Languishing in luxury land: three reasons why Oroton failed as a fashion brand (2024)

I've had three Oroton bags in my life. The first one, given to me by my grandmother, is still in its box. In the 1970s, I am sure it was the height of fashion, with its white metallic mesh outer and silver clasp.

My second was a smart shoulder bag, black, with the unmistakable "O" ring on one of the straps.

Finally, in the early 2000s, a boy trying to win my heart bought me a black clutch for Christmas with a nifty chain that you pulled that activated the mechanism to open the bag. The boy is long gone – although we're still email friends – and the bag, well, I'd still use it today, if only I could find it (sorry, T).

So the news on Thursday that the company had entered voluntary administration after a turbulent year was bound to affect women all over who can place an Oroton bag or purse at various milestone events in their lives.

While it's the intention of the administrators that the company will trade "business as usual" while a solution is found, it's unlikely the brand, as we once knew it, will ever be the same again. So where did it all go so wrong?

The rise of "accessible luxury"

When the company was riding high in 2010, then CEO Sally Macdonald celebrated the brand's place in the then burgeoning "accessible luxury" market.

"I think we are in an affordable luxury segment which is much more value than a luxury European brand but much, much better quality than the high-street, cheaper, alternative brands," Ms Macdonald told the Sydney Morning Herald in March that year.

But in 2010, online shopping was still gaining traction and the influx of overseas brands in Australia hadn't yet happened. It's fair to argue that Oroton went from being a big fish in a little "aff-luxe" pond, to a small fish that got eaten by gummy sharks the likes of Mimco and Mon Purse, as well as more niche brands such as Deadly Ponies, all of which compete in the same $500-range price bracket.

Ironically, Oroton owns a 30 per cent stake in The Daily Edited, another brand most likely to have taken some of its market share. (The Daily Edited refused to comment on Oroton when contacted by Fairfax Media.)

It held on to unprofitable stores

Call it the Topshop effect. Just like the failed Australian arm of the UK fast-fashion chain, Oroton continued to pour big dollars into high rents at stores that were not attracting the required level of traffic. On the spectrum of online shopping, many people would consider buying a bag one of the least risky transactions. So maybe all that floor space was needlessly gobbling up the profits.

It was too expensive and staid

Granted, Oroton tried to make itself cool, signing actress Rose Byrne as its "face" (it dumped her in March to save money) and enlisting social media influencers, including Kate Waterhouse, to spruik its bags but its prices were out of reach of many of the Millennials it was trying to engage. With fast fashion dominating the retail landscape, young consumers have become more interested in either owning many bags (the fast-fashion model), or an "it" bag by saving for months for the likes of Gucci, Saint Laurent or even Coach. Sadly, Oroton found itself caught in the middle.