After advising a rescue of womenswear label Olsen, VeldhovenGroup UK boss Charlotte McHardy is delivering on her promise to revive it.
When the opportunity to acquire womenswear brand Olsen dropped into Martijn Veldhoven’s lap last year, he turned to his UK managing director Charlotte McHardy for advice. Veldhoven, chief executive of VeldhovenGroup, had poached McHardy from Olsen in 2009 and knew she would give an honest assessment of the German business - and McHardy’s response was unequivocal. She told him she saw great potential to revive the brand, which had lost about 150 UK stockists since 2010. And so in November 2013, Veldhoven acquired Olsen Group for an undisclosed amount and, in March this year, announced a full merger of the two companies under the VeldhovenGroup banner, adding Olsen to its portfolio of mid-market womenswear brands comprising Sandwich, Turnover and Dept. His team set about redesigning Olsen, with the results now on show to wholesale customers in the UK for spring 15.
Olsen has been through a tough few years. Previously owned by Hamburg-based Wolff & Olsen, its UK arm posted a £611,500 loss for 2010 on the back of £9.5m turnover, and a £2.15m loss for 2011 against a £7.3m turnover. The overall business filed for insolvency in August 2013 after a potential investor walked away from a deal to save it at the eleventh hour.
McHardy is clear about what went wrong: “There was a complete strategic change within Olsen [that she estimates took place about three years ago]. They tried, as so many brands do, to make it younger and more sexy, which alienated the existing Olsen consumer because she didn’t know what she was buying and it didn’t fit her, while the new customers they were trying to attract didn’t think Olsen was sexy and trendy. They mucked up the market.”
As a result, some retailers stopped buying Olsen, while others - who were not happy with the new direction but were loyal to the brand - reduced their order sizes.
Sharon Good, managing director of PR firm Good Results, helped launch Olsen in the UK in the early 1990s. She says the reason it has such loyal wholesale customers is because the brand has been loyal to them: “Through the 1990s, it grew and was phenomenally successful. It worked hard for its customers, offering PR support, helping with in-store days and making the stock system more flexible.”
McHardy agrees with this assessment: “People didn’t like the collection but didn’t want to lose the brand, so where an average order might have been £6,000 before, they would spend £2,000 to keep it. There’s a lot of potential to get that business back.”
However, some 150 retailers did stop buying the brand altogether - and here McHardy’s task will be harder. Jan Shutt, owner of womenswear boutique Sunday Best in Rawtenstall, Lancashire, stocked Olsen until about five years ago but stopped after it became “boring and overstyled”. She admits the brand was always good at supporting its customers - with discounts and helping to arrange in-store events - but that wasn’t enough to make up for the weak product: “The price was always good but the product wasn’t there.” She would consider restocking the brand, but only if the new collection has significantly improved. “It’s about getting the design element right,” she explains.
McHardy says the Veldhoven team used archive material and extensive customer research to find out what consumers wanted from Olsen’s redesign:modern, wearable clothes that are a good fit. “The design team have turned it around in a very short time. Now I have every confidence in it. The wholesale customers coming in to see the brand say it’s the Olsen they recognise, yet it’s still designed for today.” Wholesale order values are up 35% for spring 15 compared with spring 14, she adds. “That tells us this is the right collection.” The plan now is to grow Olsen organically in the UK, focusing on independents.
McHardy is also responsible for Sandwich and Turnover in the UK and Ireland. The group will launch Dept - which it bought in December 2012 - as a wholesale brand here in about a year’s time. “We decided to take Olsen into the UK ahead of it, because Olsen was already here,” says McHardy. “I like to do one brand at a time, focus on it. I didn’t want to overstretch our resources.”
Sandwich is Veldhoven’s largest brand in the UK, with turnover in 2013 of £9m and 400 UK and Irish stockists including John Lewis and independents such as Jarrold in Norwich and Caramel Clothing in Honiton and Exmouth, Devon. Despite its recent troubled history Olsen isn’t too far behind, turning over £5m in 2013 and with 300 stockists including Fenwick, Elizabeth Rose in Tenterden, Kent, and home-shopping retailer Gray & Osbourn. Turnover’s sales are at the £1m mark and it has about 50 stockists, with Gemini Woman in Stratford-upon-Avon and Willow in Petersfield, Hampshire, among them. Together, the three generate £15m in the UK - or around 9% of Veldhoven’s total business, which amounts to just under €200m (£160m) across all markets. McHardy says she “absolutely plans to grow Olsen” so it rivals Sandwich’s sales.
She explains one of the reasons she encouraged the Olsen acquisition was because it adds a more classic, commercial look to the portfolio. The three brands complement each other, she believes: “They’re all aimed at the mid-market womenswear sector but they all go after different women. We don’t want to cannibalise our own business.”
The redesigned Olsen collection, which is aimed at the 50-plus market, features clean lines and simple tailoring, with a mid-level average wholesale price of £25 to £43 for a dress (see box, previous page). Sandwich is more casual and slightly younger, showcasing distressed fabrics, special washes and layering. Turnover is more directional and aimed at younger women aged 35 and above. McHardy describes the look as “much chicer”; it is also the most expensive at £43 to £70 for a dress.
Dept, when it comes to the UK, will add an edgier look, targeting women aged 28 to 30 and priced lower at £25 to £36 for a dress. McHardy is preparing for the challenge of launching the brand in what she acknowledges is a “very competitive sector” in the UK.
Veldhoven’s brands all have design studios in their countries of origin - Sandwich, Turnover and Dept in Amsterdam and Olsen in Hamburg - and its headquarters moved to Zug in Switzerland following the merger with Olsen. “There is a big integration project under way,” says McHardy. “Our strategy is to have a base from which we can service all the brands, so if you’re doing business with any one of them you get the same level of service and type of business agreement, across all countries.” In the UK, the Olsen team has moved into Veldhoven’s showroom in Parsons Green, west London.
Olsen is the only one of Veldhoven’s brands to have a transactional website in the UK, although McHardy says more will be added within the next few years. But Veldhoven is careful to position its retail business so it will not encroach on its wholesale operations. In the UK, it only retails through the Olsen website and Sandwich’s three concessions in House of Fraser in Glasgow, Manchester and Cheltenham; there are no plans to open standalone Olsen stores at this point. As McHardy puts it: “There’s still a lot of [wholesale] business to go out and get.”
McHardy says her main focus over the coming months will be to grow wholesale and launch Dept in the UK. The company’s overall expansion plans have yet to be firmed up, but she is not ruling anything out. “All of our brands have room to grow [in the UK].” She laughs when asked whether Veldhoven is looking to acquire more brands. “A lot of people ask that, but no, not at the moment,” she says. “Although Martijn is an entrepreneur, so never say never.”
At a glance VeldhovenGroup Brands trading in the UK.
Description Classic German brand aimed at 50-plus women.
Adjacencies Gerry Weber,
Sales in 2013 £5m.
Number of stockists 300.
Wholesale dress prices £25 to £43.
Wholesale knitwear prices £18 to £36.
Description Contemporary Dutch brand at upper end of the mid-market.
Adjacencies The Masai Clothing Company, White Stuff.
Sales in 2013 £9m.
Number of stockists 400.
Wholesale dress prices £29 to £47.
Wholesale knitwear prices £21 to £43.
Description Trend-led Dutch brand aimed at women over 35.
Adjacencies: Filippa K, Bruuns Bazaar.
Sales in 2013 £1m.
Number of accounts 40 to 45.
Wholesale dress prices £43 to £70.
Wholesale knitwear prices £36 to £68.