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LAW ÀLA MODE Issue 9 – Spring 2013 Retailing landscape in Australia Industry Insight with Arlene Tansey, Non-Executive Director of Pacific Brands One size does not fit all Options for restructuring your business when expanding overseas Management within management Employment issues arising out of concession stores The pitfalls of a parallel market Growing up A review of UK Children’s retail sizing standards Creativity required Developing a legal strategy to protect fashion in the United States High Court reaffirms Importance of confidentiality 3D Printing A designer’s friend or foe? Business round-up Creating links in the fashion chain Calendar Fashion, Retail and Design Group Contents RETAILING LANDSCAPE 04 in Australia INDUSTRY INsiGHT 06 with Arlene Tansey, Non-Executive Director of Pacific Brands ONE siZE DOES NOT FIT ALL 08 Options for restructuring your business when expanding overseas MANAGEMENT WITHIN MANAGEMENT 10 Employment issues arising out of concession stores THE PITFALLS OF A PARALLEL MARKET 12 We look at parallel: Imports in Australia GroWING UP 13 A review of UK Children’s retail sizing standards CrEATIVITY REQUirED 14 Developing a legal strategy to protect fashion in the United States HiGH CoURT REAFFirms 16 Importance of confidentiality 3D PriNTING 16 A designer’s friend or foe? BUsiNEss roUND-UP The news and the views 18 CrEATING LINKS IN THE FASHioN CHAIN DLA Piper joins the IAF 19 CALENDAR Our round-up of what’s on where you are 20 02 | Law à la Mode Editorial The Australian editorial team is delighted to bring you the perspective. It may sound like arcane science fiction, but 3D ninth edition of Law à la Mode, the quarterly legal magazine printing may actually become a household item fairly quickly, produced by DLA Piper’s Fashion, Retail and Design group for with the cost of 3D printers falling and the necessary software distribution to clients and contacts of the firm worldwide. becoming more readily available. Read more on page 16. The Australian retail market has seen dramatic change Protection of intellectual property and business goodwill is over recent years. On the fashion front, high street brands a critical issue for brands and retailers alike. On this front, based overseas such as Zara and Topshop are flooding to we examine avenues for protecting fashion designs in the our shores and establishing a competitive presence within a United States (page 14), as well as a recent decision of market traditionally occupied by Australian domestic retailers. the UK High Court relating to protection of confidential The last few years have also seen a boom in luxury brand information by employers (page 16). presence within Australia, much to consumers’ delight. In this This issue also includes a look at the advantages and pitfalls edition, we examine what these changes mean for local of the most common business structures used for overseas Australian retailers, as well as considering the challenges expansion (page 8), employment and workplace issues faced by overseas players when entering the Australian retail that may arise when operating a concession store within a marketplace (page 4). department store (page 10) and the results of the UK’s We also share with you some fashion industry insights from ShapeGB review of children’s retail sizing standards (page 13). one of Australia’s leading company directors, Arlene Tansey Finally, we conclude our ninth issue with the usual business of Pacific Brands. Pacific Brands has operations throughout round-up (page 18) and the calendar of upcoming fashion Asia Pacific and in the UK and is famous for marketing many events (page 20), to ensure you remain fashion-forward no iconic brands such as Berlei, Bonds and Sheridan. We’re sure matter where you are. you will enjoy our Q&A with Arlene, appearing on page 6. We hope you enjoy this edition of Law à la Mode. If you have Parallel importation is a hot topic around the world. any comments, please get in touch with the Fashion, Retail and In Australia, the Australian dollar is strong and online retail Design group via our email address: [email protected]. is booming when compared with sales in traditional bricks and mortar stores. This has a range of implications for both importers and brand owners, and may require them to adjust existing operational models to maintain a competitive stance AUStraliaN Editorial Team and preserve the bottom line. We take an in-depth look at these issues on page 12. Melinda Upton We also discuss the phenomenon of 3D printing and the Stephanie Surm implications it has for mass manufacturers and retailers Rohan Singh the world over, particularly from an intellectual property Alex Chubb www.dlapiper.com | 03 Retailing Landscape IN Australia By Jane Baddeley (Melbourne) 04 | Law à la Mode OVerView of the chaNgiNG AUStraliaN Another challenge – unique to Australia – is its regulatory retail laNDScape framework for retail leases. Since the 1980s, attempts have been made by state governments to redress the perceived Until relatively recently, the Australian retail market was imbalance in bargaining power between landlords and small occupied in the main by domestic retailers. Many such retailers retail tenants. Each state and territory now has its own are long standing and are considered national icons, but gone retail tenancy legislation, which is in the nature of consumer now are the days when those local retailers were the sole protection legislation, designed to ensure small business drawcard to our major shopping centres. Now customers are owners are informed and equipped to enter into formal leases flocking to the new players – overseas brands like Zara and which are equitable and conducive to the success of their Topshop, who have recognised that the time has come to tap proposed enterprise. into the Australian market. Unfortunately, the fact that the legislation differs across The wiNDS of chaNge internal Australian states combined with anomalies of drafting, means that protection is distributed inconsistently. In the last few years we have observed two main changes For example, a retailer that is either listed in Australia on a to the Australian retail landscape. First, we are seeing an public exchange or is a subsidiary of a listed company will not explosion of luxury brand presence: no longer just the domain be protected in Victoria, but will be subject to the legislation of flagship CBD or casino sites, luxury brands are setting up in NSW. The same quirks apply for an overseas retailer, with shop in dedicated high end precincts in our suburban shopping bodies corporate whose securities are listed on a World centres. Second, we are seeing the arrival of numerous Federation of Exchanges stock exchange outside Australia, and overseas high street brands, particularly in the fast fashion and their subsidiaries, being excluded in Victoria, but not in NSW. general apparel sectors. There have been recommendations for uniform national Australians have long been familiar with both of these sets retail tenancy legislation around Australia. It would appear of brands, having been introduced to them in the course that achieving this is some way off, with state and territory of overseas travel and more recently as a result of online governments continuing to turn their attention to other issues. shopping sites extending delivery services to this part of the Where the legislation does apply, it prescribes landlord world. But now these international retailers are more formally disclosure before the lease is entered into, minimum lease terms entering our market, with their own bricks and mortar stores, of five years, compensation to tenants for disturbance and and bringing their experience and competitive pricing achieved redevelopments, rent review, operating expense and sinking through economies of scale. fund limitations, use of tenant’s sales information, procedures We cannot yet know the longer term effect on our local for landlord consent to assignments of lease, relocation retailers. Are these overseas retailers taking the consumer requirements and dispute resolution processes. It is important dollar at the expense of home-grown traders or are they to realise that this regime is more than just a code of conduct injecting much needed renewal and confidence into a market and, for the most part, it is not possible to contract out. that is at the mercy of economic fluctuations? The regulatory overlay can make negotiating retail leases Vacancy rates in major Australian shopping centres are at the somewhat complex in Australia because of the need to lowest levels in years and owners continue to have a healthy understand how the statutes interact with and affect the appetite for renewal and redevelopment of those centres. common law rights and obligations, both in contract and Development of brand-new centres has slowed in recent tort, which govern commercial leases generally. It also can years due to the economic climate, but we are seeing a revival be more expensive for both landlords and tenants because of CBD retailing with Westfield Sydney and the soon to be of the need for state specific lease documentation and lease completed Melbourne Emporium. advice. On top of that and quite apart from the retail leases legislation, each state and territory in Australia has differing land title regimes, meaning sometimes leases are registered ChalleNgeS faced wheN ENteriNG and sometimes they are not. the AUStraliaN retail marKetplace Australia is an obvious market for US, UK and European brands. There are few of the language or cultural barriers that are faced in entering other markets. But supply chain and reverse season issues are challenging, and several companies have faced difficulties with local distribution and licensing relationships. www.dlapiper.com | 05 INDUSTRY INSIGHT with Arlene Tansey, Non-Executive Director of Pacific Brands For this edition, we caught up with one of Australia’s leading company directors, Arlene Tansey.

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