The story of Incu: how Hong Kong-born twins built a fashion empire in Australia
Brian and Vincent Wu created Incu in 2002 and now see annual turnover of over US$23 million. They talk about the business that inspired them and say that when it comes to making money, you can’t beat Hong Kong retailers
Battered by an unprecedented influx of international retailers since 2011, a number of Australian fashion players have gone to the wall in recent years.
Nimble local operators like Incu, on the other hand, are riding out the storm.
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Founded by twin brothers Brian and Vincent Wu, Incu started with a 72-square-metre (775 sq ft) store in Sydney’s Galeries shopping centre in 2002. It has since experienced rapid growth: in the 12 months to June 2017, the Incu Group had turnover of just under A$30 million (US$23.6 million), growing 15 per cent from the year before.
Targeting the contemporary designer segment that nestles between luxury and mainstream fashion, the group boasts a network of 12 stores in Sydney, Melbourne and the Gold Coast. Eight of these are multibrand Incu stores, with four monobrand stores – for French ready-to-wear brand APC and US fashion label Rag & Bone – that are operated in partnership with the group. The group’s separate Sydney warehousing business, On Point Distribution, manages logistics for seven other fashion brands.
Incu – short for “incubate” – stocks over 100 fashion and lifestyle brands, including Paul Smith, Kenzo, Isabel Marant, Acne Studios, Adidas, Comme des Garcons and Maison Balzac, alongside hot Australian labels like Bassike, State of Escape and Matteau Swim. Roughly 35 per cent of the brands are exclusive to Incu in Australia, with womenswear now representing 60 per cent of the group’s business.
Next month, the group will launch a new private label called Incu Collection, designed by Ben Pollitt, while quietly discontinuing the incumbent Weathered collection. Exclusive to Incu stores for Autumn 2018, Incu Collection will be wholesaled next season.
“It puts the Incu brand on the product and we’re trying to really lift that,” says Brian Wu, the group’s strategic director.
The Wus report seeing a dramatic shift in their customer base since the group’s beginnings in 2002. A significant portion is now made up of mainland Chinese – split 50/50 between locals and tourists – along with Koreans, Japanese and Indonesians.
“When we first started, the Chinese who were coming into our shop were all from Hong Kong,” says Vincent Wu, the group’s creative director. “We obviously understand a bit of Cantonese and so forth, but over the years we’ve seen that completely change to a lot of Mandarin-speaking [Chinese], so definitely from China. They make up a huge part of our business.
“Out of our top 25 VIPs, the majority are Chinese, [mostly] living here and obviously either studying here or working here.”
Born in Hong Kong in 1976, the Wus migrated at age five to New Zealand, where their father, a former Hong Kong banker, bought a prawn farm just outside Auckland. Eight years later the family of six decamped to Sydney’s leafy North Shore. (Their parents and sister have since returned to live in Hong Kong; another brother, Chris, runs a record label and touring events company in Sydney called Popfrenzy.)
Brian and Vincent both studied business and marketing at the University of Technology Sydney and the University of New South Wales. Afterwards, they both went on to IT jobs in the North Sydney business district – Brian at EDS Advanced Solutions and Hewlett Packard, and Vincent at Sun Microsystems.
Over the next two to three years, they met for lunch to plan out their IT exit strategies.
“[It was] a quarter-life crisis, really,” Brian says. “One thing that we were always passionate about – and probably from all the times travelling to Hong Kong in the holidays – was just retail and shopping.”
They found one Hong Kong store particularly inspirational – the multibrand Green Peace boutique in Causeway Bay. Co-founded by two other Hong Kong-born brothers, Sham Kar-wai and Sham Kin-wai, it was the precursor to the Shams’ now listed fashion retail conglomerate IT.
“We were quite inspired by how those guys grew the business – it wasn’t just about one store,” Vincent says. “They thought about the long term just really owning retail there and working with different brands and starting stores for them. When we first started, that’s what we wanted to build Incu to being, more than just one little store. We wanted to really try and change the retail landscape in Australia.”
Among the first brands stocked by Incu were Paul Smith, Karen Walker and Japanese graphic T-shirt line 2K by Gingham. Educating customers about 2K’s myriad artist and designer collaborators kicked off Incu’s content marketing strategy, the fulcrum of which today is the twice-yearly Incu Edition magazine.
As fans of Japanese brands United Arrows, Beams, and Arts & Science, the Wus believe Japan leads the way in Asia with experiential retail – but that Hong Kong retailers are better at business.
“In terms of retail and actually making money, and in terms of making sure that the sales are there, I think you can’t beat Hong Kong,” Brian says.
Will Incu be coming to Hong Kong any time soon? Although international expansion is “very tempting”, the Wus say, the group’s short-term goal is growing online, which currently accounts for 12 per cent of the business. Also in development is a 1,500 to 2,000-square-metre (16,200 to 21,500 sq ft) Incu emporium, which will most likely in Sydney, where the business is based.
“When [shopping centre operator] Westfield or a shopping centre approaches us, they kind of get a bit confused about where to put us, because we’re not Australian designer, we’re not luxury, and we’re not just womenswear,” Brian says.
“We just stick to our own little area and just try and grow our business that way. We’ve got the multibrand stores and then we’ve been growing the monobrand side. So with that and with the potential of online, [and] the opportunities there, I think there’s still a lot of work to do.”