DUSSELDORF — The crying game may be nearing an end, as Germany’s beleaguered apparel market finally shows signs of turning around.
German women’s wear manufacturers, especially in the upper levels of the market, say business is improving despite sluggish consumer demand, ongoing retail consolidation and the overall weakness of the domestic economy. And, while traffic was off at the CPD trade fair, which closed here Aug. 3, many manufacturers and observers said the mood in Düsseldorf was nonetheless clearly up, thanks in part to next spring-summer’s feminine and color-infused collections.
About 48,000 trade visitors clocked in at the Düsseldorf fairgrounds for CPD, compared with 55,000 in August 2003 and 53,000 in February 2004. The Igedo Company, organizers of the show, and the multitude of companies and agencies that present their collections in showrooms throughout Düsseldorf finally entered into a new alliance and there were efficient shuttle services between the fairgrounds and the city. Igedo estimated that 60,000 buyers were in Düsseldorf during the three-day event.
“The German market’s turned around,” said Uwe Jürdens, director of St. Emile, the Kleinwallstadt-based women’s wear company. “We began feeling it last season, and the way things are going at retail now confirms it. We hear from everyone that the mood is better. Consumers don’t only want to be stingy,” he remarked, alluding to the popular “Geiz ist geil” or “Miserliness is cool” slogan of a leading German electronics chain. “Shoppers are finding pleasure again in beautiful things.”
St. Emile booked 8 percent more sales in the first half of 2004 and Jürdens said, “We’re absolutely sure there’ll be further growth in the second half.” Buyers are writing deeper orders for next spring-summer, he added, with “the biggest growth coming from customers we’ve worked with for a long time. The concentration at retail is continuing.”
Retailers were responding most strongly to “everything that’s feminine. It can be through a Swarovski button, a ruffle….What’s important is the break between sporty and elegant, shiny and matte, and every style must have a fine detail,” he said, pointing to the white running stitch on an apricot cotton blazer, or the jeweled button on a tailored, dark denim jacket.“Business at the moment and for all of 2004 has been very, very good,” commented Thomas Schaefer, chief executive of René Lezard. “It’s all about fabric, color and cut, and the mood is distinctly positive. Perhaps not for all companies,” he quickly added. “There are firms still in a bad way, but also others where it’s fantastic.”
Lezard’s own shops have experienced “extreme growth,” he said, “and we see that where the collection makes a statement, it really works.”
Retailers also have become more flexible with their open-to-buys, Schaefer noted. “There’s a willingness to go beyond the original limit. When they like the collection, those with a smaller budget see they must buy more. And when every customer writes 10 to 15 percent more, we’ll be very happy.”
Colors have been extremely important for spring, and “everything that’s pragmatic isn’t selling.” Dresses are going into a third strong season, often being shown with matching jackets, and interest in tailored ready-to-wear and suits is picking up, he said.
Natalie Acatrini, design director of Boss Woman, also said the suit “has become chicer and I believe in a complete look for a high-fashion woman next spring: say a suit, a great silk blouse and a super pocketbook to go with it. The overall look is less casual, and when it is casual, it’s with elegance, like a ribbon bow for a belt, or a special T-shirt and a bag. Everything must be superchic.”
On the business side, Boss ceo Bruno Sälzer said the German market, “as far as we can see, was still down for the first six months, but we’re more confident for the rest of the year. If you ask what are the facts, there is no change. But people are fed up with negativity and think things have to be better.”
Boss Woman’s sales were up almost 50 percent in the first half of 2004, “and the good thing is that the sell-through in our existing doors has been very good. In Germany, we are number one in sell-through, and that gives you a sign for future success.” Most of the growth has been with existing doors, “but you can’t achieve 40 percent growth that way alone. So growth in the second half [of 2004] will be with new customers, too.”Sälzer noted, “The fashion direction itself, not just for us, has become more attractive for a real consumer. As a designer, you can always think of an ideal consumer, but there are not enough of them out there. You have to be commercial, but in an innovative, creative and surprising way. Spring is colorful, optimistic and positive, which is perhaps contributing to the turnaround mood.”
“Germans tend to be melancholy,” he went on. “But now they realize that they’re like that and that it’s not helpful. Even if business is still not so good, they talk about it more positively. Fifteen to 18 months ago, they’d be talking about the same situation in a much more negative way. And if 50 percent of the economy is psychology, this is very helpful,” he remarked.
Escada’s ceo, Wolfgang Ley, also sees a slight shimmer on the horizon. “After two difficult years, orders in euro for spring-summer in all divisions are a little bit up. And for Escada’s main line, orders for spring-summer are up 7 percent in euro, year-on-year, even after restructuring and closing stores.
“You can only win if you’re a niche player. Everything fashion is selling, and there’s been a comeback, fortunately, to quality, sportive elegance, lots of details and color, color, color,” Ley added. “You can see every month it’s improving, and the results are more healthy. We’ve done our homework and the best accounts are either coming back or focusing on Escada. Under the circumstances, we’ll be able to show a nice little growth next year. Nothing sensational, but solid.”
Stefan Hartmann, sales manager at the women’s rtw specialist Trixi Schober, also noted the mood has lightened in Germany. “Our customers are writing wonderful orders, and are open to beautiful merchandise. Many stores are still closing, and other companies in our genre are disappearing, but it’s been good for us. Our turnover has grown in the last year — winter was very, very good and spring has also started very well.”
The current trend toward more elegant and dressed-up looks has been a boon for the company, which is known for well-tailored coats and suits. “Retailers bought more suits for winter,” Hartmann reported, “and we’re seeing that dresses are a big theme for spring.” Nevertheless, the look is not business as usual, with colorful silk tunic coats paired with slim linen pants, printed blazers and coats in linen or cotton worn with boldly colored and sometimes printed dresses and pants.But while upscale companies were more optimistic, the outlook isn’t so bright in Germany’s moderate market. “As long as midmarket companies like us depend on the German market, we can’t get innovation into our collections, because German retailers don’t want innovation,” said Frank Gouder, general manager of Passport, based in Böblingen. “This turnaround is difficult to do, as Germans tend to be 100 percent this way or that way, and there’s no sign things are getting better. For us, it means we have to expand in export,” he said.
He said Passport, a T-shirt and knitwear specialist, was “learning to complete the collection with accessories and shoes to tell the story. It’s important to tell the story to the consumer, especially as there are fewer and fewer salespeople in the stores.”
Ute Steilmann, ceo of the Steilmann Group, a leader in the moderate and private label segment, said retailers are “interested in fashionable items, and if we have fashion, he’s writing his order.” There have been shifts in buying behavior, however. She said that, in Germany and in Europe as a whole, “people are waiting, and moving from pre-programs to the CPD ranges. At the same time, the export departments have increased their business with flash programs, which three years ago were not salable at all.”
She said existing customers were writing more per order, and Steilmann was attracting new customers, as well. The giant enterprise, which has slimmed down considerably in the last few years, cutting personnel and other expenses nearly 50 percent, is banking on color and a more focused, upbeat assortment to push sales ahead for spring.
“We have bright, fresh and optimistic colors, and people like to see color,” Steilmann said. From a fashion standpoint, she said people were beginning to write orders for single blazers again, which Steilmann is offering in colors and prints for spring. Business suits, more fashionable in a slim fit, also were meeting with positive response, and jeans “are coming back like crazy. It’s been amazing, and we’re not jeans suppliers,” she said.