34 12 February 2010
SupplierProfile
www.ragtrader.com.au
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No risky business
Sunshades Eyewear is the largest privately owned
eyewear company in Australia, with clients ranging
from Sportsgirl and Oroton to Big W and David Jones.
And it’s this breadth of clientele that’s securing its
future, as Assia Benmedjdoub discovered.
R
price points but across all
odney Grunseit is the
the different channels.”
kind of man who’d
It’s a formula that’s
butter his bread right
worked well for Grunseit
to the crust.
and his team of 106 emThis is the impression he
ployees, with annual turngives as he unfurls an A3
over growing from $26 milsheet of paper across his
lion in 2008 to nearly $32
work desk in Alexandria,
million in 2009. In fact,
where the company has Rodney Grunseit.
been based since outgrowing its Wa- when Grunseit first assumed the role
terloo premises in 2005. There are 18 of general manager in the mid 1990s,
rectangles marked on the page, each Sunshades was generating just under
representing a unique distribution $2.8 million in private label contracts.
It was his ‘obsession’ with growth that
channel for the company.
“We cover every avenue that sells saw it acquire design and distribution
eyewear, except maybe service stations licenses for brands such as Fiorelli, its
and markets,” Grunseit says, pointing first eyewear acquisition in 1998.
There are now 11 brands operating
first to department stores, before moving onto pharmacies, fashion chains, under its umbrella including Ksubi,
e-tailers, sunglass specialty stores, in- Flint, Karen Walker and Le Specs; as
dependents and camping/outdoor well as six key private label clients such
providers. “This is the key to our suc- as Sportsgirl, Big W and Witchery.
cess – we spread our risk not just in Retail prices across its product ranges
vary from $30 to $325. It’s a smooth,
even, well-balanced operation.
That’s not to say Grunseit doesn’t
look back on the company’s ‘DIY’
history with a certain fondness. It all
started in 1968, when his late mother and then pharmacist Bette Lasse
came into a large quantity of generic,
imported sunglasses. In addition to
stocking her own small business in
Bondi, Lasse began to supply other
local pharmacies with any eyewear
products she could get her hands on.
Eventually, she was driven to Taiwan
in 1975, where she looked to source
her own range of glasses directly from
offshore manufacturers.
“She literally got to her hotel, picked
up the Yellow Pages and started cold
calling factories to set up meetings,”
Grunseit laughs. “One of the guys she
met with said he was the biggest sunglasses manufacturer in Asia and she
www.ragtrader.com.au
said she was the biggest importer of sunglasses
to Australia. It turns out he didn’t even have a
factory. They both lied. But the thing is, they
both went on to become what they said they
would. We still deal with him forty years later
and have a great relationship.”
What started off as a $50,000 account with
this particular manufacturer now stands at $3
million annually, Grunseit says. This long and
mutually profitable history allows designers at
Sunshades, of which there are five, to collaborate on opening exclusive eyewear moulds for
Sunshades’ more trend-driven labels. This includes a pair of Le Specs sunglasses with shuttered frames for its next collection. Sunshades
simply develop the ideas, hands them over to
its partner factory and a mould is created specifically for the brand/s.
“[Last] year, we introduced a whole range
of Oroton frames with Swarovski crystals
and our prices shot up from $240 to $300 –
but they just sold really well,” Grunseit says.
“With Morrissey, we released a limited edition range of mirror-lensed, futuristic frames
and they received a great response from media
and customers.”
That’s not to say the Sunshades business
trades solely on exclusivity – far from it, insists Grunseit. The company is not an indent
one and trades off the same product all year
round, replenishing bestsellers on a weekly or
at times daily basis. It wouldn’t be surprising
to find a design dating back 10 or more years
in its catalogue: if it sells, it stays.
“Our favourite team in the whole company,
and I probably shouldn’t say this, is our merchandise management team who communicate with our factories and rank our product,”
Grunseit says. “They’re making sure we’ve got
the right product at the right time and that
we’re never out of bestsellers.”
He claims the biggest problem in eyewear
today is the ability of suppliers to meet demand. Last year, Sunshades sold some three
million units through 4500 retail doors, up
from 2000 retail sites in 2003.
“Our fill rate of orders is about 97 per cent
– you go to other companies and it’s 60 per
cent, 50 per cent. How can a retailer succeed
when they can’t get the product that’s selling?
We’re proud to say we’re mass market – people want sunnies, they want the bestsellers.”
While Sunshades is “happy to sit on stock”,
Grunseit is also quick to stress the importance
of buying correctly. The company operates on
a sale or return model, meaning if a retailer
is unable to shift merchandise it is sent back
to Sunshades’ warehouse in Alexandria. It’s
good news when Grunseit hears clients like
Big W and Sportsgirl report a 40 per cent rise
in retail sell through, which is exactly what
happened last year.
“It’s absolutely risky to have [a sale or return model] on our scale,” Grunseit says. “We
put our nuts on the line, there’s no other way
of putting it. But it also gives retailers a good
reason to invest with us instead of going direct to factories – if you’re a vertical retailer,
what are you going to do with redundant inventory? With a rotational sale or return, we
take care of that risk for them.”
12 February 2010 35
This is the key to our success – we spread our risk not
just in price points but across all the different channels.
Volumes are expected to continue soaring
at its warehouse following its newest acquisitions, Polaroid and The Cancer Council.
When Sunshades made its first round of deliveries for these two brands in mid-2009, it
re-entered the pharmacy channel after a “very
long” hiatus. It started with 1000 active doors
in June and has already grown this to 1100
doors with 80,000 units produced to date.
“We left that channel really, really early on
because back then pharmacists were not retailers, they were drug-dispensers,” Grunseit says.
“Now they’ve split into two categories: discount pharmacies and specialist pharmacies
which can’t and don’t compete on price. We
see the Cancer Council, which is a brand with
a lot of integrity and meaning, as fitting into
the top echelon. It’s a massive brand and it’s
opened up a massive channel we didn’t have.”
In order to cope with the extra volumes,
Sunshades is preparing to invest close to $1
million in new warehousing and IT systems.
This includes wearable ring scanners for employees at its pick and pack warehouse, which
will allow them to scan stock remotely and
more efficiently. But are these investments
optimistic in such turbulent times? Does
Grunseit feel threatened, for instance, by the
increased domestic presence of international
players like Luxottica, which in addition to
operating OPSM and Sunglass Hut distributes brands such as DKNY, Miu Miu, Bvlgari, Ray Ban and D&G?
“In wholesale they have a completely different portfolio to ours; they’ve got the big
luxury internationals, we’ve got more regional
designers like Flint and Karen Walker,” he
says, adding that Sunshades will soon sign
a contract with another “exciting Australian
brand”. “In retail, we supply them, but they
only make up three of the channels in our
retail chart. If we’re ever in jeopardy of losing them or any client for that matter, we just
keep spreading the risk.” ■
Karen Walker Eyewear.
Far Left: Oroton Eyewear.