Gsus Industries, the Dutch company launched in 1993 as a wholesale and retail operation, is preparing to spread the brand's gospel in the U.S.
In its beginnings, the company showcased the Gsus-branded streetwear collection in a store christened Heavens Playground. Since then, the Gsus brand has grown to be distributed to 2,000 doors and the Heavens Playground format has expanded to 14 boutiques in 10 countries, including Japan, Russia and the United Arab Emirates. Gsus Industries is now a $60 million business. The U.S., however, represents the brand's greatest opportunity — and likely its biggest challenge.
"America is challenging, but is important because the whole world is looking at it," chief executive officer Peter Steenstra said in an interview at the company's new Garment District showroom in Manhattan.
Steenstra has a passion for entrepreneurship. He left a corporate career with IBM to jump into the world of fashion and retail, becoming partners with designers Jan Schrijver and Angelique Berkhout, who is his wife, and opening their first store in Arnhem in the summer of 1993.
The transition between these seemingly disparate careers was a natural one, said Steenstra, who characterized IBM as the place where he proved himself and earned his management stripes.
"If you're an entrepreneur, you make it work," he said.
Steenstra and his U.S. management team understand that making it in the U.S. will be a step-by-step process. They kicked off the effort last July, opening showrooms in Los Angeles and New York. Six months ago, the company's first North American store launched in Vancouver. Corey Hayward, vice president for Gsus USA, said the U.S. headquarters has been moved to New York from Los Angeles to better position Gsus as a global brand.
"There's more visibility here and New York is more international," Hayward said.
Expansion efforts will occur both on the retail and wholesale fronts. The Gsus brand is sold in about 100 doors in the U.S., including Villians in San Francisco and Emerald Rose in New York. Peter Smit, president of Gsus USA, and Hayward intend to expand to 200 to 300 doors over the next two to three years."We want to grow business with the stores and then open our own Heavens Playground stores," Hayward said.
The company plans to open four Heavens Playground stores in major markets during the same two- to three-year period. The search for the location of the first U.S. flagship has taken more than a year and is centered in New York. Several bids have already been placed on retail spaces in Manhattan's SoHo shopping district, and management anticipates opening by fall 2008.
The format will not change from the company's current model, with Gsus-branded merchandise typically accounting for 70 percent of the store's product and the rest consisting of brands the company views as complementary to its character. Denim will retail for $135 to $195, T-shirts for $55 to $185 and outerwear will range from $140 to $425.
Steenstra acknowledged that, in contrast with Europe, U.S. boutique owners are quick to buy a label after seeing it and can be even quicker to drop the brand should it fail to generate business soon after hitting the shelves. The executives hope to change that mentality and prove the value of developing long-term relationships.
"We're looking for partners," Steenstra said. "I think that's going to be the solution for the retailers."
He noted that boutiques face increasing competition from fast-fashion giants such as Hennes & Mauritz. In addition, catering to the American consumer presents a challenge, Smit said.
"In Europe, you see people looking for things that nobody knows," Smit said. "Here, it's people looking for stuff they've already seen."
They'll also face stiff competition from brands such as Miss Sixty, Fornarina and Diesel.
Steenstra shuns traditional methods of marketing, describing celebrity-driven campaigns and paying for prominently placed billboards as "shooting with air." Instead, the company opts for more guerrilla-style tactics.
For now, brand awareness is being developed through the sponsorship of parties, DJs and bars, but another idea being considered for a future fashion week involves hosting a runway show on the bed of a truck.
"You need to be a little more creative," Steenstra said.
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