BERLIN — Germany’s moderate fashion manufacturers are on the fast track.

They said speed and logistics are the key to survival in a slow and shrinking retail market. A minimum of 12 deliveries, coupled with frequent flash programs, have now become the norm in the German mid-priced fashion sector.

Partnerships have also become crucial, as both manufacturers and retailers actively join forces to counter vertical competition.

"Everything is speed today," said Michael Rosenblatt, chief executive of Tom Tailor, based in Hamburg. "The biggest challenge is how quickly you get from the design studio to the consumer. We pump out a new collection every month, which is in the stores 90 days later."

After monitoring sales results, Tom Tailor also offers fast-reaction programs that get top-selling items onto the sales floor in four to six weeks.

But it’s not only speed that counts.

"If you don’t perform, forget it," Rosenblatt said. And to make sure that’s the case, "we do the merchandising and buying for our customers. We talk about the budgets and do all the buying plans. We do the work."

It’s also necessary to "watch price points carefully," he advised. "The German market is very price sensitive and today’s consumers will compare your products with the H&Ms of the world. That’s our big competition. Not other brands."

S. Oliver was one of the pioneers of vertical thinking in the German apparel market and its 12 quick-delivery collections for women, juniors, men and children generated sales of more than $700 million in 2002. All dollar figures are calculated from the euro at current exchange rates.

The S. Oliver Woman’s range closed the most recent selling season in early February, for June, July and August deliveries, 20 percent ahead, and the company’s second moderate women’s range, Comma, booked a 60 percent gain in 2002.

That, despite the fact that Germany, "one of the worst markets to be in at the moment," said Andre Maider, director of marketing and design, currently generates about 80 percent of S. Oliver’s sales.One factor spurring growth is a widespread "trading down" on the part of German consumers.

"The mid market is fed by people who previously shopped better-to-higher ranges," Maider said. "They’re coming down for financial reasons for they can spend 20 to 30 percent less. But it’s not only that consumers don’t have the money. They just want to spend that money differently."

So do German retailers. Sixty percent of a typical S. Oliver retail budget now goes to the company’s four order collections covering 12 delivery dates, Maider said, while 20 percent is allocated to the recently introduced "Added Value" programs, which have a longer lead time and offer higher margins.

Ten percent goes to "Hot Shots," small, monthly merchandise groups to order now, for example, for early April delivery, and 10 percent to NOS (Never Out of Stock) programs.

"At the end of the day, our 12 divisions do 30 annual collections and over 40 million units yearly," he pointed out.

In 2001, the Steilmann Group, a $500 million moderate market force, changed all collections to speed programs, chief executive Britta Steilmann noted.

"The sales staff was very nervous, but at the last CPD in February, we sold spring-summer merchandise equally with fall-winter, so we see that German retailers are really practicing quick response," Steilmann said.

There’s been a sea change in the moderate market, however.

"Ten years ago, the retail focus was on clear product departments. But stores are moving to lifestyle worlds," she said. "The challenge is that each lifestyle world has multiple faces. You need to talk intensively with each retailer about their target customer group.

"And you have to straddle the classification barriers. For example, if you want to present cargo as a theme, with not just pants but vests and blazers, which department do you talk to?

"The stores doing it successfully, like C&A, have fashion themes which they cross buy," she added. "And we’re working especially hard to coordinate our classifications departments."

The name of the game is "partnership, partnership, partnership," Steilmann continued. Steilmann’s core classifications business is all private label in Germany, but under its "brand partner strategy," it treats private label as a brand for its major retail partners."We’re much more targeted," she said. "We really work with buyers on pricing strategy [and] consumer targets, and through electronic data systems, we constantly have information on what’s selling or not."

Steilmann, Maider and Rosenblatt all forecast a further concentration in both the retail and manufacturing market in 2003. But it’s not all gloom and doom.

"My main message for Germany is that there are retailers who are actually changing their stores every 10 days, getting in new merchandise to present new stories, and they’re extremely successful," Steilmann said. "You have to be more price conscious, even at the higher end. But if you have the right product mix, you can be successful."

The 184-German-door C&A chain is a case in point. Once again a primary force in the German moderate market, alongside H&M, which caters to a more fashion-forward customer, C&A turned around a decade of falling sales by refocusing on mainstream fashion at friendly prices. A massive refurbishment program also allowed C&A to present this fashion in a more comfortable, easy-to-shop environment.

"In Germany, you need a concentration on price in combination with fashion," said C&A spokesman. "Our message is value for money. There are millions of German women and men that like mainstream fashion, and if you have a very good product at a very good price, it will be a bestseller. You can create bestsellers in a bad market situation."

Short lead times, he continued, are one of C&A’s key success factors, and the chain has shifted to more East Bloc versus Far Eastern suppliers to ensure a faster turnaround.

"You have to be very quick," he said. "We offer new merchandise weekly in our entrance areas, and much better stock control gives us the possibility to have better and higher turnover speed — a key to success."

Compared with an 8 percent downturn in the overall German retail market, C&A generated a plus both in sales and profits in 2002, with sales estimated at about $3 billion in Germany.

"Our first priority is to grow sales on existing square meters, but our second is to look for chances to grow via derivatives," the spokesman noted.C&A recently introduced children’s-only stores in smaller towns where the company didn’t have a retail presence, and will now similarly launch a 4,300-square-foot women’s-only store in Lindau in April.

"We have 70 to 80 percent female customers buying for themselves and their kids and it’s a huge and very interesting target group," he added.

The shop will offer the C&A Clockhouse juniors collection, the updated mainstream Yessica range, XL for large sizes and lingerie — all merchandise areas identified by C&A as having the greatest overall growth potential.

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