WDT’s chief executive was brought in with a remit to overhaul all aspects of the business, and has set himself the task of discovering the DNA of its Firetrap, Sonetti and Fullcircle brands.
Pan Philippou, World Design and Trade’s chief executive, describes the business he joined in May last year as a sleeping giant. It is true that, since its inception in 1981, WDT has without much hype become one of the UK’s biggest and financially most successful young fashion businesses.
The group, whose brand stable is made up of Firetrap, Sonetti and Fullcircle, was founded and is owned by Asbed Momdjian. Last year, turnover was £73 million with profits of £6.8m. Momdjian has been candid about why he decided to bring in more management help. He told Drapers last year that he wanted to take the brands to the next level by building a widespread international retail and wholesale business, and establish a UK retail portfolio, and that he needed to hire in the experience to do that.
Enter Philippou, who has spent the past 12 years at Diesel. A trained accountant, he joined Diesel as finance director in 1995 and ended up running the brand in the UK before heading across the Atlantic four years ago to reposition the brand’s US subsidiary.
He says: “I had a wonderful time at Diesel. I learnt a hell of a lot about the industry by leading the team in the UK and then building a business in the US for the past four years, where we repositioned the brand. When I arrived in New York, Diesel’s footwear business was bigger than clothing and distribution was a mess. I refocused distribution into a high-end operation and opened 35 stores.”
Philippou says that what attracted him to the WDT job was another opportunity to shape the business. “I can honestly say that when Asbed got in touch it was the first job prospect that I had been really excited about,” he says. “I suppose what I could see was the opportunity. I felt the business was a bit of a sleeping giant. I looked at it and knew as a team we could improve on it.
“I could have gone to a business where the brands were fully evolved. But working at another company like that would just be like driving another Rolls-Royce: a smooth journey with no real bumps along the way. At WDT I knew I could really make a contribution, along with the rest of the team, and take the business to better things.”
Philippou concedes that for this strategy to work, it was crucial that he got on with Momdjian and that the roles the pair would take within the business were clearly defined.
“I think our skills are complementary,” he says. “He was looking for someone to drive the business and move it up to the next level in terms of international presence, sales and brand positioning. He wanted someone in as a chief executive who would enable a shift from a patriarchal business to one with a strong management team.
“He also wanted someone who could do that without bringing in a level of bureau-cracy, which some managers of that type expect. As far as Asbed is concerned, I report to him and he remains very much my boss on creating strategy. But his day-to-day focus now is product – he is the creative sign-off and is the first port of call for our creative teams.”
So after saying yes to the job at WDT, was there anything that surprised him when he returned to the UK? “What struck me was how much the UK casualwear market had changed in the space of just four years. It proves what a dynamic market this is compared with the US. Some of the brands which are now key UK players, I’d never heard of – the likes of Gio-Goi, for instance. People are definitely much savvier on price here now as well. The customer is so smart nowadays, you can smell it.”
Philippou concedes that WDT is complicated, that it is currently a wholesale business that wants to have a retail arm, and in hindsight it made its first forays into retail too early. He explains: “To manage three brands and get one of them to a level where it can support standalone stores is challenging. We need to eliminate any overlap in the brands and ensure our systems are able to support retail before we get there.”
With that in mind, Philippou has launched what he has dubbed a “brand DNA” exercise to put some clear distinctions between each of the brands, and give the business a purer vision about how it wants each label to be defined in the marketplace.
He says he is lucky that he inherited a strong team at WDT to help him do that, but he has also brought in outside expertise. Firetrap, which represents 60% to 65% of WDT’s total sales, has been without a brand director for two years. Philippou has appointed Sors Bos to the role, who will join next month from his role as strategic planning director Nike, to oversee distribution, sourcing, sales and marketing. Darren Poulter is brand director at Sonetti, where he has been working for four years, while Simon Smith is brand director at Fullcircle, a role he has held since 2002. Philippou says the role of brand director will concentrate on sales, mar—keting, product development and the brands’ DNA – everything that adds value.
He has recruited Mark Ashby to run WDT’s HR function. Ashby, who joined two months ago, was previously head of people at coffee chain Starbucks. Nick Starsmore heads up retail and joined the company in May from premium brand Evisu, where he ran its retail operations in the US.
Philippou says WDT is in a transition period, and most of the work on its brand DNA is unlikely to be finished until autumn 09, when the distinct personalities will become visible in the collections.
He says Sonetti, which makes up 15% of sales, is not a brand that WDT needs to be pretentious about. “Sonetti has good brand recognition and it sits in the volume market, which can be more lucrative for us if we sell more to existing and new international clients. With Sonetti it is all about building up the sell-throughs with our existing customers.
“It is also about opening up the inter-national business, particularly in Eastern Europe, where the brand has an opportunity to get an early foothold in emerging markets.”
With Firetrap, the strategy is not going to be so cut and dried. It is represented in 400 doors in the UK and is a brand that Philippou concedes needs clearer definition.
“There are a lot of brands like Firetrap in the market but not many as successful in the UK. But we need to stand out more,” he says. “I am being really ambitious for the brand and so is the owner. We want it to be the iPod, if you like, of the industry. G-Star and Diesel are great at what they do and we need to stand apart from them in a much clearer way.
“We need to take all the strengths of the brand, its British heritage, its reputation for great outerwear and the slightly subversive and quirky attributes that come along with that, and bottle those things. We want to be the British denim brand.”
One retailer who has stocked Firetrap and Fullcircle agrees that WDT needs to step back and focus on brand identity. “WDT has been great at anticipating what the market wants and then creating a brand that can deliver it. But it needs to work harder at identifying what it already has, and ensuring it has a strong brand proposition which can evolve while still remaining true to itself,” he says.
A rival brand director agrees. “What is distinctive about Firetrap is its jackets. It had one of the industry’s best outerwear designers in Steve Atkinson [now at Gio-Goi], who helped create that niche. That should be the starting point and it should build from there. I’m not sure Firetrap should be talking about being a denim brand.”
Philippou says it will not be until Firetrap’s brand DNA is clearly established that it will look at distribution. He says he is painfully aware that this area is volatile – the market has consolidated further after the acquisition of young fashion chains Bank and Scotts by JD Sports Fashion in December 2007 and Jan-uary 2006 respectively, and Envy by retail entrepreneur John Kinnaird this February.
He explains: “For Firetrap, it’s not going to be about opening more doors. The growth will come from upping the brand’s profile and making more of a statement, which should increase sales. For instance, we are doing a lot of work on installing corners with the department stores this autumn to give the brands’ more impact. We are launching 18 Firetrap corners, 12 Fullcircle and 25 Sonetti.” But Philippou would not say which stores.
The business’s marketing focus in the short to medium term will be industry-facing and below the line. It aims to spend the 7% of sales set aside for marketing at the retail level, either via corners and PoS material, or by giving stockists product training.
Philippou says as the brand positioning becomes clear, the pace of expansion will pick up, particularly in terms of its retail business, which is a key objective. Firetrap has a store in London’s Floral Street and three others in Belfast, Manchester and Edin-burgh, while Fullcircle has a store in Earlham Street in London’s Covent Garden, and another due to open shortly in Westfield London in White City, west London.
Over time Philippou is looking to have 10 Firetrap and 10 Fullcircle stores in the UK, but is keen to stress that the brand does not want to be a retailer – although Firetrap is also set to launch an ecommerce site in November with a Fullcircle site to follow six months later. He maintains that the bigger opportunities for retail lie abroad. “Firetrap is sold in 15 countries and 15% of sales are international. I think we can grow international sales by 50% in the next 18 months,” he says.
“We have opened our first Firetrap store in Dubai at Festival Mall and will open a second this month in Mall of the Emirates, plus five shop-in-shops with our Middle East partner, The Paris Group, in the next 18 months.
“All our international distributors are asking us to open Firetrap stores with them – we almost have a waiting list. I don’t think we will be ready to move on that until autumn 09 but, when we do, we’ll be looking for rapid growth with three or four key distributors.”
Philippou is aware that pulling off some of these targets in an ever-softening trading climate starts to look more ambitious by the minute. He says: “It’s an interesting time to be doing the sort of work we are doing. Times like these mark out the strong businesses from the weak. Considering how well the company has been run, it’s quite a humble outfit in its approach to the market.
“Part of my job will be to create the self-belief in what the company can achieve internationally. The owner is ambitious to grow the business. It is up to me to ensure the team believes in those ambitions.”
2007 Chief executive, WDT
2003 Chief executive, Diesel North America
1996 Managing director, Diesel UK
1995 Finance director, Diesel UK
Who do you most admire in the fashion business?
Peter Lawley. He was the UK sales director at Diesel and now works at Dolce & Gabbana. He’s a pretty understated guy but brilliant at what he does. He has an incredible amount of knowledge about the business but is also a visionary. I learnt so much from him – not just about the trade but also how to behave. He hasn’t been given the recognition he deserves in the industry.
Which is your favourite retailer?
I love Corso Como in Milan. Every time I go there I always find something that blows me away, plus there are all the trinkets to browse through and a great cafe. It’s just a fantastic experience.
What is the best-selling product you have ever worked on?
I’m not sure if it was a bestseller, but it was one of those that just came out of nowhere: the Hush four-pocket jean at Diesel. It was about 2003 – it had patch pockets back and front and a slightly 1960s look. We thought it was a quirky piece, but it started selling and went bananas. There was also the Wink jacket at Diesel, which Jarvis Cocker wore to the Brit Awards when he mooned at Michael Jackson. He slept on it when he was arrested after the event and told us how comfortable it had been.
What has been your proudest achievement?
It’s not my achievement, exactly, but I am proud of all the people I have worked with over the years and how so many of them have gone on to great jobs in the industry. Many came up through the ranks or from the shopfloor. It’s a great feeling having worked with these people and seeing them progress.
What would be your dream job apart from fashion?
It would have been great to have been involved in the music business, so maybe a DJ. As a career that looks like a pretty good gig.