The fashion business that ‘deserves to be on the ASX’

It was 2006 when Edwina Forest first laid eyes on Adrian Norris. He had popped into a fashion boutique in Brisbane where Forest was working to ask for directions.

“He was dressed very . . . unusually,” says Forest. “He looked like a Norwegian tourist. He was given the worst directions and I spent the rest of the day feeling bad, thinking he must have been so lost.”

Fate intervened and by coincidence, the pair met again that very night at a mutual friend’s birthday party. Norris, from Noosa (not Norway), was about to open his own clothing boutique on Hastings Street after studying art in Italy; Forest was soon to move to Sydney to work at Russh magazine.

That same year, Norris had opened his store, Strada. It was a sort of 21st birthday present (he asked his parents to lend him money) and it stocked brands such as Kit Willow, Josh Goot and Sass and Bide. “For Noosa,” he says, “it was cutting edge. We thought we were very cool.” Forest, who grew up in the Darling Downs and Toowoomba, took the magazine internship and stayed for two years, eventually becoming fashion editor.

She and Norris stayed in close contact, visiting each other regularly. One place they’d often meet was Australian Fashion Week, where Forest was a stylist and Norris was buying for Strada. Eventually “they” became “we”, working on Strada together despite their physical distance.

“We were each other’s fashion sounding boards,” Forest says. She regularly worked at the shop when she visited Noosa. Their mojo was simpatico. They worked well together. But they had no idea how to make money.

“We were completely clueless,” says Norris. “I still ask my parents, ‘why on earth did you lend me that money?’” He would write business plans constantly, he says, “but we knew nothing about actually running a business. We were kids. We didn’t even do end-of-day [sales] reports. We nearly went bust so many times.”

Business nous aside, the pair could see that something else was missing.
Those sleek Josh Goot suits and tropical kaftans needed, somehow, to meet in the middle: the prettiness of a dress with the acid sharpness of tailoring. “People wanted things for holiday but also things they could take with them back to the city,” says Forest. “And we just thought, why don’t we make them? So we did.” In 2008, Aje was born.

“Everyone thought we were mad for a long time, didn’t they, Edi?”
Forest nods. “I think we were, a bit.”

Forest and Norris are best friends; it’s clear Aje would not work without “their equal push and pull”, as Glancey characterises it. “Edi is very maternal,” she says. “Gentle, quiet, assuring.” Rarely seen in anything but Aje’s oversized suits, Forest presents like the coolest girl in school but was probably more likely to be found in the art studio or library.

Which is not to say she is not cool: married to French-born photographer Felix Forest (with whom she has two children), Forest has a coterie of who’s-who style friends, from designer Jeramie Hotz (wife of David Caon) to florist Saskia Havekes, Chanel head of communications Fiona Young and designer Collette Dinnigan. It is Forest who has supercharged the Aje look. Those sleeves? They’re all hers.

“We were doing things very differently, especially for Australia at the time,” says Forest of the brand’s launch in 2008. “We wanted the pieces to work in a resort context and a city context. And so we would style them that way and even though they might look like opposing sensibilities, they worked.” It is a principle that she uses to this day.

Much of the early production happened in Bali, where Norris had moved in 2007.

“That was out of naivety – we simply didn’t know other places where you could manufacture,” says Norris. But there were surprising upsides to the choice. “Everyone else was importing belt buckles from China but because I lived in Bali, I could see that there were still all these incredible artisans working, and there were people who could handcast pieces for us.”

Those askew brass buckles on Aje belts, or the stone-shaped buttons on their dresses and shirts? They were born in Bali, made (at first) by hand. It was a similar story with fabric: in Bali, it was difficult to import cloth, so Norris used what was available – raw linen and cotton, now two Aje signatures. “Because we couldn’t get things, we would make do,” Norris says. “If we couldn’t print something, we would embellish or embroider it.”

“We’ve never been trend-oriented,” adds Forest. “Each season we went with what felt right to us. We have become known for the drama and embellishments, but all of that was there from the start.”

The look may have been there but again, the money eluded the duo. In the early years, they operated with a mix of wholesaling and direct-to-consumer, opening their first store under Hugo’s in Sydney’s Potts Point. “It was an office, really, but we turned it into a store,” says Norris. “As soon as a customer came in, we would close our laptops and pretend we were sales assistants. Then they’d leave and we would go back to work. We did that for two, three years.”

For the fledgling business owners, it was a good start – and one that gave them a certain work-life balance. “We would be across the road at night, drinking at Hugo’s Bar Pizza, and we could see if there were people looking in the window,” says Forest. “If there was a crowd we’d just go across the street and let them in, make the sales and go back to our wine and olives.”

Still, she says, the market didn’t quite understand Aje. “Some [wholesale] accounts would only buy the resortwear, some would only buy evening. There wasn’t a lot of cohesion. It was really only when we opened our own stores that people understood the tale we were telling.”

There was a time when opening bricks-and-mortar retail was on the nose. The focus was on selling direct to the consumer, online. It was cheaper, it required less expertise and could be set up by an enterprising would-be designer with a Shopify account in less than a day. Norris and Forest resisted that path, opting instead to open their own physical stores, and going so far as to end their wholesale agreements (for a time, at least).

It was exhausting, says Norris. They had one store and a heap of wholesale accounts. Stores rarely paid on time so they didn’t have the cash flow to employ staff. “We were working our arses off and had nothing to show for it,” he says. So he went home one night and took up his old hobby – writing business plans – and mapped out what an Aje vertical business might look like.

“Retail was the way to make money,” he says. “People would pay us straight away, instead of this big long production cycle where you might never see the money, or you might see $1000 nine months later instead of the $30,000 they owed you.”

Between 2011 and 2015, Aje closed its wholesale contracts and used the money it would normally have spent on fulfilling those orders on two new stores in Chapel Street, Melbourne, and James Street, Brisbane. With the money that began flowing in, they hired their first staff members.

“It took the pressure off us,” says Norris. “We didn’t have to do the accounting or the production cycle management any more. The business has been built by adding people who know how to do things better than us.”

It was a risk to end Aje’s wholesale relationships but one that allowed them to funnel money back into the business to expand into new categories, which lately they have done with gusto.

Aje Athletica was launched in 2021 – not as a response to our COVID-induced leggings mania, Forest and Norris are at pains to say, but because the athleisure wear they were already making under the Aje banner was taking up too much space in their stores. “Athletica has allowed us to do something completely different,” says Norris. “It’s technical, it’s about function. That is new and exciting.” There are now 15 standalone Athletica stores and in August, the brand hosted its first-ever runway show.

There are rumours the Athletica sub-brand is underperforming. A source close to the brand says this is perhaps unsurprising, given the saturated fitness apparel market. Norris waves this off. “Everyone says [Athletica] must be tough, but name another fashion house that does athletic wear with a big store network,” he says. “There’s not that many.” This diversification, he says, is part of Aje’s overall strategy to be more ubiquitous in the lives of its customers.

“You always have to adapt to changing conditions in retail. You can give yourself the best opportunities and still, there is a good chance nobody will buy the dress you want them to buy.” Bricks and mortar is a challenge now, he says, “but we survived the GFC, we survived COVID.” Still, Aje is moving away from “dopamine dressing”, he says, to more timeless styles. “It’s not just about the dress you wear once.”

If Forest is the maternal spirit behind Aje, Norris, in the words of one associate, is “the Energizer Bunny”. Glancey describes him as a “force of nature”. And though he may have started the business without any sense of how to actually run it, everyone I speak to waxes lyrical about Norris’ financial nous. I’m told he is a savvy negotiator, the kind of person who hears a set of numbers in a meeting, immediately parses them and spits out a response, calculator-style.

He’s also in touch with his woo-woo side; he told The Australian Financial Review in February that he employs three different personal trainers, a mental health coach, a life coach and an energy healer named Tiki. Which is how he came to launch Ikkari, his range of beauty and wellness products.

Ikkari is “Adrian’s baby”, says Forest. The name is a play on the Aegean island of Ikaria (famed for the longevity of its residents), and the range of skincare and supplements is available online and in Athletica stores. Launched earlier this year, it is not improbable to imagine that this venture into the lifestyle space is just the beginning for Aje.

“Diversification is wonderful,” says Forest. “We want to cater to the complete lifestyle of the woman, her whole day.”

Norris and Forest still own the majority of their company. Norris’ father has a stake of just over 8 per cent, James Roche (an executive director at Roche Holdings, a mining group) has 4.5 per cent. Norris and Forest retain 37 per cent each, while friend Thomas Mort, whose family owns the Bodalla dairy business (Mort also runs TSM Investments), has just shy of 13 per cent. In July, ASIC reports showed that Mort had become a director in the company alongside the founders.

Norris says this is so Mort can sign retail leases when he or Forest are away (“a logistical nightmare”) but when pressed reveals that Mort is, in fact, a key sounding board.

“I used to nod and pretend I understood things like cash flow reports,” says Norris. “But Tommy sat me down and we stayed there until I understood it. And now that’s like 80 per cent of what I do.”

Today, insiders say Aje’s revenue is somewhere between $100 million and $120 million, with the healthy margins one would expect of fashion. It’s well on the way to Zimmermann, which, according to its last financial reports (filed in 2020), makes about $125 million before interest, tax, depreciation and amortisation. (Norris says: “Our business is not as big as Zimmermann’s . . . but we are chasing their tail.”)

He agrees that his gamble on retail paid off. “Yes, it was a risk,” he says. “But we were stuck. And we were young. We were dealing with a lot of small stores, and if they went bust, we might too. I always felt that it was much better for us to have control.”

This year, Aje showed at Australian Fashion Week for the ninth time but it feels as if the business has outgrown the event. In what was easily the grandest, most expensive show of the AFW calendar, Aje showed at the Sydney Modern Project, the new wing of the Art Gallery of NSW. Models paraded up and down the venue’s curved staircases for 300 guests.

Previous shows have been staged at the Museum of Contemporary Art, the Calyx at the Royal Botanic Garden Sydney and Campbell’s Stores. Before the MCA show, a publicist (not working for the brand) pulled me aside and whispered, “this is a brand with money to burn”.

Next year it plans to open in New York. Already about one-quarter of sales are overseas, and Norris wants NYC to be the first of many international stores and a stepping stone to ultimately showing at New York Fashion Week. “One day,” he says, with uncharacteristic hesitation. “It’s a dream.” Which would be a long way from Aje’s first show, at Sydney’s Paspaley boutique in Martin Place.

It was, Forest says, a significant moment but one that she pulled off with favours and a DIY set. “We had been going to shows for years at that stage, and they always felt so out of our reach. Being in a place where we could do it ourselves was amazing. I still don’t know how we pulled it off.”

A source familiar with the balance sheets of fashion houses describes the business as “a great Australian success story . . . the kind of company that deserves to be on the ASX”. One hint of this is the board Forest and Norris have assembled, which includes former Bank of Queensland CEO Stuart Grimshaw and the aforementioned Mort.

Aje dipped its toes back into wholesale in 2015 in an exclusive partnership with Myer; two years later, it defected to David Jones, where it is still stocked today. Internationally, you can find Aje in Nordstrom and Saks Fifth Avenue in the US, La Samaritaine in France, Selfridge’s in the UK and Etoile in the Middle East, as well as online at Net-a-Porter and Matches Fashion. In 2022, retail sales grew by 279 per cent and revenue was up 217 per cent, according to the business’s data.

Last year, The Australian Financial Review’s Street Talk reported that Aje was exploring external investment via its bankers, Morgan Stanley; the latest rumour is that Country Road Group wants to buy the company (the group says it “won’t comment on speculation”).

“The market is not great right now,” says Norris of a possible sale or public offering. “There is potential [for a sale] in the future, yes. We are a profitable business. We would never say it’s not going to happen . . . but it’s not going to happen in the next few months.”

So now Norris’ problem is not that he doesn’t know how to make money, it’s that the business has grown at such a rate that he is finding it difficult to put the toothpaste back in the tube.

“One of my problems is that I dream big and then those dreams come true,” he says. “At the end of last year, I sat back and thought, ‘holy shit. We have created two new brands, and Aje is also growing like crazy. We are so overworked’. My personal workload tripled. I assumed we could handle it but there came a time when we couldn’t. And we needed to think about the long term. Maybe we could handle it now, but not in five or 10 years’ time.” Hiring three CEOs for the sub-brands was the first step.

“It’s amazing for Edi to be a creative at the top, rather than down in the details,” says Norris of the new structure. “That is where her talent lies; not in making every single T-shirt but in overseeing the collection and the overall vision.” And it has allowed Norris to “be surrounded by people who I can discuss ideas with, and they often improve them . . . and then execute them. It’s the dream.”

It has allowed each to take their first long holiday in years; indeed, this interview is done in three time zones (Sydney for me, Italy for Norris and France for Forest, who has just been to a wedding there. Despite her company’s success, she says she still felt humbled to see some guests – strangers to her – wearing Aje).

“I look back and think, ‘how did we survive?’” Norris says of the past three years. “We needed to set up the business for future success.” In the beginning, he and Forest did that by wresting back control, now they are doing it by letting go somewhat. “We needed to look for the people who could set us up for being a billion-dollar business,” he says. A billion dollars – that’s a big number, I counter. He grins. “Yes,” he says. “It’s not there yet. But it will be.”

The Fashion issue of AFR Magazine is out on Friday, August 25 inside The Australian Financial Review.

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