Starting out as a small mail order business and retail supplier with only $3000 in working capital, Peter has built a label which now boasts a dedicated and loyal client list of 250,000 including the likes of Kylie Minogue, Salma Hayek, Toni Collette, Nicolette Sheridan & the Hilton sisters to name a few.
Now celebrating 21 years in business and six years of operating retail stores peter alexander has extended into homewares, children’s sleepwear and now has 24 stand alone stores nationally and internationally. peter alexander also has a sizeable online retail business generating about 15% of the business’s total profits. Now owned by the Just Group, Peter Alexander continues to be active within the business as general manager, overseeing all parts of the brand.
Published in 2007, Peter Alexander’s book, “Celebrating 20 years of sleeping around” provides Peter’s first hand account of starting up his business and his view on a number of topics such as customer service and the internet. The ARA Retailer has taken excerpts from his book to provide some insight into the man behind the brand. We hope you find it as interesting as we did…
Peter Alexander – my first business venture
“My first venture was a range of umbrellas. I bought the umbrellas wholesale and printed quirky phrases on them…such as; ‘Cats and Dogs’, ‘Shit it’s Raining’ or ‘Bloody Melbourne Weather’. I came up with the name Storm Sticks and took a photograph of a friend jumping around with one of the umbrellas as a promotion. The Storm Sticks actually sold quite well with Georges and Myer taking stock. I didn’t really have much idea about what I was doing, but my instinct for business seemed to work and this little enterprise lasted through the winter months. I was happy with that project, but I started to wonder what I would do over the coming summer months…”
Finding that elusive gap
“One never knows where inspiration comes from. My father needed to travel to Hong Kong for business and on my insistence allowed me to go with him…
“One afternoon we went to a Japanese department store, and on display was a pair of cream and black spotted pyjamas. I was struck by how incredibly cute they were…On my last day in Hong Kong, before we left the airport, I gave into temptation and ran back to the store and bought the pyjamas.
“Those pyjamas sat forgotten in my cupboard for some time. It wasn’t until after my successful Storm Sticks experience when I was wondering what product I could market for summer that the pyjamas suddenly came to me…”
“When I visited all the department stores to see what was out there, it became apparent that sleepwear was not a fashion item. None of the fashion houses such as Calvin Klein touched them. I discovered there were really only two types of sleepwear available; ‘Little House on the Prairie’ style sleepwear, all-white virginal long nighties, and sexy seductress style, which were usually short, flimsy, sheer red nylon with feathery ribbon and lace.
“It didn’t really make much sense. None of my female friends at the time were necessarily either virgins or seductresses. I asked them what they wore to bed and learnt that they often bought their pyjama pants from the men’s section of a department store and wore them with a T-shirt. That’s when I realised there was a gap in the market for the ‘in between’ women…who were neither ‘Little House on the Prairie’ nor ‘Little Whorehouse in Texas’.”
The peteralexander legend – starting out
“I couldn’t sew, but I knew what I wanted. I had a sample and I just needed to know what first steps to take. My friend in the industry, Aviva, offered to help me get the business off the ground. She took me to some fabric wholesalers and I picked out the fabrics that I liked. We then took the pyjamas I’d bought in Hong Kong to a pattern maker. It was a very basic pattern, which hasn’t really changed all that much over the years.
“To get any factory to make as few as 30 to 40 garments is not an easy task, so we had to be a little inventive. We told them that we needed to produce a first sample range that would be followed by an order of a few thousand. We figured it would cost about $3000 to get started to cover the cost of fabrics and sampling. I asked my father if he would lend me the money and I showed him everything including the fabric sample, the pyjama pattern, and explained exactly what I intended to do with the capital. He loaned me the $3000…”
“Once I had my samples made up, I labelled them with my name on the outside instead of the inside, which was unusual at the time…”
“I rang David Jones and Myer and told them I had a great new range of sleepwear that wasn’t like anything they’d seen before…”
“At exactly 9:30 am Tuesday morning, I entered a small office at David Jones with a suitcase full of samples…As I opened my suitcase and pulled out my samples, her face changed to a look of horror. She told me I was wasting her time and my time…”
“I felt pretty deflated after the meeting and wondered whether I should bother going to Myer. I sat in the Bourke Street Mall for about 45 minutes before deciding I might as well keep the appointment. I went into the office and was greeted by a young girl in her mid-twenties. She told me that they had just had a staff reshuffle and that the old buyer wasn’t there anymore. She added that she was only temporary and that the business was new to her. As I began to pull my pyjamas out of my suitcase, she could hardly contain her enthusiasm. ‘Oh god I love them! All the sleepwear I’ve been seeing is so boring. This is great. I’ll take what you’ve got now and put them in the city store, and if they sell, I’ll order thousands.’
“Two days later, I received a call from the same buyer: They’ve all gone, they’re selling like hot cakes, when can we get some more?’”
 |  |
Retail supplier and mail order business hits the big time
“The catalogue business took off like wildfire. We had to stagger the mailouts to different states because we didn’t have the equipment or staff to handle all the calls at once. It got to the stage where we would sell out of stock from orders that came in from NSW alone, without being able to supply customers in other states…”
“I discussed my predicament with my mother and some business advisors introduced by friends, and the consensus was that we should put the business on the market…”
“I had a business advisor who liaised with the Just Group and negotiations started going backwards and forwards, and I was starting to think that if it was taking this long, perhaps they were losing interest…”
“We couldn’t believe our business could be worth so much. We had always considered it to be ‘small fry’, but it was a profitable business and the brand had achieved such good recognition it was now worth a lot. The Just Group understood that it was underdeveloped and had huge potential….”
“After the first year, the company took off, and ever since, it has just got better and better. It grew from a turnover of about six million to about 13 million in a few years. The Just Group encouraged me to discuss all our options: Do we want to expand the product range? Do we want to go overseas? Do we want to move into retail stores?”
“I had lots of discussions with the architects and interior designers about how I visualised the store. I told them about the brand and what I wanted people to feel when they walked into a peteralexander store. I decided that the stores should bring the catalogue to life in the sense that they would be more than clothes hanging on racks. I wanted the stores to be a memorable experience that engage people’s senses on all levels; to be able to feel fabrics and smell candles and hand creams…”
“We decided to open two new peteralexander stores; one in Melbourne Central, a new untested shopping mall in the city, on the third floor, which is the slowest and the other in Chadstone, which is one of the busiest, most successful shopping centres in Australia. I thought that opening these two different locations would be a good test for the business.
“From day one, the stores took off. People didn’t mind going up to the third floor to hunt out the shop and it quickly became a destination store. Retail was a whole new experience for me and it was such a relief to see my clothes selling well in that environment. The Just Group were so thrilled with the response to the new stores, they opened two more in Sydney straight away. They are now planning six stores a year for the next three to four years.”
The product or the brand – what carries your business?
“If you are thinking of starting a business, what are you doing to make your product different in the marketplace to attract customers?
“In my business I have created both a product and a brand, and I think there is an interesting dynamic between the two.
“In the early stages of the business, the product carries the brand, but as the product gains recognition, the brand often carries the product….”
“Creating a product or brand is only half the battle. An important question you need to ask yourself is: ‘How am I going to maintain it?’ “Where I have seen many businesses fail is by not taking customer service seriously.
“My simple rule is:
How would I want my mother to be treated? That is how I treat my customers.
My other rule is: Don’t make rules, make guidelines.
“Staff tend to love rules and follow them to the letter. But that’s not always in the best interest of good customer service. You need to have some flexibility in interpreting those rules to fit the particular situation. For example, the ‘Return Policy’ might stipulate a three week return limit but staff should have the latitude to extend this if they are serving a regular customer or some circumstance arises that may warrant an extension.
“You may have heard this mantra for customer service 100 times, but I cannot stress it enough…try to make 99% of your customers not only happy, but over the moon about how you respond to them. To achieve this in my business, we aim to do better than expected.
“We advertise our delivery to be within seven to 10 days of ordering, which is industry standard, but we actually deliver within three working days 90% of the time. Why then don’t we advertise a three-day delivery? Because, not only does it give us room for error, but also customers are pleasantly surprised when their order arrives early and leaves them with a very positive impression of the business.”
The internet and retail
“The Internet is either a highway to hell or a highway to heaven. It can work really well if you understand exactly what it is you want out of it. If you want to use the website for people to find out about your business it needs to be visually appealing. If you want customers to come and buy product it is more important the website be very simple to use and navigate than to look amazing. It also needs to make people feel emotionally safe and comfortable about submitting credit card details. You can’t expect people to stumble across your site. So you need to ask yourself why they would want to come to visit and how you are going to get them there. This is an extremely hard thing to achieve unless you have a big advertising budget or are a well known brand.
“But exercise caution, the internet can be a very tricky proposition. My advice is to not invest too much money in a website. Make it simple, smart and easy.”
