Having adjusted to climate, color and buying needs, the German sportswear line penetrates the U.S.
This story first appeared in the October 2, 2002 issue of WWD. Subscribe Today.
The United States may account for 3 percent of total sales, but when you’re a $150 million German sportswear giant, it starts to mean real money.
Slow, healthy growth has been the best strategy to for Hamburg-based Olsen to gain ground in the massive U.S. market, said Michael Wolff, the company’s chief executive officer. Wolff’s grandfather, Alfred L. Wolff, started the company in 1901 in Hamburg, Germany, as an importer of food, spices, perfumes and cosmetics. The ladies’ fashion division, which was primarily driven by its knit tops, launched in 1959, and soon expanded into sportswear under the label Olsen, with sales throughout Europe.
The U.S. push began in 1993, after a North American headquarters was set up in Toronto in 1992. Europe tallies around 85 percent of sales, Canada 10 percent, with the remainder coming from Asia and the U.S. .
Business in the U.S. is a different animal that requires a different approach than European markets. Adjustments to the U.S. business climate and customer base was a process that took three years, said Wolff.
First, climate variations, as far ranging as the blustery chill in Chicago to tropical Miami, had to be addressed. The heavy wools, big sweaters and outerwear so popular in Canada and Europe had to be replaced with lighter weight blends and more year-round fabrics. Color, so important to Sunbelt retailers, was added. Fit and styling are similar in North America and Europe, said Wolff, although Olsen’s “European flair,” can be more classic and put-together than more casual, item-driven U.S. lines.
U.S. buyers have a plethora of lines to choose from, often sampling from many sources, whereas Europeans tend to buy heavily in a few collections. Items, rather than complete collections, are increasingly in demand in the U.S.
“European customers are more loyal,” he said. “U.S. buyers, with so many sources to choose from, are less focused.” Wolff advises buyers to carry around five resources, rather than trying to be “everything to everybody.”
Four collections a year offer 500 pieces each. Around half of that is offered in the U.S., with fewer basics and more fashion-forward groups that address trends such as lace and peasant blouses.
Avoiding department stores, the company has built a 300-store specialty account base in the U.S. Three stores including Four Seasons, in Athens, Ga., serve as signature stores with in-store shops. The other two are Donneckers, in Ephrata, Penn., which doubled its Olsen orders from $32,000 to $65,000 in the past two years, and Halk Merchandising Co., in Kansas City, Mo. The signature program was started in 1997 in Europe, where 450 specialty stores currently participate.
To qualify, stores have to do a sizable Olsen business and have at least 300 square feet to devote to the concept. Along with access to the complete Olsen line, the company provides support in visuals — which can range from signage to remodeling, along with point of sales materials, and sales/marketing educational seminars.
Olsen has quadrupled its U.S. marketing budget in the past four years. A main promotional push this fall is a contest to select three “ideal Olsen women” that will represent the company in advertising and personal appearances. Top U.S. sales people are also rewarded with trips to Germany.
In AmericasMart, Mark Garland, the principle of an eponymous multi-line showroom, is also a corporate sales representative for Olsen, which accounts for half of his showroom space and sales. Garland frequently travels to Olsen’s European and North American headquarters as well as specialty stores, where he hosts trunk shows or sales seminars. Olsen also has a corporate showroom in Dallas, and is looking to expand with regional marts.
“Regional marts, which bring in so many specialty stores, are the best way to get our message across,” said Wolff, who stressed the importance of establishing a corporate image through showrooms and sales reps that have a stake in the company, like Garland.