The recent collapses of some key German womenswear brands point to a shake-up in the sector as UK retailers demand a more contemporary look for older women
The German mainstream womenswear sector, which has traditionally dominated the over-40s market in the UK, has found itself in a state of freefall after a series of collapses of key brands, leaving UK retailers and stockists facing falling sales.
Last week, German luxury womenswear giant Escada filed for insolvency after debt at the group spiralled and the luxury market was hit by the downturn. Escada had been forced to sell off its mainstream Cavita, Apriori and Laurèl brands earlier in the year to raise cash. In the same week, German retail group Arcandor, which operates the Karstadt department store chain and Primondo mail-order company, revealed it had failed to find a single investor since it went bankrupt in June.
The demise of Escada and Arcandor followed the administration of German firm Delmod International, the parent company behind brands Delmod and Hirsch, at the end of July. It was rescued days later by private equity firm Hanse Industrie Capital, which took an 85% stake in the business.
So what is the impact of such collapses on UK stockists and how can brands and retailers work together to ensure sales improve?
Brands that have traditionally pitched themselves at the 40-plus market or older – many of which hail from Germany – are facing mounting competition from more contemporary collections. As a result, the mature womenswear market in the UK is facing a shake-up as brands are forced to fight harder for space in department stores and independent retailers.
Retail observers argue that the reason some German brands are not performing well is because they are no longer right for the UK market, and that UK brands are upping their game.
Maureen Hinton, lead analyst at research firm Verdict, says some German brands have been reluctant to reinvent themselves to cater for a new generation of 40-plus consumers, who grew up during the freedom of the 1960s rather than the more conservative 1930s, 1940s and 1950s. She adds that many German brands have relied on styles that were popular in the 1980s, with product that is “formal and a bit glitzy”.
One UK agent for a German brand admitted to Drapers that its spring 10 sales were down 60% on spring 09, and it was struggling to meet its deliveries.
UK brands that have “translated contemporary trends for an older market” and presented themselves as ageless, but with a silhouette cut to flatter a mature figure – such as Rocha John Rocha at Designers at Debenhams, MaxMara and Nicole Farhi – are being favoured by department stores and indies over many traditional mature brands, according to Hinton.
Susan Smith, owner of womenswear independent Nicola’s of Otford in Kent, which stocks German brands including Frank Walder, Delmod and Gelco, says she found that a lot of German brands were not evolving to meet the needs of the store’s clientele. She now plans to
close the shop later this year, after 25 years of trading. Falling brand sales were a factor in Smith’s decision.
Smith says: “A lot of these brands design for a European market which is not right for our customers. For example, a trouser suit with a pink jacket and orange trousers is just not going to sell here.”
Smith knows of two similar stores stocking mature womenswear that have been forced to close in recent months. Many mainstream womenswear brands force indies to order six months in advance and are inflexible over payment structures, she adds.
A number of classic womenswear indies find it difficult to find collections that are cut to flatter an older figure while still being trend led. Julia Sawford, owner of Davenports of Grange-over-Sands in Cumbria, which stocks mainstream German brands including Bianca and Apanage, says: “We struggle to get clothes that are modern but don’t have that mutton-dressed-as-lamb look.”
However, while some German mainstream womenswear brands are being forced to close, others are reporting sales increases. Gerry Weber says that, in the selling season to date, its spring 10 sales are up on spring 09 by 24% for its mainline and 81% for the more casual Editions range. Gelco says its UK sales are up 9%, while German brand Bianca reported sales on a par with spring 09, considerably up on a very slow autumn.
Gerry Weber puts its comparative success in tough times down to more contemporary styling and an increased number of casualwear pieces, and in part to a change in delivery structure.
Gerry Weber UK and Ireland country manager Howard Ross says: “We now have seven programmes a year, four of which are in the spring/summer season, so we are always delivering newness and stockists have more opportunity to react to what is selling well.” He adds that many independents resisted the change but have since found it works for them.
The German brand is also one of many adapting its range to meet demand for more contemporary looks. Another, Basler, has launched the more directional MYBC collection for spring 10. But while Gerry Weber and Basler are specifically targeting a younger market in addition to their traditional customers, other brands are not changing their target customer but are giving their collections a more contemporary slant. Gelco and Passport – which are distributed in the UK by agency Apt Collections – are two examples.
Apt Collections director Nigel Hughes says: “It is a hard time for the mid-market German brands now because too many of them are doing the same thing. Gelco has stayed focused on the 50-plus market but has updated its offer. Everyone is going younger now but it’s important you do it in the right way. Some brands have tried to do it too quickly and lost their core market.”
Closures of independent retailers and increased competition for concession space are squeezing mainstream womenswear brands in both the UK and Germany, and many accept that they need to explore new avenues, including high street and online retail sales, to remain strong. Julie MacPherson, client executive at retail research company TNS, said: “The mature market is worse hit than in the previous slowdown and may be the last to recover, with more financial responsibility resting on the shoulders [of that demographic].”
Gelco is one German brand that is altering its route to market. It opened
its first UK concession last week, at department store Beales in Bournemouth, and has plans for more in the UK, suggesting that going direct to consumers may be the best survival method as stockists consolidate or replace mature brands.
Hughes says that having concessions and standalones helps the brands to understand what retailers and consumers want from the collection, and to get a better grasp for trends.
Ross adds: “All brands are constantly losing wholesalers as people close stores so it is important to have the retail side to maintain brand presence. That direct contact also educates the brand and influences design and delivery, which ultimately helps the wholesale side too.”
While parts of the German mainstream womenswear market languish after failing to react to changes in consumer tastes, other German brands are adapting their approach to ensure they understand what customers want.
The challenge for UK stockists is to recognise which German brands are adapting to survive and work closely with them.
As Smith says: “To survive they are going to have to start listening to their stockists.”