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When Peter Alexander started his business, he always had a Plan B. Alexander says planning for the worst allowed him to focus on the future of his business, which now turns over $150 million a year, has close to 100 retail outlets and is planning to expand overseas.
When Peter Alexander started his business, he always had a Plan B, as he said at the ‘Business Events Program supported by NAB’.
Alexander says planning for the worst allowed him to focus on the future of his business, which now turns over $150 million a year, has close to 100 retail outlets and is planning to expand overseas.
“When you start a business it is not always easy, there are always ups and downs,” he told the audience at a Virgin Australia Melbourne Fashion Festival Business Breakfast on Monday.
“If you plan your exit and always plan the worst case scenario it’s a good place for your mind to be, to say I’m comfortable with the risk, I can put that at the back of my mind and concentrate on going forward rather than panicking about what will happen.”
For instance, when he imported in his first container loan of pyjamas, they cost $20 to $30 each and if they didn’t sell, Alexander’s mother would have been forced to sell her house. So he got an outlet store to agree to buy them at $10 each, which would have meant a loss but allowed his mother to keep her house.
As it happened, selling enough product was never Alexander’s problem.
He started the company as a mail order business with his mother three decades ago at her dining room table, a few years after he spent $80 on a pair of pyjamas in Hong Kong because they reminded him of innocent childhood times.
“There was something about these traditional pyjamas that made me smile and I realised that if that emotional connection can sucker me to spend eighty bucks, then perhaps I can sucker all of you to spend eighty bucks,” he jokes.
Alexander realised that a lot of his female friends were actually wearing men’s flannelette pyjamas, and so his idea of doing patterns on pyjamas for women was born. “It was so new on the market that it took off,” he says. “I thought this might last me six months and 29 years later I’m still in the pyjama game.”
The business took off, but financial rewards were slower to come. It was five years before he or his mother took a pay check while he invested the cash back into the business. Alexander supplemented his income as “Melbourne’s top hand model”.
“I got $150 per hour for these suckers,” he says, holding his hands up. “That was always my Plan B.”
Alexander struggled with the demands of a growing business.
A turning point came when the company posted mail order catalogues around NSW as the first step in a national campaign. Customers in NSW bought 95 per cent of the stock, leaving Victorian customers disappointing and angry with the company. “I thought, ‘my God, I’m damaging my own brand’,” recalls Alexander. “I’ve grown the child into a terrible teenager who wants to leave the roost and be even bigger than I wanted him to be.”
This was behind his decision to sell the business to the Just Group in 2000, so he could remain with the company and concentrate on doing what he does best. “One of the reasons I’ve been successful is that I know what I’m good at and what I’d bad at, and what I’m bad at is managing a business and handling the stress of doing that and then having to be creative on top of that,” he says.
Just Group started opening Peter Alexander stores, which created some initial challenges. Selling pyjamas in a catalogue is easier because you can take the customer to a fantasy destination, using attractive models and exotic locations such as Tahiti.
In the store, however, pyjamas hang baggily on the rack. The solution was to concentrate on creating the “brand essence” in a retail environment. “If you walk into a Peter Alexander store you can smell it, you can touch it, you can have a laugh – we’re not just selling a product, we’re selling a brand.”
“People quite frankly don’t need to spend $100 on a pair of pyjamas – they want to, so what you’ve got to do is make sure the minute they walk into your store it’s a great experience and they’re feeling like they’re spoilt themselves.”
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