From Fiji to Paris

It’s a long way from Fiji to Paris, but the world’s fashion capital is set to become Kookai Australia managing director Rob Cromb’s third home after he bought the global
23 Oct 2017 11:00
From Fiji to Paris
Kookai co-founders Danielle Vagner and Rob Cromb.

It’s a long way from Fiji to Paris, but the world’s fashion capital is set to become Kookai Australia managing director Rob Cromb’s third home after he bought the global Kookai business from apparel company Vivarte.

The debt-funded deal, which was completed in July after almost a year of negotiations, will more than double Kookai’s size, lifting sales from around $105 million (FJ$213m)  to $220 million (FJ$447m) and increasing the number of stores from 39 in Australia and New Zealand to about 235, including 165 in France.

Mr Cromb and his then-wife Danielle Vagner launched Kookai in Australia in 1990 under a franchise agreement with the brand’s French founders, opening the first Kookai store in Chapel Street, Melbourne, in 1992.

The Fijian-born retailer divides his time between Kookai’s headquarters in Melbourne and its manufacturing operations in Suva, and plans to travel to Paris at least four times a year to oversee his new investment.

“We didn’t really set out with the ambition of buying a global business,” Mr Cromb told AFR Weekend. “But we had invested a lot in the brand, we were a very similar size to Paris and so we were the logical buyer for the business.”

Private equity-backed Vivarte is selling most of its clothing brands to focus on footwear, and restructuring more than $1.9 billion ( of debt.


Management team impress

“Strategically there was an enormous value accretion in the transaction, but the real decision to go ahead and buy the business was after we met the management team in Paris,” Cromb said.

“If anyone buys a business offshore and doesn’t have the right team to run it you’re going to be in trouble.

“[Vivarte] had recruited a very strong CEO [Laurence Benat] and I could see she was making some massive changes to the way Kookai was operating … she would be at least 60 per cent of the reason we decided to go ahead with the acquisition.”

Kookai Paris returned to profit in 2017 for the first time since 2008, earning US$658,798.6 (FJ$1,340,128) and Mr Cromb expects strong earnings growth this year.

Mr Cromb says Kookai is now at a size where it can gain entry to the larger factories that supply global fashion chains, but probably needs to double sales to hold its own against the likes of Zara and H&M.

“To be able to compete you need to be of size,” Mr Cromb said.

“I don’t see any reason we can’t create a US$500 million (FJ$1,017m) business. I don’t have a time frame but I’d be thinking in the next 10 years we should be hitting those numbers.”


Boosting basics range

Cromb plans to boost Kookai’s range of basics such as T-shirts, sweaters and jersey dresses, a move that helped turbo-charge sales in Australia more than 20 years ago, and franchise Kookai stores in new markets in Europe and Asia.

Mr Cromb also plans to consolidate about 50 per cent of suppliers but says the group will continue to manufacture in Fiji, where he set up clothing factories 20 years ago and now employs about 900 people.

“We could find savings of 10 to 15 per cent in other countries but at this stage we have a commitment to our employees in Fiji and that overrides finding other locations,” he said.

The 53-year-old father of two, who grew up in the tiny village of Nawaido on the Fijian island of Vanua Levu, is now one of the most influential figures in the Australian fashion industry.

Kookai was one of the first Australian fashion retailers to adopt a vertically integrated model, designing and sourcing its own product to supplement orders from Paris and enable it to deliver fresh stock into stores every week.

“Never in my wildest dreams would I have thought this … I’ve come from a very modest background and to get as far as I’ve got still to this very day surprises me,” Mr Cromb said. “I punch myself and think wow, I still can’t believe I’ve got this far.”

Mr Cromb attributes the company’s success to its staff and plenty of elbow grease.

“We managed to surround ourselves with the smartest people we could hire,” he said. “But to be honest it’s been a lot of hard work and blood sweat and tears.”


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