Businesswear brand Three Wise Men has encountered a different and challenging market in Australia since it expanded across the Tasman.
Managing director Richard Miles, from Karori, said it had to adapt to meet the needs of Australian customers.
Three Wise Men specialises in affordable business shirts. Two years ago Miles felt the brand - aimed at businessmen so viable only in metropolitan centres - had reached capacity in New Zealand, and launched it on the Australian market.
The firm found competition fierce in Sydney, particularly from department stores David Jones and Myer. Overheads, including rent, staff costs and distribution, were much higher than in New Zealand.
To gain a competitive edge, Three Wise Men is looking at offering three-hour delivery in Sydney and overnight delivery elsewhere in Australia, at no extra cost to the customer.
"It's been a very steep learning curve and lots of hard work, a disproportionate amount of time for the size of the business to tweak and get things working over there," Miles said.
In 2004, when he was working in sales management for underwear brand Bendon, Miles had the idea of starting a business that produced well-made, affordable business shirts.
Friends Hugh Cotterill and Simon Peacocke agreed to back the business and Miles set about finding a manufacturer in China willing to make the products in small runs.
"Despite going from one store to eight stores our volumes are still tiny in Chinese manufacturing terms," Miles said.
It took an initial capital investment of around $500,000 to get the first store - a 39-square-metre shop - open in Newmarket in June 2005. About six months later a second Three Wise Men was opened, in Wellington.
There are now six, including one at Wellington Airport, two in Auckland and one in Christchurch, with total turnover of around $10 million.
Most Three Wise Men customers are aged 25 to 45.
The typical corporate colours of white and blue are still their staple choices, although there had been a shift towards more colour and a skinnier fit, favoured by younger shoppers, Miles said.
With one fabric choice, Miles admits he got carried away.
"It was a gingham shirt in red and brown, quite a nice gingham, but I did a big multicoloured floral embroidery on the front which I'd actually seen overseas done by some pretty expensive brands. It just did not work here.
"Five years later I've still got quite a few of that shirt sitting in our warehouse unfortunately."
Three Wise Men sold ties and cufflinks from day one. It later started stocking boxer shorts, made out of the same fabric as its shirts.
About two years ago the firm launched a range of suits, then a range of knitwear alongside other workwear items such as canvas bags and leather satchels. Miles was now in negotiations to develop a line of men's footwear.
"Margins are getting tougher, for a bunch of reasons," Miles said.
"Cotton prices have gone up, transport costs [have] gone up."
The Wellington branch of Three Wise Men still operates from its original site, on the corner of Panama St and Lambton Quay. It has consistently been the busiest store in the network.
"It's very small but we have quite an efficient use of space.
"The Wellington store is our best . . . we think it's because there is this really contained city centre with a lot of foot traffic.
"It's also quite a suity or well-dressed capital. We think there are more suit wearers and shirt and tie wearers in Wellington."
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