Fashion Expansion

The Emperor's New Clothes

A piece of Westphalia. Source: DPA
Gerry Weber aims to hang on to its traditional fashionwear while expanding into new markets.
  • Why it matters

    Why it matters

    The acquisition of Hallhuber will catapult Gerry Weber into the top five of German fashion and lifestyle companies.

  • Facts

    Facts

    Firm founder Gehard Weber stepped down as chairman in October.

    The company will open six stores in Canada next year.

    A new TV campaign is aimed at rejuvenating the brand.

  • Audio

    Audio

  • Pdf

The new board, which took over in October, isn’t wasting time to make its mark, announcing the acquistion of a rival brand on Monday.

“Hallhuber is just at the beginning of its potential for development,” chief executive David Frink told Handelsblatt.

The acquistion will catapult Gerry Weber into the top five fashion and lifestyle firms in Germany, and help the company target women in their mid-20s and older.

For the current year, Hallhuber expects sales of €140 million ($171 million) and €14 million in earnings before interest, tax, depreciation and amortization, or Ebita. The company has 1,500 employees and operates 94 retail locations with 12 outlet stores.

Expanding into new sectors is also part of Fink’s new strategy. “We want to enter the men’s clothing business,” he said.

The plan, however, is not to compete with Hugo Boss, Germany’s largest maker of men’s suits, but offer leisure clothing instead. Mr. Frink said he aims to buy an existing label to further develop and produce in-house.

Purchasing others brand is new at Gerry Weber. It was not a strategy pursued by the firm’s founder, Gerhard Weber, who stepped down as chairman in October to join the advisory board. He was primarily focused on developing his own label, building up the core Gerry Weber brand and the additional Taifun brand for younger women and Samoon for plus-sized clothing.

Men’s clothing could help further internationalize the company, which, like many other German fashion brands, has a relatively limited presence outside the country.

“Canada is the toehold into the American market for us”

David Frink, Gerry Weber management spokesman

“Foreign groups such as Inditex with brands like Zara and Massimo Dutti are already much further along,” said Franz Maximilian Schmid-Pressler from the management consultancy of the same name.

“Gerry Weber has great opportunities for growth by internationalizing particularly outside of Europe,” said Christoph Schlienkamp, a consumer goods expert at Bankhaus Lampe in Düsseldorf. In the 2012-2013 financial year , Gerry Weber generated 39 percent of its total sales of €852 million outside of Germany for the first time.


Video: making of the Gerry Weber spring/summer 2014 colection photo shoot .

Next year, the first six flagship stores will open in Canada. “Canada is the toehold into the American market for us,” Mr. Frink said. For 2016, he plans to enter the U.S. market with stores on the West Coast.

Another focus of the new management team is to rejuvenate the brand.

Ralf Weber, the son of the firm’s founder and responsible for sales and corporate development,  said he wants “to significantly increase the brand awareness with targeted TV and marketing campaigns and to build up Gerry Weber, Samoon and Taifun into international lifestyle brands.”

A few months ago, the company launched a huge TV campaign with a song by Bryan Adams and a collection of fashion was shot in New York City.

 

Georg Weishaupt is a reporter for Handelsblatt. To contact him: weishaupt@handelsblatt.com

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