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The Drapers Interview: Marc Cain

Investment and innovation have allowed German brand Marc Cain to grow into a global success story.

Not even the heavy German rain can detract from the impact of the Bodelshausen headquarters of Marc Cain, a global womenswear brand which has seen its turnover triple in the last ten years. Surrounded by manicured lawns - tended to by a white robotic grass trimmer - and two lakes lined with sun loungers, the modern curved white building is an impressive sight.

Inside too, nearly everything is in an on-brand shade of white, even down to the Marc Cain-branded fire hydrants. It’s here I meet Helmut Schlotterer, the man who founded the brand in 1973, together with creative director Karin Veit and head of distribution Thomas Herter.

It’s a busy time for the trio. This year marks the 40th anniversary of the brand, which invested €70m (£59.1m) between 2007 and 2012 in new production and administration headquarters equipped with the latest apparatus and machinery.

“We’ve sold a lot of our older machines, not because they were broken but because they didn’t understand the new software. And knitting at this level requires the latest software, so they had to be updated,” Schlotterer says, as we tour the facility.

Marc Cain’s forward-looking nature and continued drive to refine its processes and improve efficiencies has allowed the brand to keep 95% of production in the EU. Marc Cain employs 800 people at its headquarters and undertakes 11,000 hours of development work annually to optimise pattern techniques.

The brand sources its fabrics from Italy and the knitting, finishing and printing are completed at Bodelshausen. Only the final stage of sewing together the garments’ parts is outsourced to factories in Romania, Hungary and Portugal, where 2,000 people work for the brand.

Schlotterer says he believes this adds to its appeal: “In my eyes we didn’t communicate this enough in the past.

There was a big discussion in the German newspapers about the Bangladesh crisis and not once was our company mentioned as a good example. So I realised that we have to focus more on our corporate communication. We need more transparency in our production process.” With the recruitment of new head of communications Nina Kron, the company plans to rectify that. Herter says buyers confirm provenance is an issue. “When a consumer sees that a premium product at £200 to £350 is made in China it makes them reluctant to buy,” he adds.

The brand has also invested in a knit-and-wear machine, which will produce a completely knitted and assembled pullover. This means it can claim to make some garments 100% in Germany.

And the brand isn’t standing still. Outside of Schlotterer’s office window, a construction site sits in the middle of Marc Cain’s 452,000 sq ft plot.

In June the brand began the construction of a 75,000 sq ft logistics centre, which will have a holding capacity of approximately 500,000 items hung on clothes hangers, along with 1.25 million flat-pack items. The project is costing €30m (£25.3m) and the construction phase will last until the end of 2014, with the fully automated warehouse due to be operational by spring 2015.

This will help to better service Marc Cain’s large domestic and international business - 60% of sales are overseas - selling through 176 Marc Cain standalone stores globally, 309 shop-in-shops and 941 wholesale accounts in 59 countries.

Russia and China are both key markets and Schlotterer says sales in these countries are “growing season after season.” And international expansion is continuing at a pace: the brand has 15 further store openings planned, including two in the Republic of Ireland - one in Malahide near Dublin and another yet to be confirmed.

Herter adds that the UK is firmly on the agenda and is performing “above average”. He says: “The reason for this massive increase is because we opened our own showroom two years ago at Devon House on Great Portland Street and began working with our agent Sarah Morgan.

The showroom is fitted out like our stores and this was a really important step for us because we have 105 buying accounts per season, and now when they come to see us they enter a Marc Cain world.”

At present the brand doesn’t sell in any UK department stores, but Herter says this is part of its long-term ambitions: “We still have big potential in the UK compared with other EU countries.”

Of course, this success is very much down to the product. Marc Cain produces three ranges, the slightly dressier Marc Cain Collections and activewear line Marc Cain Sports (wholesale prices for both lines range from £24.64 to £135.35), and classic line Essentials (£21.07 to £85.35). These are delivered into retailers via 11 drops per year.

Herter says that by continually delivering fresh product, the brand and its retail partners can avoid discounting. “If all of these beautiful brands are 50% off then why would someone pay full price? Our fans are not stupid. However, we deliver new merchandise to our customers every two weeks, so the consumer will still pay full price.”

This seemed to ring true with the stockists Drapers spoke to. Claudia Sebire, who has been stocking the brand at her eponymous womenswear store in Chelsea for 25 years, says while spring 14 wasn’t her favourite collection, she still “bought lots of great pieces”.

“Marc Cain has a following and performs consistently each season. It is a very well-oiled German machine and very straightforward to work with. The fit is consistently good. You can sell it from a size six to 16 and there aren’t many brands you can do that with. The jeans are great and the leather is probably the best on the market.”

Jane McCoy, owner of Bibi & Mac, which has three stores in south Devon and began stocking the brand for spring 13, agrees. “The leather is expensive, but sells well and is a great window piece,” she says.

“Taking on the brand was quite a leap for us, because there are cheaper brands. But it has been really popular in store with an 85% sell-through for spring 13. I’d say it’s going to be up there with our bestsellers.”

Financially Marc Cain, which saw turnover hit €223m (£188.4m) in 2012, is performing well and it forecasts turnover will rise by nearly 9% to €243m (£205.3m). EBIT has shown a healthy increase too, rising from €34.4m (£29m) in 2011 to €46.7m (£39.4m) in 2012.

When asked what the secret of the brand’s success is, Schlotterer says: “We are never satisfied, we are always working on the next step. Whether the battlefield is marketing or production, we have to be better than our competitors.”

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