written on the 17 July 2015 by Jenna Rathbone
GOLD Coast-based boot manufacturer UGG Australian Made Since 1974 has accused larger rivals of freezing it out of the lucrative international tourist market on its home turf.
The Miami-headquartered company, headed by Richard Friedrichs, has slammed both Harbour Town and Pacific Fair shopping centres for not supporting local businesses, saying the centres are under the thumb of big retail groups.
UGG Since 1974 has hit a wall with its plans to increase its retail footprint on the Gold Coast over the past six months. The plans have been spurred by growing inquiries from tourists and international buyers urging the company to sell its products at Harbour Town and Pacific Fair - two of the city's biggest shopping destinations.
Friedrichs says both centres have been approached to no avail. He says he all but secured space at Pacific Fair, but the deal was ripped up at the last minute.
Friedrichs blames the might of True Alliance, one of the country's largest distributors, for influencing the decisions of landlords.
True Alliance, which is home to some of Australia's favourite brands including Ben Sherman, Coach, Lacoste, Lee, Reebok and Speedo, has a large presence at Harbour Town with around 10 brands scattered through the centre, including UGG Australia.
Friedrichs says Harbour Town's reason for not giving UGG Since 1974 a lease was because it already has an ugg boot store at the shopping centre.
"But that doesn't make sense because if I have a look at the centre's retail directory, they also have 25 mixed fashion stores, a bunch of food outlets, Nike, Adidas and Asics - tell me what the difference is between those stores?"
Friedrichs also says UGG Since 1974 is a custom-made, bespoke offering that is vastly different to True Alliance's UGG Australia. UGG Since 1974 boots are designed and manufactured in Australia, while UGG Australia manufactures overseas.
"You have all of these Japanese and Chinese tourists heading to Gold Coast shopping centres, buses full of them, and they are not interested in coming to Australia to buy Chinese-made Ugg boots," says Friedrichs.
"They are coming to Australia, among other things of course, to buy a pair of genuine, 100 per cent Australian-made ugg boots.
"We can also make high-end bespoke boots within 48 hours and deliver to the customer's hotel. With UGG Australia, you are just buying off the shelf."
True Alliance was contacted for comment but declined to respond.
Harbour Town says while it will not comment on specific tenants or companies, the reality is that demand exceeds supply and "not all can be accommodated".
"Harbour Town is an extremely successful centre and the demand from a wide range of retailers and operators to lease space is naturally high," says Gary Webb, centre manager.
"It is a simple fact that there is not always space available for lease to satisfy the demand.
"When space is available we carefully identify the usage that best suits the needs of the centre in response to the market."
UGG Since 1974 says Pacific Fair offered it a lease last month, only to cancel the contract 48 hours before the lease was to have taken effect.
In a statement, Pacific Fair says the casual agreement with UGG Since 1974 was identified to be utilised by an existing retailer due to staging changes. It says the agreement was subject to cancellation prior to the end of the term for any reason whatsoever by giving the licensee four hours' notice.
"True Alliance are not party to the previous agreement negotiated with UGG Since 1974," Pacific Fair says.
"The cancellation of their short-term licence agreement was purely due to accommodating an existing retailer - who has been with the centre since June 2011 - to relocate within the centre during the development and ensuring their service is available to all our retailers and customers during this transition."
In Pacific Fair's indicative retail plan, an ugg boot store is planned for the ground level, next door to True Alliance's Coach store. Pacific Fair could not confirm if this ugg store is to be occupied by Ugg Australia.
"The retail mix is ever changing and dictated by market data," says Pacific Fair.
"Market data assists our leasing team in identifying if there is opportunity and growth in a particular group. This is something we monitor regularly and would consider when reviewing our retail mix. There is no lease on foot from either party, as such there is no exclusivity provided to either retailer."
With more than 75 per cent of UGG Since 1974's customers coming from overseas, Friedrichs says he is not getting a fair go.
"I want to get into these two centres because clearly our customers go there," he says.
"We have a unique service to offer, which is the fact we can manufacture to people's specifications. We can do it in a timely fashion, we are 100 per cent Australian made - and we get bumped by an American brand that is made in China.
"It is frustrating that Australian landlords are not prepared to give genuine, unique Australian brands a crack at the marketplace."
Author: Jenna Rathbone
About: Jenna Rathbone is a Queensland-based journalist who writes on a range of issues including business and property affairs and social issues.Connect via: Twitter