One of the country’s oldest accessories firms, best known for its handbags, Oroton is emerging as a savvy brand manager, with a revitalized flagship label that executives hope will grow into a $50 million business in five years. It further plans to increase its international presence.
“We have a lot of growth for Oroton on the international stage ahead of us,” said Ross Lane, Oroton’s managing director. “The five-year plan is to become a dominant player in the U.S., Europe and Asia.”
The company, which now has sales of about $36 million, also operates 32 stores worldwide, with plans under way to steadily add more units in Australia and in the U.S., Europe and Asia. U.S. brand equity is already building and is a vital component of the company’s long-term strategy to establish Oroton up as a global brand, he said.
The brand has been in the U.S. since the early Nineties, and in 1997 Oroton was licensed to Charleston, S.C.-based Sydney Harbour, which now wholesales the brand to Macy’s, Nordstrom, Bloomingdale’s, Belk, Dillard’s, Parisienne and Bon Marche. Oroton’s U.S. retail prices start at $165 and run up to about $325.
The brand is positioned between luxury and moderate in department stores, with Coach and Dooney & Bourke among its key competitors, according to Sydney Harbour’s vice president, Rhys Moore. Three Oroton stores have opened in Los Angeles, Charleston and Leesburg, Va., with more stores slated to open by 2003.
“We’d love to have five to 10 stores in the next several years, but we’ve got to get our current retail concept working and moving in the right direction before we look at other venues,” said Moore, who defined Oroton’s U.S. business as “under $20 million” wholesale.
“Coach is a $500 million company, so I don’t see why we couldn’t be a $500 million company someday,” he said. “But I think a reasonable goal is probably $50 million in five years.”
Founded by fabric importer Boyd Lane as Boyd Lane & Co in 1937, the company dabbled in everything from Japanese rubber thongs to German metal compacts before hitting the jackpot in the late Fifties with its Oroton-branded collection of metal mesh handbags. Oroton expanded into Italian leather accessories in the Seventies and, in the Eighties, jewelry, watches, eyewear, belts, ties, scarves and travel accessories.
The firm went public on the Australian Stock Exchange in 1987 with 70 percent of shares tightly held by the Lane family. It quickly grew into a multibranded, international operation, manufacturing and distributing the licensed brands Ken Done, Fiorelli and Polo Ralph Lauren in Australia, as well as leather goods for the brands Pringle of Scotland in the U.S., U.K. and Asia, Oscar de la Renta in the U.S. and Australia, and Anne Klein in the U.S., U.K. and Asia.
In the mid-Nineties, Oroton suffered from a host of problems in its U.S. operations, including trouble with a third-party warehouse arrangement, and took its eye off its Australian business. As a result, the firm failed to make a profit for several seasons.
In 1997, Boyd Lane’s grandsons, Ross and Tom, took over as managing director of ORL and general manager of Oroton, respectively. To turn the company around, they closed down Oroton’s Australian factory, the loss-making Oroton USA division and every brand other than Oroton and Polo Ralph Lauren, acquiring 100 percent Australian and New Zealand rights in 1997 for everything under the Polo Ralph Lauren umbrella, except for fragrance and eyewear.
Repositioning Oroton as a hot fashion brand was a first priority. “We realized about four years ago that our Oroton consumer was after fashionable, contemporary product that was made with good quality,” said Lane. “And when you looked at what we were offering them, it didn’t fulfill that brief in the product and the way we presented the brand, its retail environment in-store or marketing. We went about changing all of that.”
New categories for fall include a leather coat line, designed in-house, and a lingerie collection, which is produced under license by the Gazal Corp.
Meanwhile, an updated store design and new advertising imagery have boosted the brand’s profile. The company over the last two years has incorporated a new retail look featuring hardwood floors with dark blue carpet and white ceilings.
The “Story of O” spring campaign shot by Australian photographer Richard Bailey and starring Italian model Greta Cavazzoni is currently running in Australian magazines, outdoor advertising and a teaser campaign via e-mail.
A two-page insert ad featuring its Hobo bags ran in the December issue of In Style in the U.S.
The revamp has clicked with Australian consumers, where the brand is sold through department and specialty stores, duty-free shops and 28 freestanding Oroton units. ORL operates a further 23 signature shops between its two other brands: Polo Ralph Lauren and local fashion label Morrissey, which the company purchased in December for about $1.1 million (converted from the Australian dollar at current exchange rate.
Although the share price remains relatively static at $2.04, ORL has delivered hefty profits. For fiscal 2001, the company reported a 15.6 percent increase in net profits at $2.86 million. Sales rose 10 percent to $35.92 million, nearly half of which was derived from the Oroton brand.
Oroton is scouting for new local brand acquisitions and scoping out potential international partners, and is also exploring categories such as fragrance and housewares.
“We’re looking at a combination of licensees and joint venture partners, but certainly partnering in countries with local expertise,” said Lane. “When we do it, we’ll do it correctly.”