Mittelstand

Luxury skiwear maker Bogner heads downhill fast

Sotschi 2014 – Eröffnungsfeier
Last place in the Olympic fashion parade. Source: dpa

As fashion crimes go, it was up there with the worst of them. At the opening parade of the 2014 Winter Olympics in Sochi, Russia, in front of a live audience of hundreds of millions, the 150-strong German team emerged wearing official outfits that one commentator described as looking like “puked-out vodka.”

Colorful wasn’t the word. The clothing, made by traditional German winter sports outfitter Bogner, comprised coats of pastel rainbows and red floral snow trousers with matching hats. It wasn’t subtle, and it wasn’t popular.

Bogner has yet to recover. The reputational hit saw it lose the official clothing rights for this year’s Games to sportswear giant Adidas, after 82 years of supplying the German team. Commercially, it is also being swept aside. The luxury brand’s sales have been shrinking for years, declining to €152 million from €185 million just a few years ago. With the company now considered hopelessly outdated, its fan base is melting away. Management is also heading for the door, with two seasoned executives having fled the supervisory board at the turn of the year.

They were supposed to have given the company stability and direction – and reined in owner Willy Bogner. Mr. Bogner, a former professional skier with a love of the limelight, is unable to let go as he drives his life’s work into an abyss. Bogner has become the tale of a tragic patriarch, a man whose downfall is on full display. Only a management miracle can save it.

Mr. Baumgärtner may have to head off piste to salvage this rapidly descending brand.

Bogner was once considered avant-garde. Founded in 1932 by Mr. Bogner’s father Willy Bogner senior, it is credited with inventing “athleisure” – the fusion of sport and everyday fashion. With skiing taking off as a leisure pursuit, anyone who could afford it headed to the slopes in a Bogner jacket. The company boomed.

After his father’s death in 1977, Mr. Bogner took over the helm. The skier and Olympian had been dreaming of a life in the film industry after his sports career, but instead successfully turned his role at Bogner into a platform by combining film and fashion. He became both boss and face of Bogner, honing his instincts as a showman. He helped film ski scenes in several James Bond movies, and also kitted out Roger Moore in Bogner clothing in the 1981 Bond movie For Your Eyes Only.

For a long time, the brand benefited from its daring front man. It could command significantly higher prices for its famously colorful jackets and suits – and customers, especially Russians, were only too happy to pay. But the sharp decline in the ruble contributed to declining sales. Attempts to compensate for this in other markets, such as the US, failed. “As a niche supplier, it is difficult for us to compete there with a giant like Ralph Lauren,” Mr. Bogner once said.

The owner admitted there was a need for change in 2016. After 40 years as head of the firm, he handed control to manager Alexander Wirth. He tackled many things that Mr. Bogner had neglected for years, such as sifting suppliers, restructuring and closing some stores. But he also made the mistake of hogging some of the company’s limelight, normally Mr. Bogner’s job. It didn’t go down well. “Willy Bogner finds it hard to share the spotlight,” said a source who knows Mr. Bogner well.

Mr. Wirth’s was also reportedly hemmed in by his contract, which stipulated that he was not allowed to make investments of more than €50,000 outside the approved budget. It was never going to end well, and in November 2017, after less than a year, Mr. Bogner parted ways with Mr. Wirth over “differences of opinion over the direction of the company.”

Now, Bogner is staking everything on a change at the top. Andreas Baumgärtner, who only joined Bogner last year as design director, became CEO this month, and could be the firm’s last hope. He has an impeccable reputation in the industry. He was formerly a designer at Hugo Boss and head of high-street fashion chain Marc O’Polo, where he turned a relatively small business into a company with sales of over €460 million while dealing with another difficult owner.

But Mr. Baumgärtner has plenty on his plate. Brands such as Moncler, Canada Goose, Woolrich and Peak Performance “are passing Bogner on the left and right,” said an industry expert. Young customers have also abandoned the brand, and then there’s the owner. Mr. Bogner has the power to hire and fire at will, a fact that led to the recent boardroom resignations. “In public, play it cool and let Willy go first,” is Mr. Baumgärtner’s policy.

There are also unwelcome sideshows. Bogner has accused Mr. Wirth of violating his contract and using company funds to pay for a VIP lounge at soccer club Bayern Munich, while insiders have told journalists that management may have evaded taxes.

A new supervisory board chairman in the shape of former BMW, Ford and Linde executive Wolfgang Reitzle may help to turn things around, but Mr. Baumgärtner may still have to head off piste to salvage this rapidly descending brand.

 

A longer version of this article originally appeared in the business magazine WirtschaftsWoche. To contact the author: online@wiwo.de

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