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Bread & Butter Interview: Karl-Heinz Müller

It took a retailer to make Bread & Butter a phenomenal and market-leading success. Eric Musgrave finds that Karl-Heinz Müller is as confident as ever as he prepares to blow out the candles on the event’s 10th anniversary cake.

The hoteliers and taxi drivers of Berlin must have Karl-Heinz Müller at the top of their Christmas card list. The massive Bread & Butter show - 600-plus exhibitors and probably 80,000 visitors - will stay at the extraordinary Tempelhof airport for at least another 15 seasons as a leasing agreement has been made on the venue for another seven-and-a-half years. After that, there’s an option to remain for another 10 years.

“There was no grand plan for Bread & Butter, no turnover goals. I just always tried to do my best. But even now I look at what we have created and I have to say ‘Wow’,” says the genial creator of B&B.

Despite worldwide economic pressures, a shrinking base of independent, brand-focused shops and a changing distribution network that is still coming to terms with online sales, Müller is confident about the future of the event and the sector it serves. “In the fashion business there is always development,” he says. “Twenty years ago, the casualwear area was not as huge as it is today. Today, without doubt, the urban and streetwear sector is the largest sector.

“Looking at the multiples, they also are not like they used to be. When I was young and my mother bought me the Jinglers jeans brand from the German C&A chain, I wanted Levi’s. But these days clothes from places like H&M, especially with its designer collaborations, Zara, Uniqlo and Abercrombie & Fitch are cool. There’s been huge change in the past 10 years.

“And so, in the same way, online sales are another new development, but for fashion retailers it’s an opportunity, not a threat. The only thing that really bothers me is the price-breakers, who offer good brands at a discount. I see people who come into 14 oz, my own retail store in Berlin, to try on things and then they go away and use search engines to find the lowest price for them. This is a really bad development and the industry has to be careful about who it gives its main collections to.”

Independent spirit

He adds: “We know that the main direction in fashion retailing is about the chains and fashion malls and so on, but there will always be a trend that’s against that. A very well-done independent retail concept will always have the best chance of succeeding.”

As most British exhibitors and visitors know Müller only as Mr Bread & Butter, it’s worth remembering he has very deep roots in the jeans and casualwear sector, having sold brands, directed brands, operated as a distributor and run his own stores.

Born in the Saarland area of Germany on the French border in 1957, Müller made a start in retail as a teenager working in a delicatessen, but he credits a move in 1978 to Mars, the American confectionery giant, as the making of him. “It was my first major job and my first taste of an international company,” he says. “The training was excellent and I learned about things like business planning and developing marketing strategies. Due to the prolonged sickness of an older colleague, I was given responsibility for key accounts in my area. While at competitors people doing my job were in their 40s or 50s, I was only in my 20s.”

The return of his colleague and the prospect of an effective demotion encouraged Müller to seek a new position. A sales rep’s job in Bavaria for Levi Strauss caught his eye in 1981. “I had no clue about fashion,” he admits. “I wasn’t even interested in fashion, but Levi’s was an American company like Mars, with a similar structure. I spent three years with Levi’s in Bavaria and always hit my targets. But after three years I was hungry for more challenges.”

Next on the CV was a move to Big Star, a Swiss-German jeanswear brand run by twin brothers Edwin and Laurin Faeh, who were hugely influential in the German-speaking and Benelux markets. It was here that Müller became dip-dyed in the indigo denim business. “In my eight years at Big Star I was essentially Edwin’s assistant and he took me everywhere - to Hong Kong, Portugal, Italy and the US,” he says. “I learned about the fabrics, the jeans manufacturers, the laundries, the fabric agents. The late 1980s was a big time for jeanswear.”

One useful contact from those days was Jos van Tilburg, a Dutchman who wanted to bring Big Star to the Netherlands. But trademark complications forced him to market the product under the Gapstar label. That in turn annoyed the US Gap corporation, so Gapstar became G-Star in 1994. Tilburg remains one of Müller’s main allies.
Müller’s reluctance to move to take up a higher position in Switzerland with Big Star caused him to leave in 1992 to join the Swedish-German lifestyle brand Marc O’Polo to introduce its Marc O’Polo Jeanscraft line. The experience brought him into retailing as he operated the first Marc O’Polo Jeanscraft franchise store with a partner in 1994 in Munich.

A friend from those days was Rob Dunk, a Dutchman who was head designer for Pepe Jeans. He introduced Karl-Heinz to his chief executive, Fred Gehring, who head-hunted Müller to succeed Miles Gray as country manager of Pepe Jeans Germany. This was another set of useful and deep-rooted contacts that only underline Müller’s unrivalled credibility with the sector.

“By this time I was a fan of authentic jeans and Pepe Jeans was doing some good product, but the business was not doing well. I had to leave Bavaria to move to Düsseldorf. Then Pepe’s owners, Lawrence Stroll and Silas Chou, announced they were merging their other main business, Tommy Hilfiger, with the Pepe operations. I was a huge fan of Pepe and wanted to concentrate on that. They closed the German subsidiary and offered me the Pepe distributorship, but I did not have the required funds, so I left.”

Keeping faith

One useful souvenir of this period was that Müller took over a former Pepe Jeans shop in Cologne. It was a tribute to the faith that people have in him - which has been seen throughout the Bread & Butter era - that Fred Gehring, by then the European head of Pepe and Hilfiger, underwrote the lease on the shop and provided advantageous terms so that in 1999 Müller could get moving on his new venture, a store branded as 14 oz (the traditional weight for jeans denim).

“By the end of the 1980s, Edwin Faeh at Big Star has begun to bring together some all-American labels like Carhartt, Schott, Johnson Woolen Mills and Spiewak, which I loved, and I added to them in 14 oz newer brands like Evisu, Duffer, Maharishi…”

The move that saw a successful, if niche, independent retailer become Europe’s most influential show organiser was prompted by a trip Müller took to a gathering of leading buyers at the head office of Adidas in the village of Herzogenaurach, Bavaria. “The main person at Adidas then was Michael Michalsky, who had been responsible for the introduction of Adidas Originals,” says Müller. “We were on a huge sneaker wave in April 2001 when he brought together about 50 leading retailers from the German-speaking markets. It turned out that I was the only person who knew everyone else there, so I was doing a lot of introductions. After a nice dinner, at about 2am or 3am, we were all sitting together in the bar of the Adidas Hotel talking about what was going to happen with the fairs. That night I had a dream about having a party where everyone I knew from the business came together, and when I woke up I knew I was going to make a new fair.”

In simple terms, B&B has replaced the monolithic Inter-Jeans in Cologne, a fair that had its origins in 1975. As the major show for the fastest-growing fashion sector in Europe’s most prosperous commercial market, Inter-Jeans was the main event in the 1980s but by the end of the century it was running on empty. “Since I started my career in textiles in 1981 when I joined Levi’s, I had been to every Inter-Jeans session,” says Müller. “You simply had to go there if you were in the business. But it had become boring and predictable.

“In 2000 I had taken on the distributorship of Le Coq Sportif in Germany and so I was a potential exhibitor, but I knew so many people were now missing and that brands like Levi’s, Replay and Diesel had left the fair. As a buyer, I had a different take on how the show should be. The main problem was that the Cologne fair people did not understand the business.”

An insider’s initiative

Given his background, such ignorance did not apply to Müller. Four months after his prophetic dream at the Adidas Hotel, Bread & Butter made its ground-breaking debut in a near-derelict factory in Cologne that had once housed an engineering company.

Müller, then 44, had teamed up with Kristyan Geyr (34) and Wolfgang Ahlers (36) of the Cologne-based Noodles Noodles & Noodles marketing company to launch his new venture. Most of the 50 brands at the debut were suppliers to 14 oz, such was the insider nature of the initiative.

This Drapers supplement chronicles the extraordinary story of how Bread & Butter outgrew the initial venue in Cologne, moved triumphantly to Berlin, transferred to Barcelona in 2005, before returning to Berlin’s disused and historic Tempelhof airport in July 2009.

But why the roaming around, which was counter to every rule about building up an international show? “We outgrew Cologne. In Berlin we bought one main building [at the striking Siemens Kabelwerk factory complex] but the rest we rented from Pirelli and each season it was getting like Russian roulette as we didn’t know what the rent would be. Meanwhile, Barcelona was in the middle of huge economic development and as we did not attract so many visitors from southern Europe to Berlin it seemed like a good place to go. Barcelona turned out to be a fantastic host city and it was so proud to have Bread & Butter there.”

For a very short time Müller floated the idea of moving the fair to a different European city each season, but happily good sense prevailed and B&B stayed in the Catalan capital for eight seasons (for the first four of these B&B ran a smaller edition in Berlin also to serve its home market).

“Exhibitors told us they did not want to move each season and have to make a new stand and so on,” he says. “Also it became clear that there are not many European cities that are affordable and have the venues, the hotels, the restaurants, the airports to handle an event as big as ours.”

From its debut with just 50 exhibitors in 2001, B&B hit more than 1,000 stands in Barcelona in July 2007, by which time there were plenty of grumbles that the event had lost its edginess, its quality control on exhibitors and was becoming unfocused. A few years down the line, Müller acknowledges the truth of this. “Much of the growth of Barcelona was due to the demands of the local market,” he says. “As far as the Spanish were concerned, Custo was the local hero at the fair. But a lot of things that worked in Spain were not interesting to northern European buyers. I also began to have a bad feeling about the overheating of the Spanish economy. I could not believe how expensive Barcelona had become.”

Having listened to the entreaties of long-tern confidantes such as Von Tilburg and Diesel owner Renzo Rosso, a return to Berlin made sense - Germany remained the biggest consumer market in Europe and probably the most resilient economy. Finding a venue was the major challenge until Müller discovered the city was trying to find a purpose for the recently closed Tempelhof airport, which had become famous during the Berlin airlift of 1948-49.
Its amazing terminal building, constructed between 1936 and 1941, is an arc about 1.2km (three-quarters
of a mile) long. Seven huge hangars made superb halls for a now-refocused B&B of 600 or so exhibitors.

The return to Berlin in July 2009 was a huge success. The B&B team even managed to insulate the building from the ravages of a Berlin winter for the following January editions and this summer’s event is certain to be big on celebration. Müller’s retailer’s eye still guides B&B.

“To keep this event fresh, we have to listen to our customers, we have to know and understand their needs,” he says. “Compliments are nice to receive, but I find it more useful when someone says, ‘Nice show, but can I just suggest…’ Then we learn what we are missing.’

Knowing clients’ needs

He adds: “I spend about 80% of my time with exhibitors and my employees [B&B has a staff of about 100 full-timers, plus a small army of seasonal staff] and I have a lot of eye-to-eye conversations and receive a lot of information. I know what my clients’ needs are. Sometimes you have to stop something even though it is still successful. We know we are not the only event for the sector, but when we have competition we are awake. When you have no competition you start to get lazy. My motto is, ‘Be brave and be early.’”

This is not a bad strategy for any confident and progressive retailer either.

Each of the eight sections in B&B has its own brand manager, more often than not someone with a background of working for a significant company in the relevant sector. Last year, 30-year-old Sebastian Hennecke was named vice-president of Bread & Butter, effectively Müller’s deputy. “Sebastian has been with me for eight years and he is almost like a son to me,” says Müller. “We do different things better. For example, I am not a Facebook guy, but Sebastian really understands social networking.”

Müller’s attention to detail is one of his great strengths and he still personally selects the brands to go in one of the newer sections he dreamed up, LOCK (Labels of Common Kin), which brings together heritage-based and hand-crafted brands. It is essentially a line-up that would be found in his 14 oz store in Berlin’s fashionable Mitte district. “I built up the LOCK concept over the past seasons. Now, Alex

Kernlinger is the product manager for the area, but we are working very closely together.” Müller is still head buyer for 14 oz, fitting in these duties when B&B has a quieter time after the show. He plans to open two other versions of the concept in Berlin during 2012. His legendary energy has also seen him father five children (now aged 33, 31, 12, four and two years) by four different partners (perhaps appropriately, Müller was born on St Valentine’s Day).

Keeping up with the new

Despite its tremendous success, Müller is genuinely confounded that some jeanswear and streetwear buyers do not attend B&B. “I honestly can’t believe that still some independent retailers don’t come to our show, or even other shows,” he says. “They, obviously, are retailers by accident. They should go just to photograph what other people are wearing. It’s important to know what is happening. Even a car mechanic has to keep up with new technology. But the best buyers are really professional and are awake and they will continue to be successful.

“One thing we all have to work against, however, is the idea that the guy or girl who works in a fashion store is somehow a loser, that they are there because they can’t get a better job. In 14 oz, where I employ 15 full-timers plus part-timers, I pay my sales people well because I want them to be proud of being good at what they do.”

Ten years in, Karl-Heinz Müller, the great denim fan, admits that he failed to make his fabric and laundry area, The Source, a success. He gave up after two seasons in Barcelona. He has also failed to bring together a convincing kidswear area, despite various attempts. The creation of Bread & Butter has not been without personal cost, either. “In the beginning everyone told me I’d lose money. I had no planning, I just wanted to run a small independent fair, run my shop and be a distributor. But with what happened, I had to move from Cologne to Berlin, I closed my first 14 oz store in Cologne and I gave up the distributorship. OK, now we are still in Berlin and I have a new 14 oz store, but it’s been a hard journey.”

Hopefully the next 10 years for B&B will not be quite so demanding, but with Müller at the helm, we always should expect the unexpected.

MÜLLER’S TOP 5 BEST STANDS FROM B&B

  1. It is really, really hard to define a Top 5, as we have had so many fantastic brand presentations, but here goes…The very first G-Star stand in the Siemens Kabelwerke in Berlin in summer 2003. They built an incredible stand, in the shape of a cauldron, in the centre of the fair. It was a statement for everyone else.

  2. In winter 2010 Paul Frank had a fantastic showroom installation covering 3,230 sq ft. The space was used like a house with living rooms.

  3. In summer 2010 the Polo Jeans Ralph Lauren stand in displayed an incredible engagement.

  4. The Diesel booth in summer 2010. They built a dome in the outside area, which created a great atmosphere. They have built a real destination stand there.

  5. The Nigel Cabourn booth in winter 2011 was a statement towards the whole LOCK community and family. The stand and his presence at B&B was a great success for him.

 

MÜLLER’S TOP 5 FASHION TRENDS FROM B&B

  1. From 2000 the sneaker evolved from a performance shoe to a fashion item and so began the sneaker revolution. Brands such as Nike, Puma, Le Coq Sportif, Dunlop, Gola and Onitsuka Tiger generated a huge hype.

  2. The LA denim phenomenon started around 2002-03 with Earl Jeans, Paige, Citizens of Humanity and so on. These jeans cost about ¤200 to ¤300.

  3. Also around 2002-03 there was a general renaissance in the denim market. Major brands hit massive turnovers as jeans were developed with extreme treatments, washes and styles - and prices went up.

  4. Urbanwear became more dressed up as a very sophisticated segment evolved with slim silhouettes in suits, jackets with jeans and so on. The pure looks from Scandinavian brands like Tiger of Sweden, Sand and J Lindeberg became big.

  5. In recent seasons we have seen
    the LOCK trend celebrating handcrafted and manufactured products in high-quality fabrics. Tradition and heritage have become new values, seen in British brands like Nigel Cabourn, Lyle & Scott, Tricker’s, Barbour and Gloverall. This is a very strong trend for the future.

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