Kiwi streetwear label Federation is streetsmart at exporting these days.

Five years ago when the company started sending its clothes to the US it offered credit to all its retail customers and learned the hard way. In some cases they waited up to a year to be paid, chief executive Nick Clegg says, “and in a few instances not at all”.

At one point they made the trek to a trade show in New York, where they got orders but not enough to cover the expense of being there.

But on that trip they met Marvin Jarrett, editor-in-chief of street fashion magazine Nylon, who took the Kiwis under his wing and “opened all the doors for us”.

Through Jarrett, Federation ended up supplying the large Urban Outfitters retail chain. The company had to weigh up the offer carefully. The American retailer’s list of requirements were lengthy and the profit margins less than impressive.

“The margins weren’t really there, which meant we had to look at other sources of production to justify the whole exercise of dealing with these guys.”

Around 90 per cent of Federation’s production is now done offshore, and it can do fast turnarounds of collections.

But the state of the US economy has meant even further margin reductions, and the company has decided to pull back from that market for now.

Federation was also sold by British department store Selfridges for a couple of years, but the label didn’t have anyone on the ground there and managing it from so far away was difficult so it has withdrawn.

Clegg says the company is now focusing on its still growing Asian, Australian and domestic markets.