Zone Two’s Kenny Chan and Chris Akrimi use carefully selected partnerships and dedicated showrooms to promote its range of premium brands.
Nestled behind London’s Old Street station, fashion agency Zone Two’s head office and showroom is undoubtedly impressive. The 10,000 sq ft unit, set across two buildings, features separate, expansive spaces for each of its 11 premium brands, clean white walls that allow the product to do the talking and a bustling office space for the in-house PR and marketing department.
Now in its 14th year of business, Zone Two is expanding in 2017 – a 4,000 sq ft extension is planned in April to accommodate a growing team and the raft of new labels the agency has taken on for the autumn season, namely LA-based denim brand Joe’s Jeans, Wolverine-owned footwear brands Sperry and Keds, outerwear brand K-Way, Italian menswear brand Esemplare and contemporary menswear label Engineered for Motion.
“When we first moved into this building in 2010 we never thought we’d have so many staff,” laughs managing director and co-founder Kenny Chan, who started the business with Martin Cole – now operations director – in 2003, in a 300 sq ft office in Camden, in Tube zone 2.
“We had 15 people at the time [when we moved] and we now have 55 and growing. That’s part of the reason we’re expanding the office. We like to have a brand manager and sales manager for each brand, so when we take on more labels, we take on more people.”
Zone Two already represented Scotch & Soda, Samsøe & Samsøe, Eastpak, King & Tuckfield and Psycho Bunny before its latest additions.
Sales director Chris Akrimi, who joined the firm in 2010 from distributor Fashion Marketing, says Zone Two is currently in negotiations about taking on two or three further international brands later this year: “They are the same premium level, but won’t cross over with what we have. We’ll only take on something individual that has scope to grow in the marketplace and that fits with our other brands.”
This idea of finding something new and different but still maintaining the standard and positioning of the brands Zone Two already represents is inherent to the agency’s values, says Akrimi.
“To be honest, we get contacted several times a week about new brands to work with. We have a huge network in the UK, Europe, the US and the Far East, but our philosophy is not to take on lots of brands as we don’t want to cannibalise the ones we have. We want to dedicate the time, the money and the staff training to really develop brands in the right way.”
Finding a fit for the market is also crucial when looking for a new acquisition, says Chan: “We look at what the buyer is looking for, what the market is demanding. We need to answer the market.”
Travel and trade
Trade shows remain a major hub for the Zone Two team to pick up new brands.
“We’re always on a plane,” says Akrimi. “We go to LA, New York, all the shows in Europe and Jacket Required in the UK. In the past, we’ve been to Korea as well.”
“There is a necessity for brands to be at tradeshows to benchmark what the competition is doing,” he adds. “You need to have conversations in a more informal setting with buyers to discuss how trade is in general, what the market is looking for, what are the key fabrics, the key trends. So you get a good understanding of the season.”
Chan agrees: “I think it’s still really important, from both a supplier’s and buyer’s point of view. How do you know what to buy if you don’t go to trade shows? The problem now, however, is there are too many shows. They need to consolidate, as it is impossible for brands and buyers to go to them all.”
Chan adds that writing orders at shows in Europe is a thing of the past, although US buyers still place orders on the stand. He admits: “I much prefer people to come to the showroom. Buyers can see the entirety of the collection. You have more control and more time to talk through the range, which is so important”.
How do you know what to buy if you don’t go to trade shows?
Indeed it was Chan’s gift of the gab that got the ball rolling at Zone Two.
In 2003 Chan, who was importing baby clothing and footwear for various companies at the time, crossed paths with denim brand Big Star, and after one meeting Zone Two was born.
“I convinced them I could be a distributor before I’d even set up [Zone Two]. I went into that meeting empty handed and came out with them saying I was good enough to take it on.”
Chan’s history is rooted in the fashion industry – his family runs a denim supply firm in China and Hong Kong – but the trained engineer says he got into the sector accidentally 26 years ago when a family friend asked him to move to London to work on his denim brand. The brand, Easy Jeans, was one of the leading denim labels at the time, competing with Lee and Wrangler.
“They thought that because I was an engineer somehow my skills would be needed. I had the opportunity to work in all different departments from merchandising, to production, sourcing and sales management so it gave me the foundation to start my own company as I knew a bit of everything. I’m not good at everything, but I know a bit of everything,” he laughs.
It was at Easy Jeans that Chan met Cole, who had been operations director of the jeans company from 1998 until 2002.
Chan says the turning point for Zone Two came 10 years ago when the firm secured the Scotch & Soda contract.
“It gave the company our major break,” he affirms.
When Zone Two took on Scotch & Soda, the brand had agents for the north and south of the UK and for Ireland, but the decision was taken to consolidate the brand and take everything in house in order to regain control of the label and its distribution.
Scotch & Soda showroom
“It happened over a period of two years,” says Akrimi, who initially joined Zone Two as brand manager for Scotch & Soda men. “We have such wonderful showrooms it didn’t make any financial sense from a control or distribution point of view to have all these people on board, so we wanted to bring everything back in house.
“We employed people specifically for denim, men’s and women’s. As a consequence, the business grew significantly. Scotch & Soda was the catalyst for us. It showed other brands that we had the space, financial credibility and knowledge to develop brands,” he adds.
The agency continued to build up its brand profile, adding Samsøe & Samsøe in 2014 and VF-owned Eastpak 18 months ago. Turnover has increased 35% in the last two years.
Keeping it premium
The secret to Zone Two’s success is being a multicategory agency and maintaining its premium positioning, says Chan: “Our strength is lower premium to premium.”
The decision to focus on the premium market was a result of the credit crunch, where the mainstream market “fell away” in the UK, Chan explains: “Times had changed. You had to go higher or lower and going lower is suicidal for distributors. There isn’t enough margin if you’re trading down. It’s different for vertical, fast fashion operators who are selling direct to the consumer but if you’re the middle man you just can’t do it,” he adds.
Another big change in the market in recent years is growing competition from the high street and the speed which retailers can produce product, says Akrimi
“Zara and H&M can turn around a catwalk look in two weeks, but most brands work six months ahead – it has had a huge effect,” he explains. ”It means that we, and the brands, have to work harder to have individual product, better design detail and better fabric, as well as robust PR and marketing campaigns.”
Smaller independent retailers also need to work harder to encourage customers to spend, and this is something Zone Two strives to help its accounts with.
Retailers need to give shoppers a reason to come to them instead of going to the high street or online
“Retailers need to look at what is different about their stores. They need to give shoppers a reason to come to them instead of going to the high street or online. We try to work with our customers as closely as possible,” says Akrimi.
“We provide visual merchandising, stock swaps, sell-out guarantees, gifts, and our staff go to the shop floor. We do everything we can to make the sell-through where it should be, including PR, marketing, local advertising and online banners. It’s a two-way approach – if we want increased turnover, we need to de-risk it for them and support them.”
Chan adds: “The buyer and seller have to work more closley together to react to market conditions, especially given the challenges ahead.”
Eastpak spring 17
David Weeks, buyer at Xile, a menswear independent in Edinburgh that stocks Scotch & Soda, Eastpak and Psycho Bunny, said he has a great relationship with Zone Two as it “understands the business from a shop-floor perspective.”
One premium independent retailer that has been working with Zone Two for several years echoes this sentiment: “They’ve been very good to deal with: the staff are helpful and they give you the space and time to make your selections. There is a sense of maturity about the agency. They are firm on payments, but very fair.”
Undoubtedly Brexit is the biggest challenge facing the market and is causing unavoidable price increases across the industry following the drop in value of sterling.
Prices have gone up by between 5% and 10% on some products across all brands at Zone Two.
“No brand or supplier can swallow that 10% or 15% [drop]. The industry has to wake up to the new market conditions. We’ve tried to hold core lines and volume drivers. We’re absorbing as much as we can so it isn’t a sharp jump,” says Chan.
“We’re going to see a prolonged period of consolidation and uncertainty. We can always moan, but it all comes down to how you want to see it, whether you’re a brand, supplier or retailer. People still have a turnover to achieve and brands to acquire. You have to be positive and adapt to change.”
And changes are also on the horizon for Zone Two – overseas offices and an own brand label are in the works for the not so distant future.
“In five years’ time, we’d like to be multi-territory as well as multi-category. We’re looking tentatively at the US and Paris”, says Chan.
“We’re also having conversations about starting our own brand within the next two years, so there’s lots for us to do.”
Given their drive and Zone Two’s success so far, who would bet against them?