Fashion: This year is a tough test for German fashion companies

Fashion: This year is a tough test for German fashion companies

Esprit, Tom Tailor, Gerry Weber & Co. 2020 is a tough test for German fashion companies At the start of Fashion Week Berlin, a study shows that the fashion industry is facing a difficult year – especially in the middle segment, where German manufacturers are positioning themselves. Chinese companies, on the other hand, are rising. Wolfgang Joop has bronchitis. For this reason, the designer could not be part of the discussion at the Hotel Zoo am Kurfürstendamm, to which the management consultancy McKinsey had invited. At the start of the Fashion Week, Joop would have been a good conversation partner, because with his latest announcement that he was relaunching his fashion brand “Looks by Wolfgang Joop” these days, he symbolized departure. And the fashion industry can currently use a spirit of optimism. According to the new McKinsey study “The State of Fashion”, the fashion industry is not facing a particularly good year: For 2020 McKinsey expects growth of only three to four percent in a market of around 2.5 Trillion dollars. That is significantly less than the years before. In these, the market grew between 3.5 and 4.5 percent. “It will not be an easy year,” said Achim Berg, fashion expert at McKinsey. “But that is not yet a crash,” said Nick Blunden of the London-based online fashion portal “Business of Fashion”, who created the study together with McKinsey. For the study, Berg and Blunden 290 asked executives from the global fashion world about their forecast. Result: Only nine percent of the respondents believe that 2020 will be a better year than 2019. Last year 49 percent of respondents were still so optimistic. Now 60 percent fear a deterioration for 2020. When asked for three words to describe the fashion industry, the most common word was “challenging”. Former Hugo Boss boss Claus-Dietrich Lahrs takes over the management of the S.Oliver fashion company. This is brave: he is the fifth boss in five years – and company founder Bernd Freier is anything but conflict-averse. Of course there are also winners: In his study, McKinsey compiled a list of the 20 most successful fashion groups worldwide, sorted by economic profit (according to the consulting company, that is the Profit after deduction of the cost of capital). Compared to last year, the US sporting goods group Nike (sales: around 35 billion euros) solved the Spanish fashion group Inditex with the brands “Zara”, “Massimo Dutti” and “Pull & Bear” (sales: 26, 1 billion euros) at the top. This is followed by the French luxury conglomerate LVMH with the fashion brands Louis Vuitton, Dior, Marc Jacobs, Givenchy and Kenzo (total sales: 46, 8 billion euros), the US low-cost provider TJX Companies with the expanding chain TK Maxx as well as the two luxury groups Kering (including Gucci, Balenciaga, Saint Laurent) and Hermès. Remarkable: For the first time since this list of winners was collected, two Chinese fashion companies are among the best 20: On place 13 is the sporting goods group Anta Sports from Jinjiang (turnover: around 1.9 billion euros). 2019 the Chinese had taken over the Finnish sports group Amer Sports with the brands Atomic, Salomon and Wilson. Anta Sports has been operating the Fila brand in China since 2009. The rank 16 is followed by HLA Corporation, the fashion branch of the China Heilan Group 1988. The only German representative in this list of winners is eighth in the Herzogenaurach sporting goods group Adidas (turnover: 21, 9 billion euros). Of course, that was a little bit for an economically strong country like Germany, also criticized Achim Berg. He also indicated that the establishment of luxury conglomerates such as LVMH, Richemont or Kering in Germany was “not the next logical step”; on the other hand, Berg highlighted the remarkable rise of the two online fashion retailers Zalando and Aboutyou. Both still very young companies – Zalando was founded 2008, Aboutyou 2014 – have already expanded successfully. Esprit, Gerry Weber or Tom Tailor: The clothes stay in the stores. Many large German fashion companies suffer – but what do people still attract? Who benefits from the crisis. According to the study, the problem of many German fashion manufacturers is their positioning – neither luxury nor cheap – and their lack of expansion, especially in those markets that are still growing. These are mainly found in Asia and Eastern Europe and in some African countries. The fashion experts are not surprised by the numerous bad news from German tailors such as Esprit, Tom Tailor and Gerry Weber. S.-Oliver from Rottendorf has also been struggling for years, recently hiring the former Hugo Boss and Bottega Veneta boss Claus-Dietrich Lahrs. For such fashion providers in the middle price and quality segment, the leap into the upper class, where profits are bubbling, is extremely difficult: McKinsey puts the probability at a depressing ten percent. And the squeezing of the middle-class brands will continue 2020, writes the consultancy. But not all German fashion manufacturers are in a bad mood, as Vogue Germany editor-in-chief Christiane Arp pointed out. The main thing is that a brand develops an independent design with recognition value, she said. Arp cited the Frankfurt designer René Storck, William Fan and “Rianna + Nina” from Berlin and the “Horror Vacui” brand by Munich designer Anna Heinrichs as exemplary in this sense. But these positive examples also have to prove themselves in a fashion market that 2020 will be one thing above all: “challenging”. © Handelsblatt GmbH – All rights reserved. Acquire usage rights?
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