Buy a House or Open a Shop? He Put Everything Into the Shop | Edward Maradona

[00:00] Cold open

Kane: We had like 15 different trades, 140 staff. You lose touch because there's so many touch points.

Eddie: I can't get Nike. I can't get New Balance. How can I be a true sneaker store without these brands?

Kane: If we got an opportunity back in the day, it was like, yeah, we'll do it, we'll make it work.

Eddie: The things that I thought were going to give me a lot of money actually ended up almost driving me bankrupt. I lost almost half a million dollars on stock.

Kane: A lot of customers don't really understand the cost and why things cost so much.

Eddie: You need money to make money. That's like the old saying.

[00:34] Introduction

Kane: Hey, I'm Kane Tyler Smith, the founder and CEO of Smartfix and Hypotential. This is Unlocking Business, where we have real conversations around business, leadership, mindset and personal growth. If you've been getting value from these conversations, please take a second to like, subscribe and follow our channels. It helps us reach more people, bring on more guests and share more stories. Now, let's get into this episode.

Today I'm joined by Edward Maradona, founder of Cabinet Noir. Eddie's story starts a long way from fashion retail: a semi-professional breakdancer working at Foot Locker, obsessed with sneakers and dressing fresh. At 28, he had a choice. Buy a house, or take every dollar he had to open a shop with zero industry experience. He chose the shop. That was back in 2013, a single store in Shafto Lane. Twelve years on, Cabinet Noir is regarded as one of the top boutiques in the country, importing exclusive designer labels from Paris and Tokyo fashion weeks. The store's moved twice since, and Eddie calls the current one at Karrinyup Shopping Centre "Cabinet 3.0". Along the way he's also tried his hand at hospitality with his own cafe in the city, and dressed names like UFC Hall of Famer Jon Jones and Machine Gun Kelly, who wore Cabinet Noir on stage. Thanks for coming on the show.

Eddie: Thanks for having me.

[01:50] The celebrities who've shopped at Cabinet Noir

Kane: Some big names have come through your shop.

Eddie: Yeah, we've had a lot over the last 12, 13 years. Even the first store got a lot of celebrities coming through. I remember DJ Snake was probably my first celebrity guest, and I didn't know who he was. The photographer was like, "You need to take a photo with this guy." I'm like, "Who is this guy? I don't know him." "His name's DJ Snake. Watch, in the next six months he's going to be huge." And after that he just blew up and became the number one DJ in the world, which is crazy. After that we had Joey Bada$$, Lupe Fiasco, Diplo, Imagine Dragons, just to name a few, and The Kid LAROI before he got big. So it was really cool to see a bunch of people, but the ones I like are the ones that spent money.

Kane: Was that when you were in Shafto Lane, right in the city centre?

Eddie: Shafto Lane and Raine Square, because it was just so convenient. A lot of celebrities would walk around and ask, "Hey, what's a cool shop?" and a lot of people directed them to us, which was really good.

[02:48] The biggest spender: Imagine Dragons

Kane: So who's someone that spent a lot of money with you?

Eddie: The biggest spender was Imagine Dragons. It was during our sale time, and these three guys came in dressed really cool. You can just tell in Perth who's not from Perth by the way they dress. I asked, "Where are you guys from?" "Oh, we're from Vegas." "Vegas? What are you doing here?" "We've got a show tonight." So I went behind the counter and Googled who's doing a show. "Where are you guys performing?" Perth Arena, I think it was called something else back then. And I'm like, oh my god, you guys are Imagine Dragons.

They were like, "You guys want to come to the show?" Yeah, let's go. He spent about 20 grand that day, I think. He was like, "What else do you have?" I brought the racks out from the back, all the expensive stuff. "Yeah, I'll take that. I'll take that. I'll do that." Which was really cool.

Kane: That's really cool. And they invited you to the show as well.

Eddie: Yeah, they gave us VIP tickets and stuff like that, which was really cool.

[03:54] Buying a house or opening a shop at 28

Kane: So at 28, you had the choice between buying a house or starting a shop. What made you choose the shop?

Eddie: I grew up working retail, starting at Foot Locker, and it was our dream to open a shop. Everyone at Foot Locker said one day we're going to have our own sneaker store, and a lot of us actually did open our own stores, which is really cool. Initially I wanted a sneaker store as well, but it got really political and complicated, which I'll talk about later, and how we diverted into high fashion. But yeah, either buy a house or open a shop. I thought this is like a one-time opportunity. I didn't want to work on a mortgage and be tied down to something I wasn't sure about, so I decided to put everything into the shop.

Kane: It sounds like the more fun option.

[04:48] Spending $300k on the first store fit-out

Eddie: It was a lot of fun, but I was young and naive. I didn't even think about the risk. I just had money. I'd saved up enough and I was like, what do I do with this money? Looking back, I should have asked for advice from someone in finance, because I blew all my money on the fit-out. Even the wood, I was importing American oak. I had bricks from Sydney, custom tiles. Just crazy detail in the first shop. The second shop, I learned from that: all right, let's not overspend on the fit-out. And then the third store, again, a lot of learning curves along the way.

Kane: Do you know what you spent on that first fit-out?

Eddie: Yeah, we spent about 300 grand on a small store. It was only about 80 square metres. At the time it was massive. I remember getting the carpentry bills: "What? Why is it so expensive? 50 grand for what?" "Oh, the shelves." "Why are they so expensive?" "Because you wanted it custom." Even the door was custom. And the steelwork. We had this feature, a staircase to nowhere.

[05:59] The staircase to nowhere

Eddie: Inside that little store we had a staircase that went nowhere, up to a platform. We called it the staircase to nowhere and it became a feature of the store. Every shop has its own kind of feature. You want people to come in and go, "Oh, what's that?" When you go to Japan or the US, there's always a feature in the store that makes people want to take photos, and that was it for me. I spent a lot of money on that.

Kane: Would people sit on those stairs and get photos?

Eddie: You could sit on the stairs and take photos. We had a mosh pit in there once and the artist was actually on the stairs, which was really cool. It was a great photo-op kind of thing.

[06:34] Inside the new Karrinyup store

Kane: And what's in your new store? I know you've got the motorbike near the front.

Eddie: The motorbike near the front, but now we've installed power lines. We have exposed ceilings, and convincing the shopping centre to let us have exposed ceilings was hard, because usually it's a no-no in a shopping centre, but they agreed to it. It elevates the height of the store a bit more and makes it feel bigger. We needed something big structurally and we thought power lines would be great. Then my steel guy says, "You won't believe it. I found eight abandoned power lines on the side of the street." I'm like, yeah, let's take four of those. They're actually real, because it would have cost a lot more to bend the steel into that shape. So yeah, those are real power lines.

Kane: That's cool. And you've got the best view in the shopping centre.

Eddie: I've got the best view in the shopping centre. If you ever come to the centre, we're the only store with the city view. Originally that spot was for a bar or restaurant with an alfresco area. It brought a lot of attention. People come in like, "Why are you guys in a food court?" And I thought it was kind of cool, being a retailer in a food court.

Kane: I was going to ask about that, because the location is quite niche. It's kind of out of the way. Do you get much foot traffic from people who don't know what your shop's about, or do people come specifically for you?

Eddie: Both. The ones who already know the brand know exactly where we are, and when we moved, they took the time to find it. "Oh, I've been trying to find this place for ages. Cool spot." But about 80% of our traffic came from the food court. People went for a kebab, there's a kebab shop next door. So we get a lot of new customers every single day. In the city we had no repeat walk-in customers anymore. Gone are the days when we used to go to the city and just shop. Now people go to the city to pick up their passport, or go for dining or drinks.

[08:31] Why Perth's CBD has lost its shoppers

Eddie: The city needs a lot of cleaning up. I feel like Perth city needs a revamp in a massive way.

Kane: Yeah, we spoke about that the other day. We used to go to the city when we were younger, but I think now people are a bit lazier, and you can do it online. Karrinyup is amazing, there are so many different kinds of shops. Whereas in the city you have to go to one part for the cool shops, and if you want Myer or the more generic stores you have to walk miles. And there seem to be a lot more homeless people these days as well. That's what deters people, right?

Eddie: My staff were getting abused every day on the way to work, and you'd see people zombied out in the morning while people were getting coffee. It's not a shopping area where you can bring your family anymore. Back in the day, late-night shopping on a Friday was buzzing. There were families everywhere. Saturday and Sunday, you'd go to the city to shop. Now a lot of retailers are moving out of the Hay Street area. If you notice, Hay Street is almost empty now. I think the council wants to turn it into a hospitality street and keep Murray Street as the only retail area, which is really sad. That was an even better reason for us to move out of there completely.

[09:47] Karrinyup, one of Australia's busiest shopping centres

Kane: Is Karrinyup the biggest in WA?

Eddie: Karrinyup is, I think, the second or third busiest shopping centre in Australia.

Kane: Oh, in the whole of Australia?

Eddie: Really, really busy. What they need is better parking.

Kane: I was going to say, how about the parking?

Eddie: Parking is an issue, even though they've got thousands and thousands of bays. They just approved a plan for two more storeys of parking, but that's only going to add about 300 bays. Not enough. But you just have to get there early, I guess.

Kane: Get there early, go to one of the gyms. There are a few gyms in there now as well.

Eddie: There's so much in there. I can literally spend my whole day there. Cafe, restaurant, gym, movies. I can take a lunch break, get a massage and come back. My lifestyle at that shop is amazing. So good.

Kane: You probably spend a lot of money while you're at work.

Eddie: Yeah, I need to de-stress. I let my staff know I'm going to the movies or something like that. It's so good. You can't do that in the city.

[10:49] How breakdancing led him into fashion

Kane: Tell me a bit about your breakdancing history.

Eddie: I was a breaker from when I was 16, 17. Initially I was just trying to pick up a girl, basically. I was a bit of a nerd, really shy, couldn't talk to girls. At the time I was really into this girl and she got me into hip-hop, because I was more of a Blink-182 kid listening to punk rock and alternative music. She said, "Oh yeah, I listen to hip-hop," and I'm like, "Oh yeah, me too," just trying to impress her. So I started buying hip-hop CDs, dressing more hip-hop, as a teenager would do anything to get attention. I remember watching a Run-DMC music video, "It's Like That", and it's a b-boy breaking battle, and I was like, yes, that would impress her.

I told her I wanted to learn how to break, and the next time I saw her she gave me a flyer. Remember the store Live back in the day? It was probably one of the coolest shops back then, and they had flyers stacked up for a breakdancing workshop. "You want to learn how to breakdance? This is for you." I went to the first workshop and got hooked. Then the second, and I think I ended up doing all eight workshops. I became so addicted to that dance. The first thing the teacher did was a move called air flares. You can Google it. It's probably one of the hardest moves to learn, although now kids do it in eight months. The teacher said he'd been doing it for six years, and in my head, in six years I could look like him, because he was jacked and good-looking, from Germany. Shout out to B-Boy Simba.

So I was like, in six years I can look like that and do that, sign me up. From then on, all I was thinking about was breaking, breaking, breaking. I was so obsessed with it that I started to forget about the girl. I remember sitting my TEE exams thinking, I need to leave so I can go to practice, and I'd finish early and jump out to go practise in the city. There was a bridge above Forrest Chase at the time, so we'd say, "We're training at the bridge." We used to break in public at Central Park in the city until we got kicked out. If we got kicked out, we'd move to the bridge, and if we got kicked out of the bridge, we'd move back to Central Park, because it was free. You'd just bring a boom box and meet other kids as well. It was really cool.

[13:33] Winning Red Bull BC One Australia in 2013

Eddie: Then in 2013 I won Australia's Red Bull BC One, which is the number one breaking event. So I became Australia's champion in 2013.

Kane: That's when you started your shop.

Eddie: That's when I started the shop, and that's also when I retired. Once I reached number one and I was representing Australia, it wasn't that I disliked the dance anymore, but I'd reached the level I wanted to be at. I wanted to hang out with the legends. I started hanging out with the legends and realised a lot of them had no jobs, or they only did breaking, and they were still struggling to make a living. Is this what I want to be? It's the same with skaters and surfers. They don't get paid a lot unless you get a massive sponsorship. The best b-boys might only get paid 70 grand a year. That's not a lot. So that pushed me in the direction of having my own business and learning about business. I didn't want to be 60 years old doing workshops for $200 an hour, travelling around the world just to make ends meet, essentially selling your service, your dance, your body to make money. And how long can you do that? If you're injured, you can't travel, you can't compete, you can't make money.

Kane: Would there be a lot of injuries in that?

Eddie: I'm lucky, I never got injured badly. You get sore here and there, but I've seen people break bones and tear stuff. It's an intense sport.

Kane: I've seen some of your videos recently. That does look dangerous.

Eddie: Once you know it, it's fun. We just throw our bodies around, flipping around, because when you're a kid you don't care. That's why if you want to learn something extreme, do it when you're young, because you have no sense of fear. Now I'm like, oh, I'm not going to do that.

[15:36] How he saved the money to open the first store

Kane: So how did you save up your money when you first started the shop in 2013?

Eddie: I was putting money aside, and I had some shares in my dad's mining company as well, so we cashed that in. I'd been hanging on to the shares, so I liquidated them and used that 300 grand to open the shop. Either put it into a house deposit, pay off half the mortgage, or open the shop. I thought in the long run the shop would give me more cash flow. But it ended up being money spent on learning about the industry, and accidentally falling into high fashion, luxury fashion.

[16:14] Losing Nike and New Balance before opening

Kane: Because that's not something you wanted to get into, was it?

Eddie: No. Initially I just wanted a sneaker store. The products I was going to sell in shop one were literally basic sneakers and jeans and some Japanese brands, because I loved the Japanese brands at the time and there was nothing like that in Perth. I'd be bringing something quite rare to the market. But I remember getting a phone call from a friend who worked at New Balance. "Eddie, I've got bad news for you." All I'd been doing before I opened the shop was emailing Nike, Adidas, Puma, New Balance, ASICS. Puma was the first to say yes, "We'd love to stock you." Adidas said yes too. New Balance was the big one at the time, because everyone wanted New Balance. New Balance and Nike were the two biggest, and Nike had obviously said no. I was like, I can't get Nike, I can't get New Balance. How can I be a true sneaker store without these brands?

I was so close to shutting it all down. The fit-out construction had already started, and in my head it's not going to work because I don't have these two brands. That's what led to phase two, luxury fashion. It kind of forced me there. When my friend from New Balance called, he said, "Eddie, I can't stock you. There's a store around the corner from you that's been stocking us for the last decade, and they're not going to be happy if we stock you in the same location. Usually you have to be far apart." It's just a lot of politics. At the end of the day, they'd been there before us.

[18:02] Deciding to go all in anyway

Eddie: So do I pull the plug, cancel everything, lose a lot of money and start something else, or just go all in? I decided to go all in. Open the shop, no expectations, let's see how this goes and build it up. In my head I'm thinking, I just burnt 300 grand, this had better work. Then I started travelling to Japan, picking up more designer brands, and then I started doing Paris. That's what changed the whole concept. That's when I learned a lot more about the fashion industry. A lot of it was self-taught, basically.

[18:36] The stores he wanted Cabinet Noir to become

Kane: I think you mentioned before that when you started the shop you didn't really have any experience in the industry. You obviously knew the brands and the style you wanted to go for. Did you always plan to make your own brand?

Eddie: I wanted to make my own, but that wasn't on the cards at the start. I just wanted to carry the best brands. I had a few stores in mind. End Clothing was the store I looked up to. They made millions online, and my blueprint was set: one day I want to be like End Clothing. There were other stores around the world I looked up to as well, like Colette in Paris and Kith. These were the top stores I always envisioned us becoming, so I'd spend every day looking at what brands they carried.

[19:24] Cold emails and the Comme des Garçons reply

Eddie: I'd go, "How do I get these brands?" Literally cold emailing them. "Hey, my name's Edward, I own this store in Perth, Australia, would you...?" And I got radio silence, except from one brand. I got an email back, and it was Comme des Garçons. If you don't know who that is, Comme des Garçons is the biggest Japanese brand, one of the most influential brands in the world.

Kane: Really?

Eddie: Rei Kawakubo, legend. I've got a Comme des Garçons tattoo here. She's the GOAT of fashion. A Japanese fashion designer, and the name Comme des Garçons is French, which kind of suits what we do, because our name Cabinet Noir is also French. So I looked up to Comme des Garçons a lot.

[20:08] Flying to Paris Fashion Week with zero experience

Eddie: So I got that email and I'm like, holy moly. They said, "We'd love to see you in Paris." I booked a ticket to Paris, went to fashion week with no experience. I didn't know what to do, and I didn't know what the process was to get the brand. I literally went to the showroom and thought, what is this, and what do I do? I met with the sales rep, and in my head I'm still pitching the idea of stocking Comme des Garçons in our shop. I didn't realise they'd already said yes. I was doing a whole pitch, "This is my shop, we carry this brand," and they're like, "Yeah, cool. Do you want to make your selection?" And in my head, what do you mean, make my selection?

[20:48] What it actually means to "buy" at fashion week

Eddie: Again, I had no idea how this stuff works. The way it works is you go to the showroom, you look at the collection, and you place your order there. The collection is the samples scattered around the showroom. You go, "I like this product, I like this product," you make your order, submit it, and you get it six months later. That's how it works.

Kane: So there's no more process? You're there to make your order?

Eddie: Correct. That's why it's called buying. There's a role called fashion buyer, and we go to Paris Fashion Week, to what we call "market". Are you going to market? Meaning, are you going to check out all the showrooms? It's like how a chef goes to the market to pick up fresh produce. Same thing for fashion buyers. We go to Paris Fashion Week or Milan Fashion Week to pick up the fresh produce, which is the brands. I look at the collection, which is basically the ingredients, and make a selection for next year or next season. What you're selecting now is for the following season.

[21:52] Indent orders, 30% deposits and customs costs

Eddie: This is also the key to why a lot of fashion businesses fail, because it's what we call an indent order. You have to predict what's going to sell six months later. I remember at my peak I was spending 600 grand on indent orders, and you're just banking on it working.

Kane: You have to pay up front?

Eddie: You pay a 30% deposit. The brands are safe because the deposit covers their production. When production's done, you pay the other 70%, and then you pay shipping and freight. That's a big thing for us living in Australia, because all the brands we carried are from the northern hemisphere. Say you're buying 50 grand of stock from a brand. You've paid that 50 grand, you don't have the products, you haven't sold anything yet. Then it lands and you get a call from customs: "Hey, you've got 50 grand worth of products here." You have to pay about 8 to 10 grand to clear product you haven't even sold yet.

[23:01] Why 50% margin can still be a business killer

Eddie: That's just to clear it. Once you clear it, you have what we call a liquidation period: how quickly can we sell that 50 grand of product? This is why, now we're in store three, our business model has completely changed. If you think about that 50 grand, we're only making about 50 or 60 grand profit on it, so you're only doubling it.

Kane: Mm-hmm.

Eddie: Then minus the tax, GST and customs, and you have to pay for marketing, Facebook ads and all that. Your 50% margin gets less and less by the time you've paid your wages, your rent, your super, the ATO, whatever. You're making zero profit. So a 50% margin for retailers is a business killer.

Kane: And I assume when you're reselling other people's products, you're locked into what you can sell them for. They have no risk, because that's your problem now.

Eddie: Exactly. You can't just make up the price. You have to sell at a certain recommended retail price, because customers will ask why they're paying more, and the stores in Europe are selling it cheaper and we can't compete with their price.

Kane: And that's because they're closer and don't have to pay the freight.

Eddie: They're closer. They don't have to ship it all the way here.

[24:41] Why Comme des Garçons said yes

Kane: Going back to when they were the only ones who emailed you back. Why do you think they replied, if they're such a high-end brand?

Eddie: I think it was because of the store fit-out. When I did the presentation, I took photos of the store, and they loved what it looked like. "This looks really cool. We've never seen anything like this in Australia." We were the first store to really push the luxury brands into the Australian market. Since then our name has been synonymous with luxury brands, from 2013.

[25:16] How other stores copied the Cabinet Noir blueprint

Eddie: After that, a lot of stores started to implement our blueprint. I started to realise, wait a minute, a lot of stores from around Australia are starting to come to Paris, because the owners used to ask how we got these big brands. Even now, I look at the stores that are killing it right now and they've basically got a copy of the Cabinet Noir blueprint. The brands are exactly the same as what we used to carry. They were trying to emulate what we were doing, but we were the first, in 2013, 2014. And it all happened because we couldn't get the footwear. Initially I just wanted to sell Nike and New Balance, and that pushed me all the way to Paris Fashion Week to get designers like Comme des Garçons.

[25:58] Getting Off-White through a conversation at a bar

Eddie: That opened a lot of new doors to other luxury designer brands. Off-White jumped on board, and that was a big one for us. Off-White just blew up, because Kanye was really pushing it with the whole Yeezy thing, and everyone was asking, "How did you get Off-White?" I'm like, bro, literally, I went to Paris and had a drink at the bar of a cafe. I love tequila, and I basically bought all the tequila in the whole cafe and ended up drinking with a bunch of Italians who happened to work for Off-White. "What do you do, man?" "I have a shop." "You should come to our showroom." Then I met other people at different showrooms. That's how you network, and that's when I started to understand how the fashion industry works. It's all about networking and word of mouth. "You need to meet that person from that brand, this person from that showroom." I've been doing it for 10 years, and now if I go to Paris, everyone knows who I am. But initially I didn't know anyone. It was just through meeting people randomly.

[27:02] Turning down a corporate buyout offer

Kane: With other shops using your blueprint, does that annoy you, or does it make you feel good that you set it up?

Eddie: It kind of annoys me, because some of them exited and got four or five million out of it, and I'm like, that could have been me. I remember a group of what I call sharks, in suits, from a big corporation, came into the store one time. Again, I was young and naive. I didn't want to sell the company. I didn't have any exit strategy. In my head, this company is my baby forever. No business mind. I was just living the dream. They came in and said, "We want to make this a franchise. What can we do?" And I was just not interested. Looking back, I'm like, what an idiot. I could have sold for four or five million dollars and started again. I could have started five more of these.

Kane: Were they from America?

Eddie: They're from here. They create the big chain stores, General Pants kind of stores.

Kane: Big investment.

Eddie: Big investment. I didn't even get to the next conversation. I just shut the door in their face, which was stupid, looking back.

Kane: Do you think it was, though? Because when that happens you obviously lose control, and that could have affected you making your own brand.

Eddie: Everything happens for a reason. It's such a cliché thing to say, but it does. If you have a strong vision of what you want, and I'm a big believer in the law of attraction and manifesting, the universe is going to get you there, but not the way you want. You think, I'm going to go this way to get there, and the universe goes, no, no, no, that's what you think, but I'm going to take you a different route. And then you look back and go, oh, I did that. Because there was a checklist of things I wanted. I wanted Nike and Jordan. And by the way, I did end up getting the Nike account, the Jordan account, and the New Balance account.

Kane: You got every account after they saw you.

[28:49] Losing almost half a million dollars on dead stock

Eddie: This was years after. And then the business relationship fell apart, because the things I thought were going to give me a lot of money actually ended up almost driving me bankrupt. Like Nike and Adidas. Not Puma, Puma's still great. I even had a legal battle with Adidas during COVID, and a lot of other things. I've spoken about it on my TikTok as well. I lost almost half a million dollars on what we call dead stock. For example, every sneaker store wanted to get Jordans and Yeezys, the bestselling products. You drop 100 pairs of Yeezys and that's 35 grand in a day. Easy money. Same with Jordans. Boom, 50 pairs, 100 pairs, 30 grand a day, which is a good day.

[29:47] Why brands force you to buy stock you don't want

Eddie: But to get that, Nike or Adidas would say, "If you want Yeezys, you need to buy this." They'd label it as top-tier stuff, but it was just generic product, a bit more elevated.

Kane: As in a type of product, or an amount of product?

Eddie: Type of product and amount. They'd say, "You need to buy this, this, this and this," and they'd tell you your allocated pairs. "You have to buy 50 pairs per SKU." Per SKU is per style of product. And I go, "Wait, so I have to buy these?" "Yeah, if you want the Yeezys, you need to buy these."

Kane: Really?

Eddie: So they become dead stock. I can't clear it, because everyone just wants the Yeezys.

Kane: Can you just not buy them?

Eddie: "Oh no, if you want Yeezys, you need to buy this."

Kane: And I suppose the second thing just isn't a Yeezy. It's a different product.

Eddie: Yeah, and no one wants it. It's just generic stuff that's been elevated, and no one wants to pay 300 bucks for it. They're just waiting to buy the Yeezys. So I ended up losing a lot of money, hundreds of thousands of dollars on products I didn't want to sell. But in my head, if I have the Yeezys, that's okay, because your store becomes cool and your status goes up. It's just a lot of politics. Then as soon as I let go of the sneakers, I let go of Off-White and a lot of the luxury designer brands. That was phase two, store two, the Raine Square store, when I was clearing a lot of these brands out.

[31:19] Liquidation rates and why luxury stores went under

Kane: Did other brands have a similar plan, where you had to buy other products? Like Off-White? Did you say you dropped Off-White?

Eddie: I dropped Off-White as well. And a lot of stores went bankrupt because of these brands, because they couldn't pay them back. As a luxury store, like I said, you buy 50 grand and make 50 or 60 grand profit, but only if you sell all 50 grand worth of product. There's what we call the liquidation period, meaning how much have you sold before you reduce it on sale. Put our own brand in perspective: our brand has about a 90 to 98% liquidation rate before sale. Meaning Cabinet Noir sells so well that I don't have to put it on sale, unless it's odd sizes here and there, then I clear them. That's a healthy percentage. A good brand will have about 70 to 80% liquidation before sale.

Then we look at after sale. If there's still leftover stock after we've reduced it by 30 or 40%, that means the brand isn't desirable. When you're selling stuff at 50% off, you're just making your money back. If you're selling products at 70 or 80% off, I'm paying you to get rid of the brand. "Hey, here's 50 bucks, can you take this product for me?" When you flip it that way, you're losing a lot of money if you're reducing everything 50 to 70%. And that's happening everywhere with luxury brands, because you can just get luxury goods at a discounted price online. No one wants to come to the shop anymore to buy certain luxury goods. That's when we shifted into our own brand, the Cabinet Noir brand. That's when we entered phase three.

[33:06] How Farfetch's model squeezed retailers

Kane: I know an online shop called Farfetch. They obviously sell all the luxury brands.

Eddie: The way Farfetch works, and people don't know much about this, is that Farfetch contacts stores like us: "We want to sell your luxury goods." When Farfetch puts stuff on their website, the product is actually sourced from all different stores, not from one warehouse. They're basically taking stock from every store like us. "Oh, this Stone Island piece, I'll take that from Cabinet Noir." And then they take a 30% commission, kind of like Uber Eats. I'm already only making 50%, so if they take 30%, I'm only making 20% profit, and only on the bestselling stuff Farfetch can sell. Not everything sells on Farfetch. So Farfetch also drove a lot of businesses down.

Kane: Yeah.

Eddie: And they went down themselves, because it's not sustainable as an online store when you keep discounting stuff.

Kane: So is that kind of like drop shipping? They're not holding the stock?

Eddie: They'd hold a little bit, but most of the stock is held by all the other stores. I don't know if Farfetch still exists now. Maybe it does and they've changed their business model, but a lot of stores collapsed. I know they got bought by a different company, and there's been a lot of restructuring. Three times they've been restructured. So I don't know where it's at now.

[34:32] Shifting to Cabinet Noir's own brand

Kane: So with Cabinet 3.0, your main goal is to make your own products and sell those, with the other brands as secondary?

Eddie: Yes. It's gone back to my original blueprint, which is selling our own products. I speak about this as well. If you go to a high-end, fine-dining restaurant, they serve caviar and wagyu. Caviar and wagyu don't make money. They're probably losing money on them. You're paying a little bit to cover the cost of the caviar. The stuff that makes money is your alcohol, the wine. That's why restaurants do wine pairing. And your basic meals, like the gourmet burgers and the steaks, have a bit more margin. We see our brand as the wine pairing. People can't afford a $400 t-shirt, but they can afford a $120 Cabinet Noir t-shirt. So that becomes the driver.

What I'm realising now is that fewer and fewer people want caviar. They just want the bread and butter, which is our brand. So let's make more of that, because it gives us more profit, it sells through a lot quicker, and there's a big following for the brand now. Now that I've taken control of the design and production of the brand, I can make things a lot quicker.

[35:55] Taking back control of design and production

Kane: Was there a time when you didn't have control?

Eddie: I had a team I was trying to delegate to. We had an agreement with another brand we're friends with. They said, "We want to help you guys curate Cabinet Noir as well," and we were on the same path, but the way they work is different to the way I work. They like to work at night, I like to work in the morning. When I was trying to make changes, it was a lot slower to get stuff done, and I need to get stuff done now. There are deadlines. If I don't release jackets before winter, we miss the window. Some jackets arrived when it was already the end of winter. So I like to make things quickly and on the spot, because production takes a while from the design point.

[36:41] Why five to six week lead times are the biggest constraint

Kane: How long does it take to get into your shop?

Eddie: After I finish the design, I submit it to the factory. It takes them two to three weeks to sample and three to four weeks to produce. By the time it lands it's usually five or six weeks, give or take.

Kane: And is that the same for factories everywhere?

Eddie: Yeah, it's common practice. They always have a 30 to 40 day production lead time, and obviously there are delays here and there. That's the biggest issue for a smaller brand, meeting those deadlines. Bigger brands with bigger capital go, "All right, I've got 500 grand. Let's put it all into production," and everything comes out at once.

Kane: Mm-hmm.

[37:26] Why activewear brands can run 70-80% margins

Eddie: That's why e-commerce brands and activewear brands are killing it right now, because their margins are a lot higher. They do 70 to 80% margins, which is insane.

Kane: How so?

Eddie: An activewear top will probably cost about four or five bucks to make, and they sell it for 60 bucks.

Kane: That's almost 90%, because they're ordering in such high bulk.

Eddie: High bulk, and it's also a cheap product to make. For example, this shirt probably cost me 50 bucks to make, maybe 70 by the time it lands, and I sell it for around 200, because the markup has to make sense. There's a margin we have to abide by.

[38:12] Why customers don't see the real cost of things

Eddie: But people now don't care how much things cost. Everyone thinks they know what it costs.

Kane: That's the thing that annoys me, especially in the trades. A lot of customers don't really understand the cost and why things cost so much, because there's a big overhead. It annoys me when I see those videos like, "I can cook this steak at home for 30 bucks, and look what they charge." These restaurants have to make money.

Eddie: You're in Karrinyup Shopping Centre, you've got the best view, you're in the food court, so that costs a lot of money. We're paying per square metre. Even the amount of product we display has to make sense.

[38:45] Merchandising a shopping centre vs a gallery store

Eddie: The way we display stuff at Karrinyup now is different to when we were in the city, which was more of a gallery showroom style. I'd only have one product per style on one hanger, but now I have three of the same style hanging so people can see different sizes. Because the mindset of shopping in a shopping centre is different. If you go to Louis Vuitton, they only have one product of each SKU hanging. They don't have multiple sizes out.

Kane: So why would that be?

Eddie: Because it looks more luxurious. It's a different mindset of shopping. In a shopping centre, people are trained to think the stock should be out there and available. If it's not hanging, they just assume it's not available. It's the supermarket thing: it's not on the shelf, so it's not available, and they won't even ask the salesperson. So I only like to put two out, but then I have to make sure I tell people, "I've got more sizes at the back if you need them." And even then, they assume you don't have their size. I'm like, what do you mean? You never asked.

[39:59] Training staff to actually engage customers

Kane: That's tricky, because if they don't ask, and you don't have enough staff to talk to every person in there at the same time...

Eddie: That's why I train myself to make sure I engage, and make sure people feel welcome. We don't give them a sales pitch like, "Hey, how are you doing? How can I help?", which is a closed question. I trained myself to ask open-ended questions. "How's your day? What are you looking for? What brought you here? I like your shoes. Have you seen this?" I just open a conversation, and that breaks down the barrier, the defence of "don't talk to me". Instead it's, "Oh, this guy's nice, I'm going to open up to him more." And before you know it, it's, "I'm looking for something for a wedding," and that's my opportunity to style the person and help them out, because that's what I like doing. I want everyone who comes in to walk out feeling like they just got the full service and feel special. That's what makes us different. I always tell everyone our customer service is probably our number one product in the store. The other stuff is what allows us to give good service.

Kane: Yeah, it's uncommon. There are a lot of shops that hire young people to keep costs down, and they just don't have a high level of customer service.

Eddie: They don't have the motivation that I have. They're not interested in helping out. They're like, "Oh, it's 5 o'clock, I've got to leave," or, "I've got to go find a size out the back." That's why it's hard to find good staff. I don't have a big rate of turnover, because I like to keep the same team. If they grow and want to do their own thing afterwards, great, but I want them to leave of their own will, when they feel like they want to expand and learn more. Then I let them fly. But I've got a great team now.

Kane: And how many are in your team?

Eddie: We've got five or six now. We're expanding into more social media and video, with subcontractors we're slowly incorporating into the team.

[41:59] Why networking matters more than ever on TikTok

Kane: On that, you do a bit of your own social media and TikTok, and you mentioned earlier the importance of networking, and that's how you managed to get these high-end brands into your shop. How important do you see networking?

Eddie: I think it's so important, especially now on TikTok. I've started posting on TikTok more regularly, three to four videos. I saw a video this morning saying you need to post 30 videos a day. I'm like, what? 30 videos a day? I have no time for that. So now I treat TikTok as work. It's compulsory. Every morning I make one video. If you don't know what to say, just say the first thing that comes into your head, 10, 20, 30 seconds, and post. Keep the algorithm happy. Think of the algorithm like a little Tamagotchi. You have to feed it, and then it's hungry again, so feed it. Yesterday I posted four videos and got 10 new followers. Every video you post, you get a follower or two, and then your mindset changes.

And for you, you've got a great platform here. You can make 100 videos from every podcast and just feed them into the algorithm. That opens up a lot of conversations with other business owners. "I watched your video on TikTok, do you want to collaborate?" Again, that's networking. For me, I love meeting new people. Networking is second nature to me. It's really easy for me to talk to people, and they seem to want to be part of the Cabinet Noir journey. We do a lot of collaborations and stuff like that.

[43:45] Wearing Cabinet Noir outside of Perth

Kane: That's what I was getting at with the networking, and with you having your own brand. Even you calling it the bread and butter, it sounds like you're underselling it in a way, because in the trades, when we say bread and butter, it's the boring, repetitive, cheaper work. I think what you're doing is so cool because you're here in Perth. For the Perth community, I'm wearing the jumper now, people know the brand.

Eddie: The thing I take the most pride in is when people wear Cabinet Noir outside of Perth. My friend just went to Canada and all he wore was Cabinet Noir, because I've converted him. He's like, "Man, your stuff is so good. Every time I wear it out I get compliments." I love hearing that. He said some girls asked for his number and complimented his jumper, and he actually lost one of his jumpers because a girl stole it. I love stories like that. Or I've met someone in New York or Paris and said, "I love your shirt," and we find out we're both from Perth, or we both know so-and-so. It's a conversation starter. I've created such a niche brand that it's not everywhere. You don't go up to someone wearing Nike and ask, "Hey, do you know Ed?" But if someone's wearing Cabinet Noir, it's, "Hey, do you know so-and-so? Are you from Perth?" and they make a direct link somehow. I love that.

[45:24] Why selling too much can make a brand less cool

Kane: I saw you mention something the other day in one of your videos about Represent. They seem huge now, but they've lost that thing a little bit.

Eddie: I like to quote the owner of Nude Project. He said it best, and when I watched him say it I was like, that is so true. "Fashion is the only industry where you get penalised for selling a lot." The more products you sell, the more uncool you become. The more mainstream you become. And Simon Beard from Culture Kings talked about it in one of his videos: do you want to be a cool brand, or do you want to be a Lamborghini-and-yacht brand? Meaning, do you want to be cool, or do you just want to sell a bunch of products and make money? I'm at that stage where I'm like, I want to be cool and have the Lamborghini. Can we do both?

It's a balance. With Represent, once you hit a certain number, you start hiring CEOs and CFOs, you've got shareholders, board meetings. How do I hit this milestone and this target? And you lose the love for product. I love creating product. This sample shirt I'm wearing, I've already got about 50 people wanting to buy it, and I haven't released it because I'm still trying to perfect it. I could easily make this everywhere, but if I make a thousand of these and everyone wears it, no one's going to want to wear it anymore. It's not cool anymore.

If you see someone wearing the same thing as you, it's the worst feeling, because I make garments that are standout pieces. You go out and people go, "Oh my god, that's nice." But then you see 20 people wearing it. "Are you guys in the same band or the same company?" So I have to find that balance. Do I make 10,000 of these or only 100? I posted about this the other day on my social media, and a friend replied, "Don't worry, wait until you hit Nude Project money," which is a hundred-and-something million dollars, "then you can start worrying about being cool." But I'm already seeing it. I don't want the brand to be everywhere in Perth. Even 100 units is a lot to me. I don't want to see 100 people in Perth wearing the same product.

[47:45] Keeping production runs deliberately small

Kane: How many are you making at the moment?

Eddie: It depends. If it's a real statement piece, I'm making 50, which isn't a lot, considering the time I put into one garment. So there's not a lot of money in it, which means I have to come up with different designs more often. There's not a lot of repetition, it's just more work, because I don't want it to be everywhere. Do I want to be McDonald's or a Michelin-star restaurant? A Michelin-star restaurant only seats 10 or 20 people, maybe 30 or 40 at the most, so there's a cap on the money they can make. Or you can be McDonald's with drive-throughs, which is like online. If you picture a pyramid, at the top is Louis Vuitton and all the luxury brands, a small number of people. At the bottom you've got McDonald's and fast fashion. I want to be somewhere in between.

[48:40] 15 trades, 140 staff and losing touch at Smartfix

Kane: It's a hard one, because it makes me think of Smartfix and how we've been running for so long. Like I said to you before, we had 15 different trades and 140 staff. You lose control. You've got managers managing managers managing guys on the road, and you lose touch because there are so many touch points. You can't physically do it all. A lot of big podcasts I've been watching recently talk about being niche and having a hyper-focus on one thing, or a smaller team. Daniel Priestley talks about 12 to 16 staff being the ultimate, because you can still have control over most things and still make more than enough money without being completely stressed out all the time.

[49:18] Learning from Japanese brands' slow-growth philosophy

Eddie: Yeah. The challenge is increasing profitability while also scaling. But do you want to? I remember having a meeting with a Japanese company called NEIGHBORHOOD, which is one of my favourite brands. Japanese companies think long term. American companies think short term. They want to see a constant bull run. With the Japanese, I remember sitting in a meeting and they said, "Edward, we don't like this." We were talking about hype products. "Your brand's been really good, you've been selling well, but we don't like this. We like this." Consistent, slow growth.

So when I talk to Japanese brands, it's different to, for example, Represent. The reason we discontinued Represent was when they said to me, "Eddie, we're up 800%." I've seen this before. Off-White went from having 100 stockists worldwide to a thousand stockists worldwide in one season, which is crazy. I'm like, that's a recipe for disaster. That's a recipe for diluting the brand. So that's when I said, all right, I think we're no longer on the same path, and I discontinued them.

Then I remember going to NEIGHBORHOOD, and another brand called Doublet, which is one of my favourite Japanese designer brands. They're still doing Paris Fashion Week. He told me, "Eddie, we only allow three new accounts every season." That's two seasons a year, so six new stores a year. "Yes, we like to keep production very controlled. We don't want this, we want this." They're thinking long term. So I processed that and implemented it into what we do. That's why we've been around for 12, 13 years. We went up with the shoes and the high-end brands, and now we've gone back to keeping the numbers low and keeping the staffing low. Keep it tight, like what you're doing. The bigger the company grows, the more food you need to feed the giant.

[51:34] Two stores and a cafe: double the stress

Kane: And do you think it's less stressful in the position you're in now? Because you had two stores and a cafe at one point.

Eddie: That was stressful enough for me. I had two stores at the same time, the city one and the Karrinyup one. I kept the city one open for a bit, and then I said no more, because I wasn't making double the money. I was just injecting more into one store. It was double the stress. One's making money while the other isn't, and then it flips. I'm like, man, what am I doing? Then I shut that one, and now the money only comes to this store, which is great. Just focus on the one.

[52:06] The $30 million number

Kane: So where do you see yourself going from here? I saw in your Instagram bio you had 30 million.

Eddie: Yeah, 30 mil is the sweet number I want, either my revenue or my exit price. If someone comes in with 3 million, that's a bit short, I can keep doing this. But if someone came in with 30 mil, great, I'll take that money.

Kane: What would you do with it?

Eddie: I'd put maybe 10 million into an S&P index fund and just keep that growing, let the dividends pay for my lifestyle, and then start investing, maybe opening businesses everywhere. With 20 million you can open 20 businesses. You need money to make money. That saying is so true. I think that 10 million would be enough. I calculated my spending for the year to live a free, luxury life, and it's about 100 grand of spending, and that's me struggling to find things to buy. I'm not a big spender anyway. I spend money on travelling and food. I don't like buying luxury stuff that depreciates. I don't buy cars, I don't buy watches. I buy clothing, and clothing's not that expensive. It's more about experiences.

Kane: That's reasonable, if you own your own house and stuff like that. And with 10 million in shares, you're getting dividends.

Eddie: You're getting dividends. That's more than 200k anyway. So yeah, 30 mil is the sweet spot, I think.

[53:44] Turning down $20K from Jon Jones

Kane: So tell me about Jon Jones coming through your store. What was that like?

Eddie: Jon "Bones" Jones. I remember getting a DM from his manager. We get a lot of DMs from so-called managers, and sometimes you go, ah, this doesn't look real. But this one seemed legit. "Hey, Jon Jones has heard about your store and the brand." Initially they wanted to do a collab for his appearance.

Kane: What does that mean?

Eddie: Collaboration meaning I'd make the merchandise for Jon Jones. I did the first sketch and he was so happy with it. It would have been Cabinet Noir x Jon Jones collaboration t-shirts or something like that. But then he wanted 20 grand up front. I looked at the numbers and thought, I'm not even making 20 grand profit from this t-shirt. He's winning, but I'm not.

Kane: Yeah, it's cool to have, though.

Eddie: So I said, look, it's not going to work out. For me, I didn't see the value in it. I know other companies like Culture Kings would definitely do it. I know they pay 20 grand per celebrity to come in and do a DJ set or a meet and greet, because they can afford it. They make a lot of money. But for me, 20 grand, I can put back into stock and make more money out of that.

But he ended up coming to the store anyway, and he was really funny. He picked up a Cabinet Noir t-shirt and said, "Man, I love this t-shirt." I said, "Champ, that's yours. My gift." Then he said, "You've got to come to my thing," and I ended up going to his signing parties and doing tequila shots with him, which was really cool. Out of all the celebrities I've met, he's the one with no aura. It's weird, because I've met Israel Adesanya and people like that, and Izzy has a rockstar aura. But Jon Jones has zero aura. He's just one of us. He's the most dangerous man in the world, he could take me out any time, but he's so chill and so humble. Really funny. Then we ended up seeing him again, and after that he toured all around Australia.

Kane: Was that during one of the UFC events here?

Eddie: Yeah, that was a couple of years ago maybe. It was really cool.

[56:02] Dressing Machine Gun Kelly on stage

Kane: What about Machine Gun Kelly wearing your gear on stage?

Eddie: The Machine Gun Kelly one was interesting. My mate said, "Are you going to Machine Gun Kelly's show?" I didn't even know he was coming, so I got a ticket. "Do you want me to give him some stuff? I'm seeing his crew." I said, look, I don't like giving stuff out to celebrities, because most likely they end up giving it away, throwing it in the bin, or giving it to their entourage. You never know. But all right, I picked out a few things he might like. A pink t-shirt, because I know he likes colours, and a tank top. And I remember watching the show, he came out in a jacket, then slowly unzipped it, and I go, wait, that looks like the pink t-shirt, the Cabinet Noir one. Boom. He was rocking it. He actually wore it, which was really cool. We were over the moon. He wore it when he played in Perth, and that was the first show in Australia, the first leg of the tour.

That meant he got a lot of press from that first show. All the press, Vogue Italia, everything, the first images you saw were of the Cabinet Noir t-shirt. Then he did an outfit change, and the second outfit was the tank top I gave him. He ended up taking it with him and recorded a music video in it, and it's now on the album cover with Wiz Khalifa. So check out the MGK and Wiz Khalifa album cover. He's wearing the Cabinet Noir tank top from his second outfit, which is crazy.

Kane: That's cool. Free publicity.

Eddie: It is.

Kane: Are there rules around being able to use the pictures they've put online?

Eddie: I screenshot it and frame it somewhere. They're not going to come after me for that. It's their photos and their IP, really. But there are so many celebrities who've worn our stuff that I've never seen. Jay-Z bought our stuff and wore it around, apparently. I never saw it. That's a big one.

[58:10] Nearly missing a call from French Montana

Eddie: Another big one was French Montana in Miami, wearing a Cabinet Noir shirt. I just got a tag one day: "Hey man, French Montana is wearing Cabinet Noir." I'm like, how did he get Cabinet Noir? His stylist must have bought it from us or our agency, put it on him, and he loved it. And I remember the day, because I got a FaceTime request from the manager while I was in the middle of a date. I said, "I can't answer this, but are you good? What's up?" "French Montana wants to talk to you." I'm like, do I cut this date off and talk to French? I said, "Look, I'm in the middle of a date right now." I said no to business. Looking back, I should have taken that call.

Kane: Do you wish you'd taken the call?

Eddie: Not really. I don't get fazed by celebrities. Unless it's Kid Cudi or something, my favourite, coming to the store. Or Blink-182. That'd be cool.

[59:19] Keeping your circle tight

Kane: With networking, it's about having the right people in your circle, as opposed to letting anyone in who might try to take you for a ride. What's your opinion on that? How do you keep your circle small?

Eddie: Your network is your net worth, really. I'm blessed to be surrounded by successful people, millionaires and billionaires, and being around those people inspires me to keep going. It also helps with imposter syndrome. In my head I'd think, I don't belong here. But the more I hang out with them, the more I get invited to these events, and I realise, you know what, I do belong here. They want my presence, they want to pick my brain. I get billionaires and millionaires asking, "How did you get into this?" And in my head I'm thinking, what do I know that they don't? But they find what I do really interesting, because fashion is such a niche thing and the industry is so small.

So now I'm starting to value that a bit more. I used to give free advice to kids who wanted to get into fashion, but now it's, if you want to learn this, you have to earn it, or you can pay for my service, brand consulting, whatever. I'm valuing myself a bit more. And I'm keeping it tight, because a lot of people try to use you. People say it's a dog-eat-dog world. To me it's more like a little monkey hopping onto a bigger monkey's back, then hopping onto the biggest monkey's back. Everyone's trying to use each other to climb the ladder. They want to get to me to get to my network, to meet so-and-so, to get this brand, to get this deal. So now I don't say yes as much. I have to be a bit more selfish.

Back then I was like, all right, I want to support everyone, support your friends. But a lot of these so-called friends don't support you back. I'm sure you've done that too. You support your friends and they never support you. I've supported so many of my friends and not once have they bought a t-shirt. I've supported your brand and your business since day one, but you've never even bought a t-shirt or a jumper. And if they do, they always ask for a massive discount. My best friend and I always say to each other, good friends never ask for a discount. The only place I'd pay full price is at my best friend's place. I'd ask for a discount from people I'm not as close to. So why is your best friend asking for a discount? I don't understand it. And then they go to Louis Vuitton and pay full price anyway. Bro, where's the logic? You'd rather pay full price to a big corporation than pay full price at your friend's business? I think a lot of business owners need to realise that. See who your true friends are.

Kane: So true.

[1:02:25] Stress tolerance as a sign of future success

Kane: We touched on it before, with the stress of the curve going to the sky versus being more consistent. You've talked before about stress tolerance being a direct indicator of future success. What do you mean by that?

Eddie: To me, stress is so good for you. When you go to the gym and push through that barrier, runners know it, people doing Hyrox or CrossFit understand that kind of pain tolerance. People who don't know how to cope with that, the ones who want an easier life, end up doing a 9-to-5 job because there's no stress. They come to work, do their job and leave. As a business owner, you get bombarded with invoices, ATO debt letters, this and this, and that gives you a lot of stress.

Kane: Do you think there's any form of balance?

Eddie: For me, I know my worth. That's why a lot of millionaires can bounce back after they go bankrupt. I love reciting Jim Rohn. He's probably my favourite self-help guy ever, Tony Robbins' mentor. He said if you took all the money in the world and spread it out evenly so everyone had the same amount, in a short amount of time it would go back to the way it was. Meaning if you're broke and you get a lot of money, you'll end up broke because you don't know how to handle it. But if you're already a millionaire, you can make it back again, because you know your worth. If I go broke tomorrow, I'll do something else and go back up again.

Kane: When you say know your worth, is that because you know how to do it, because you've done it before?

Eddie: I've learned a lot. The last 12 years were an expensive learning curve. There's a lot I wish I'd done differently. I was so stressed back then because I didn't have enough tools. When people are stressed, it's because they don't know what the future holds. I might go bankrupt. But bankruptcy isn't a bad thing. A lot of my friends went bankrupt and they're making millions of dollars now. Most of my most successful friends went bankrupt at some point. Look at Elon Musk.

[1:04:50] Hitting rock bottom and resetting the brand

Kane: Is that because of the learning curve they went through?

Eddie: Yeah. You have to hit rock bottom. How do you know what rock bottom is without touching it? If you think you're hitting rock bottom, you don't know until you're there. I've been close. I could see the bottom, and I thought, it's time to sort this out. If I hadn't made drastic changes, getting rid of the luxury brands, the business would have gone under. And getting rid of them was basically getting rid of my identity, because it took me 10 years to become the number one store in Australia carrying luxury designer goods. That was a big title to have. And then to reset and say, "We're just an independent brand from Perth," which actually made us more money. I'm getting 70 to 80% margin on the brand instead of 40 to 50% on luxury designer goods, which I couldn't even sell through completely. And I've got a big, loyal following for my brand, loyal fans, loyal customers. It was just a reset of identity.

[1:06:03] Why brand loyalty beats product loyalty

Kane: So with selling the luxury brands, you can't really build a community or culture around it, because it's not yours anyway. People don't have that emotional attachment to it.

Eddie: It used to be, "Hey man, this is Kenzo, this is Stone Island," and people would buy it and feel good. But we're in a different era of shopping habits now. Look at the activewear brands. You're not buying the activewear product, you're buying into the brand. They've got followers, they've got loyal fans. These girls want to be like the founder. It's not about what they're wearing, it's the logo. It's like which team are you on, team red or team blue, whatever the genre is.

Kane: Do you think that's come from personal branding?

Eddie: Correct. And you have to have a good enough personality for people to follow. People go, one day I want to be like that person.

Kane: As in, people following the founders.

Eddie: Right. They've created a whole cult-brand society now. It's almost a cult.

Kane: Why do you think that is?

Eddie: It's a sense of belonging. Again, if you wear Cabinet Noir, a lot of my friends feel good because now they're part of our crew. "You're part of our crew." I feel like I belong now. I feel good.

[1:07:40] Gen Z and the shift to group identity

Kane: I wonder if it's on the back of the whole loneliness epidemic. The human connection we've lost, with AI and everyone behind a screen. No one goes out anymore. I wonder if part of it is that people need to fit into something.

Eddie: The world is completely different now. Back when I'd go out, if I was wearing the same shirt as my friend, one of us had to change or we weren't going out. We had to look different. That was the millennials through to the older Gen Z, the '90s and 2000s babies. But the new Gen Z want to wear what everyone's wearing. Right now everyone's wearing white socks on top of black skins. Everyone's wearing checked short-sleeve shirts. Not just guys, girls too. And it's not just in Australia. In New York, all the girls are wearing the same stuff. In Paris, everyone's wearing the same stuff. I feel like they just want to be part of it. There must be a psychology study about this, some sense of belonging. I go to the shops and all the kids are wearing the same stuff, same haircut, and I'm like, which one are you again? The identity is a group identity rather than an individual identity. Back then it was different.

[1:09:27] Curating racks by customer "avatar"

Kane: It is so different. I was thinking, beyond what people are wearing in general, one step deeper is the specific brand. LSKD is really popular, everyone wants to wear that, and Cabinet Noir is more the higher end of fashion. I'm not a fashion guy, but you do the staple kind of stuff as well.

Eddie: When I curate my collections, I think about people as avatars. The accountant, the gym junkie, the rock-and-roll guy, the loner kid. What do they wear when they come into the shop? What do they listen to? I look at what they're wearing. That's why I love being in the store, because I'm subconsciously learning what everyone's wearing. Out of the 10 people today, six were wearing oversized baggy pants or cargos. I need to make cargo pants. Everyone's looking for camo, so camo's in. Everything comes in circles.

When I curate the collection, each rack is made for an avatar. If someone wears a tighter t-shirt, "Don't worry about that side, come over to this side." It's like going to a record store. You go to the genre you like, funk, R&B, hip-hop, whatever. You don't browse through every vinyl. You don't want to browse every single product in the store, because it'll take ages and you won't relate to most of it. My job is to help you. "What are you looking for? Cool, go over here. This rack will be good for you. You might like this too." My job is to slowly style them.

[1:10:54] Where Australian fashion takes its cues from

Kane: With things cycling back around, like the cargo pants or camo, do you have to look at other countries to see where things are going, or can you do it in real time?

Eddie: Back then we used to follow what the Europeans and Americans were wearing. But now Australians have such an identity of our own that I'm seeing on TikTok and social media people in London and America wearing Australian brands and talking about them, which is crazy. So now we have our own identity, and we grab pieces from Europe and Japan. Japan is a big influence for us. That's why a lot of Australian brands are so influenced by Japan, with the heavyweight workwear, denim and all that. That all comes from Japan, because where did everyone go on holiday? Japan, the last two or three years while the yen was dropping. Now where are they going? China, and Chinese fashion is crazy. Korean fashion is crazy too. And hiking and running fashion are also a thing now, outdoor fashion and stuff like that.

[1:12:28] Learning to say no

Kane: So much to consider.

Eddie: That industry is blowing up. That's why we've been talking about narrowing down our niche, trying to target one person instead of 10.

Kane: Yeah, it's hard. Like you said before, saying no more often. That's something a lot of people learn later in life. There are a lot of lessons you can't be taught, and saying no is so hard. Back in the day, if we got an opportunity, it was, "Yep, we'll do it. We'll make it work. Take it on." It costs you money to figure out, and you're better next time. But maybe you should just say no and do the thing you're good at in the first place.

Eddie: I see it. But you learn by doing, by failing. I always tell people, learn how to fail and enjoy failing. People think failing is the end of everything. They think if they don't make it doing it this way, they're a failure forever. I'm like, no, you're just not good at that. You might be better at doing this.

[1:13:14] Burning the boats and going all in

Kane: You've made a comment before about burning the bridge behind you. What do you mean by that?

Eddie: I think it's from The Art of War. The story is about a small army landing on a shore to fight an army 100 times bigger. The captain burned all the boats behind them so they had nowhere to go. If you want to return home, the only way is by winning and staying alive. And they ended up winning, because the mindset was, we have to win to stay alive and go home. Same thing with business. A lot of people say, "Oh, I'm just going to dabble in this." The number of times people come to me saying, "Hey, I want to start a brand, but I've only got this much, and I'm just doing it on the side because I'm doing other stuff too." Bro, then you're just wasting that money. It's your fun money that you're burning. If you're serious, drop everything you have over there and put everything into this.

Kane: It's such a good point. I've been seeing other people with a foot in multiple businesses, and I'm like, how? Do you think some people are built to be able to do that?

Eddie: Once you get to a certain threshold, when you have a lot of excess income. Your cup is super full, it's overflowing, and then you get another cup to pour into.

[1:14:53] Fill one cup before you pour into the next

Kane: I think that's a good point. I think that's what it is, because the people I'm thinking of have already made it, and they're doing this and this, and I'm like, how? I struggle to do one thing. Alex Hormozi had a good analogy. Imagine having 10 cups, and you're pouring a jug of water into them bit by bit, trying to put a little bit here, a little bit there.

Eddie: That one's down, that one's up, that one's down, that one's up.

Kane: Yeah. And none of them will get full. What you should focus on is filling that whole cup first. Oh, it's overflowing, all right, then fill the next cup. Oh, it's overflowing, fill the next cup.

Eddie: That's a good way of thinking about it. Before, I was doing the same thing. I wanted to do a cafe, I wanted to do this, I wanted to diversify. My brand's so huge, everyone knows our brand. But a cafe is a different business, and I didn't know that. It failed. Well, we were just breaking even, we weren't making money, so I ended up closing it. But now I'm all in. This is my do or die. All I can think about is Cabinet Noir. You have to be obsessive about that one thing. If you're thinking about other stuff as well, then you're not filling the glass you want.

[1:15:49] Wanting stores in Paris, Tokyo, Dubai and New York

Kane: On that note, you've mentioned before wanting to open stores in Paris, Tokyo, and maybe Dubai and New York. Is that still on the cards?

Eddie: That's still on the cards. Paris is probably the one I want the most. Dubai would be nice as well. They're places I want to go on holiday, reasons to go there. Reasons to go to Paris, reasons to go to New York, reasons to go to LA. But Perth is home. That's on the cards once this bucket is overflowing.

Kane: Maybe with a business partner who can run it? That's something that's hard. You see it with trades in Perth or over east who try to go multi-state, and it just fails so fast. If you were to do something in a different place, do you reckon you'd need a business partner?

Eddie: I'd have to make sure I have a community there. I'd be looking at my sales: is there demand in Paris? Is there more demand in Dubai? Saudi, for example, was our biggest market. We had a Saudi prince wearing our stuff, and they'd buy a lot of our products.

Kane: Where from? Online?

Eddie: No, from a luxury store called Rubaiyat.

Kane: Oh, so they stocked your stuff?

Eddie: Rubaiyat was insane. They'd buy so much stock, and we loved it. When they buy, they buy an insane amount.

[1:17:16] Rebuilding wholesale toward 300-500 stockists

Kane: So how many other places stock your gear?

Eddie: We stopped wholesale during COVID, because we weren't operating. But I want to restart wholesale next year. I can easily get 10 or 20 stockists back on board. Ideally I'd have about 300 to 500 worldwide. That's what I want. That's a healthy amount without oversaturating the world.

Kane: I was going to ask about that. You said before you're making about 50 garments per run. Would you then be able to do a lot more, because that country is getting this much and that shop is getting that much?

Eddie: Each shop would only buy say 10 to 20 items per SKU, and that includes different sizes.

Kane: Oh, really?

Eddie: Yeah, they don't buy a lot. Every store will probably buy 30 to 50 grand worth of a collection, which isn't a lot. The big stores will spend a couple of hundred grand on a collection, the big department stores and online stores, if you're a well-known brand. With a wholesale business you can make maybe up to 30 mil a year. But what it does is create awareness in the market. For example, the Saudi market starts learning, "Oh, Cabinet Noir from Australia," and then it sells out over there and they look it up and buy from our online store. That's how Represent blew up. The wholesale business helped their direct-to-consumer business, their online store, because of the awareness.

Kane: I think I did the same. I think I saw them first on a podcast, thought they looked pretty cool, then went on their website and started looking through it. So them putting themselves out there, the personal branding, their story was obviously really cool. Have they sold, or are the brothers still doing it themselves?

Eddie: They're still doing it, but they have corporations investing in it now. They've got a big backer. George is still doing the creative side of the product. He loves product. He spoke about it in a video. I'm pretty sure he just wants to be involved with the products. Michael's more on the design side too. So the brothers are still doing their own thing, but they've let someone else look after the money side of things.

[1:19:48] Where to find Cabinet Noir

Kane: Cool. Before we wrap up, is there anything we haven't covered that you want to talk about?

Eddie: I'm pretty sure we covered most things.

Kane: A lot. I'm pretty sure you got some good bits. And where can people find you and Cabinet Noir?

Eddie: You can find Cabinet Noir at our third store, now located in Karrinyup Shopping Centre, level one, in the food court. We've got a very interesting spot by the balcony overlooking the whole city, near Zara. Come and say hi. I'm always there Monday to Friday. Come for a chat if you want to be part of the fashion industry or the fashion community. You'll find me doing bits and pieces. I'm actually doing a talk with South Metropolitan TAFE in October, and I really want to build up young designers and entrepreneurs in the fashion industry. If you want to showcase your brand, come and have a chat with me. But don't give me one of those, "Hey, I want to start a brand, where can I make my stuff?" Do your research first, then come to me and I'll gladly give you my advice and point you in the right direction.

Kane: And you do events as well.

Eddie: I do events and runways too. The next runway is in motion. Hopefully we do one before the end of the year.

Kane: In your shop?

Eddie: In the shop, normally. It's a fun event.

Kane: Awesome. Thanks for coming on.

Eddie: Thanks, Kane. Appreciate it.