Emma Wallace is the managing director of New Zealand-based fashion label Kowtow. Here, she discusses the challenges of a sustainable supply chain, how sticking to your established values helps you stand out, the hidden advantage in not having a strategy at first, and what the business has planned for the next 10 years. She also says there’s a good chance you’re mispronouncing the company name. Inside Retail: What is the story behind the launch of Kowtow? Emma Wallace: One of the things that
that is a bit of a talking point is that the brand is actually pronounced ko-to. It comes from the word ‘kowtow’, which means to show deep respect, but Gosia Piatek, who founded the company in 2006, is actually a Polish refugee who came to New Zealand, and she thought it was more like the Maori word ‘tena koutou’ [pronounced ten-ay ko-to], which is a greeting. But we are happy for you to say it whatever way you want. Gosia started Kowtow with her partner at the time. She really wanted to create a business that put people and the planet at its core, but she didn’t know what that was going to be. A friend asked her if she had ever thought about organic cotton, so she started looking into it and ended up creating a T-shirt brand. Her partner was a graphic designer, and he made screen prints that were quite street-y and rebellious. After a few years, they decided to split up, so Gosia decided to turn the company into more of a fashion clothing brand, which is what it is today. What I think is really cool is that the core purpose and values of the business have always been there, which is quite different from what you’re seeing in the fashion industry nowadays. A lot of businesses are retrofitting their values, but we’ve had them front-and-centre the whole time. Although we’re a clothing brand, our challenge is to use only natural, renewable, and recyclable materials, not only in our clothing, but also in our packaging and our workroom. We have a goal to have zero plastic in all our clothing by the end of next year. People don’t realise that clothing is made up of many components. Hidden inside clothes, there’s elastic and fusing and buttons – all sorts of things – so that’s a really exciting goal for us. Something that is very important to Gosia is ensuring we have a circular business model. We’re obviously still on a journey to do that, but we’ve really embraced this idea of product stewardship and taking responsibility for what we put out on the planet. IR: What challenges does this present in the supply chain? For instance, do you find that there’s enough choice of natural fibres? And how does the cost compare with synthetic fibres? EW: When Gosia decided to use organic cotton, she looked to where organic cotton was produced, and from day one, she formed a partnership with Fairtrade ANZ, which is part of Fairtrade International. They work with producers on the ground in India, which is the largest producer of organic cotton in the world. She had to fight her way in, because she was such a tiny little brand, but she found an amazing partner that we still work with today. We have a Fairtrade supply chain, which is certified from the farm level. We’ve visited those farmers about half a dozen times. Apart from working with Fairtrade, we work with GOTS [Global Organic Textile Standard], which looks at the dyeing and processing and ensures that there are good social standards in the places that we work with, as well as environmental standards around the dyes and inks that are used, and the use of water. Nine years ago, when I started in the production side of the business, I said, ‘We can’t just have one supply chain. That’s putting us at a lot of risk.’ So we bought another one, but we still have a very simple supply chain. I think that’s one of the really important elements to Kowtow. We are about simplicity and taking away, not adding. Reductive design is the start of the circular business model. For instance, we don’t use any zips because they’re very difficult to repurpose, we use only natural buttons. We’ve slowly taken away as many components as possible to get to that natural core. You’ll be aware of the issues in China around cotton, which has meant that the world has looked at other producers, so there is more competition in India. There are moves to increase that production, but we have really strong relationships with our supply chain. We understand if [prices] go up, and we just have to see how we can manage that along with our partners. All through Covid, we actually haven’t increased our prices. We’ve just tried to absorb it and become more efficient to try to still be a profitable business. Image: Supplied IR: You’ve been with Kowtow for a number of years, and became managing director in 2019. Was the idea for you to scale up the business? EW: When you have a founder who’s in the company, they do everything. And then as the company gets bigger, they have to peel off things. When I first joined, I was the number-six employee. Obviously, the idea was to take it to a different level. But for us, it’s not just about growing for the sake of growing. We want to remove synthetic garments from the chain and put natural Fairtrade organic garments in their place. About 13 years in, Gosia and I decided that we did want to look at how we could grow the company. We worked really closely with NZTE [New Zealand Trade and Enterprise] and Deloitte on a longer-term strategy. I think we felt we needed to get to a point where we had the bases of the business covered, so that we could scale. I think it’s taken us this long to feel like that. Now, we’re a crew of 44 and we have a 10-year strategy, which we never had before. The chair of our board said, “You guys are a really interesting business, because you’re incredibly good at implementing and executing and getting stuff done, but you don’t have any strategy. Most businesses I work with, it’s strategy first, and they find it really hard to execute and actually get anything done. They can’t figure it out.” He has helped us see the importance of strategy, and how it’s going to guide the business and everyone in the business towards this bigger goal. I think that’s exciting. We don’t all have to be cookie-cutter in our approach to how a business evolves. We come out of this patriarchal system, which maybe doesn’t recognise what it means to be a women-led business. We do business a little bit differently, and I think that’s a strength. IR: What are some of the key aspects of your 10-year plan? EW: I talked a little bit about the idea of replacing synthetic garments with garments that are Fairtrade organic, and also having that circular model as opposed to a linear model. Those principles are really driving that strategy, but it’s also about growing into Australia more. At the moment, Australia represents about 24 per cent of our sales. That’s through our online store and our wholesale stockists. What we’re wanting to do is grow that ambitiously over the next few years, and build on that direct-to-consumer offering as well. We feel it’s really important to get omnichannel right. Online is amazing, and it’s an incredible opportunity to reach people and places and give them that accessibility, but we have found that going into a physical space has been incredibly transformational for our business in New Zealand. We opened our first retail store in Wellington in 2017, and our second in Auckland in 2019. Giving people a chance to feel our fabric and try on our garments is a point of difference for us. We worked with Rufus Knight, who is an amazing interior architect, to create the most beautiful spaces using natural materials that are sustainably sourced, and you feel it when you’re in it. We struggle to even put vinyl on the windows, because it’s plastic, so we’re constantly getting our VM team to come up with extraordinary solutions. I think constraints are what make you work harder and keep engaged in your brand. IR: What will your physical footprint look like in Australia? Will it be a smattering of stores, or a bigger presence? EW: For us, it’s not about doing more, it’s about doing less. Would Kowtow go into 20 stores across the country? Never say never, but for us, it’s more about that curated experiential retail opportunity. We’ve done a bit of market research recently, and we’ve seen that our customer is someone who really loves community, so we’re going to be looking beyond the CBDs to where our customer lives. Our Wellington flagship is a really big store, and pre-Covid, we used to host events. We’ve had panel discussions around sustainability, and we hosted Nadia Reid, an amazing New Zealand musician, who did a concert one evening. We’re a store, but actually, we’ve got another message. Gosia has always said the clothing is a vehicle, it’s not what the company is about. With retail, it’s about community, experience and being able to connect with customers – it’s not about rushing in and out. We tend to employ artists, as opposed to retail people, because they understand the concept and they’re amazing at delivering it. When you love something, it’s not hard to sell it.