Incu founders know what spreadsheets can teach about style
When you pick up some items off the shelves at boutique fashion chain Incu, you can find a black T-shirt for $390 or a white tank top for $270. A nude sheer dress will set you back $1135. A pair of brown sweatpants? $695.
It’s the details that make the difference. The black T-shirt has a gathered chest and a bow, and the white tank top by Jean-Paul Gaultier has buckles like overalls. While Irish designer Simone Rocha is behind the transparent dress, the tracksuit bottoms belong to New York-based brand Eckhaus Latta, which ignores traditional gender lines.
“The best compliment we got was from a guy who said, ‘I love the store so much I don’t tell my friends where I get my T-shirts from; I don’t want them to wear the same ones,'” says Vincent Wu, who founded Incu with his brother Brian in Sydney in 2002.
While a stylish young lawyer once loved an evening gown by David Jones, she now spends her time at one of Incu’s 13 stores in Sydney, Melbourne and the Gold Coast. Most of the pieces here are primarily streetwear, sourced from contemporary designer brands from around the world.
But the struggle to keep the modern consumer’s attention divided and diverted across devices dozens of times a day has never been more intense. International and domestic brands have proliferated, online shopping is on the rise, and traditional retailers from Noni B in Australia to Saks Fifth Avenue in the US have gone out of business.
And ultra-cheap fast fashion giants Shein and Temu have AI-powered algorithms that are driving a race to the bottom in some parts of fashion retail, with ultra-cheap fast fashion giants Shein and Temu gaining eye-popping market share.
But customers like Ayu (who declined to share her last name) still come to Incu. The 26-year-old chef had just purchased a $1,300 bag from Incu’s store at The Galeries in central Sydney, which his father found on a previous shopping trip in Melbourne.
“I don’t know what brand it is, but I thought it was very nice for my mother and I bought it today,” says Ayu. “I came here and saw… I am very happy.”
A regular Incu customer, Ayu enjoys browsing the latest products from cult international brands such as APC, Maison Kitsune and Maison Margiela, among others.
His best friend Nat, who visited an İncu store for the first time, says he was a fan too. “I think you need to know your style when you go there,” says Nat. “But it also opens your horizons.”
Old-school department stores, he says, were “for the masses.” “David Jones and Myer have a certain collection that you can find everywhere else.”
Despite being able to shop anytime, anywhere, customers turn to Incu for something fashion retailers are desperately trying to cultivate: a sense of cool.
It’s not something that can be found in the data. “In fashion, if you stand still, you let everyone pass you by. The spreadsheet tells you about the past. Your instincts tell you where to go next,” says Vincent.
“We don’t want to be one of those stores that was once cool, but then the owner gets a little older and loses relevance.”
brick by brick
Born in Hong Kong, Brian and Vincent Wu grew up with a shopaholic mother and inherited an appreciation for retail theater.
Australia’s fashion scene was still largely insular in the early 2000s: shopping malls were dominated by a handful of brands such as Jay Jays, Just Jeans and Cotton On. Most were local. International brands like Zara and H&M had yet to arrive Down Under; The big box store prevailed. The dot-com boom has just hit, pushing retailers more decisively towards bricks and mortar.
“I thought there was no one doing interesting things back then,” says Brian. “And I guess we broke every rule, too.”
Brian, who prepares business plans for his management consulting business, created a plan for Incu, short for incubator; The twins dreamed that the small retail outlet in the Galeries would be for up-and-coming local global fashion brands. To find clothes to fill the store, Brian and Vincent flew to Los Angeles, where they took the elevator to the top floor of designer showrooms and knocked on every door.
“You’re naive enough to do that when you’re that young. You just have to have the confidence,” says Vincent. “I guess they let us in because we were Australian. ‘Oh, you’ve come this far. We’ll let you in, check it out.’ We would never do it this way again. “We chose several brands this way.”
‘We were very nervous for a long time but the reception was very good.’
Incu co-founder Brian Wu
It took years for the Wu twins to establish themselves. If you go too mainstream, Incu will have the upper hand; becomes very frustrated and the chain becomes inaccessible.
“We never wanted to be mass market or fast fashion, we never wanted to be posh and stuffy. We always wanted to sit in between,” says Vincent.
Nailing Incu’s key demographics are more about mindset than customer profiles or age. “He could be 17, he could be 70,” Brian adds. “They like interesting design and quality and are looking for something different.”
But it’s hard not to suspect that shoppers gravitate towards the younger side – but not too young to be able to buy a $1,485 plain gray coat from Stone Island – at the end of that range.
‘You shouldn’t just chase big sales’
Fashion is inherently ephemeral: silhouettes, products, and brands constantly move in and out of style. The cost of overhead expenses such as rent and wages is increasing.
Incu’s fiscal 2024 revenue rose 2.9 percent to $58.9 million, according to its latest report to the corporate regulator. It posted a loss of $2 million, much of which was due to compliance with accounting standards that also accounted for leasing interest expenses. Other than that, figures provided by the company show losses were close to $400,000.
A year ago, underlying operating profit for fiscal 2023 was $1.6 million. Brian says the company returns to profitability in fiscal 2025.
“Because our market is so concentrated, the important thing is to optimize it, make it as efficient as possible, because all your overheads will already exist,” he says.
“You shouldn’t necessarily be chasing big sales. It’s more about how do you make it efficient enough to actually run it profitably?”
To this end, Incu has transformed from a multi-brand retailer into a vertically integrated company: It operates two independent stores for the minimalist Parisian brand APC and the Copenhagen-based brand Ganni.
One of the key focuses for the Wu brothers is growing their in-house brand, Incu Collection, which launched in 2018, which the duo was initially a bit apprehensive about.
“Our customers want to see the brands we discovered or bought from abroad, but do they want us to have an opinion about them? We were very nervous for a long time, but the response was very good,” says Brian.
The retailer-designed collection of high-core items makes up 12 percent of the clothing in-store and is part of a broader trend among retailers to own a larger share of the product they sell: designing and selling products in-house means more control, higher margins and the ability to adapt to trends more quickly. There is also Incu 1976, a menswear line made from Japanese fabrics designed for them by Brian and Vincent.
But there is a risk with these brands: high-end fashion brands don’t want their clothes to be in stores that will favor predominantly house brands and relegate their products to discount racks or small corners.
The twins are adamant that their own brand will never take over the store.
“Incu is an umbrella,” says Vincent. “Our job is to make people fall in love with Incu, and everything we hide underneath is a revolving door of interesting brands.”
Jessica Yun is a business reporter covering retail and food for The Sydney Morning Herald and The Age.Connect with: X or email.
