MAKERS BRACING FOR EUROPE IN ’97
Byline: Melissa Drier
COLOGNE, Germany — Retail bankruptcies. A saturated market. Indifferent customers. Price pressures. Escalating ad budgets.
That sounds like a description of the U.S. jeanswear market — but it also goes for the current denim climate in Europe.
Despite the sluggish sales of basic goods and the cumulative pressures of new competitors vying for fewer retailers, attendance at the Inter-Jeans trade show here was up by 5 percent, and vendors were optimistic that their strategies will result in growth this year.
Promotion and marketing is becoming as important to the Europeans as it has been to the U.S. market for a long time, and the women’s jeans market still has room for development, noted some vendors.
Inter-Jeans, which was established in 1980, is one of the top shows for the jeanswear category in Europe. Manufacturers such as Mustang GmbH chief Heiner Sefranek called it “the jeans show for both women’s and men’s,” and Chic/HIS Europe’s product manager Gunther Sommer deemed it “an absolute must.” Retailers from around the world shop the show to pick up trends, write business and check out new lines.
Vendors included U.S. and European jeanswear lines such as Lee, Wrangler, Edwin, HIS, Mustang, Diesel, Swish, Chevignon, Fiorucci, Gaultier Jeans and Closed. Guess exhibited at the show for the first time.
This edition featured 831 exhibitors in an 800,000-square-foot space and ran simultaneously with Herren Mode Woche, the men’s wear show. The shows had 50,000 buyers from 85 countries, and overall attendance was up 5 percent over the last edition.
The show has also become a forum for club and streetwear lines, and this edition included a new section called “Street Vibes” for those companies.
While retailers shopped for trends, vendors spoke of a difficult retail environment that recently had a major shake-up when Jeans Fritz, a 250-unit jeanswear chain, declared bankruptcy.
“There are other big operations, also with more than 200 doors, that are in big trouble,” said Mustang’s Sefranek. Mustang makes jeans under the Joop and Wild & Lethal Trash labels.
In addition to retail rumbles, there are promotion pressures involving top brands such as Levi’s.
“We’re still making a profit, but I’d rather accept a small decrease in sales than go along with reductions,” said Sefranek. “It puts pressure on us. Reductions are a spiral without end.”
Sefranek said he’ll be boosting his marketing and advertising budget in order to compete.
Lee is also ignoring price pressures and taking a more aggressive marketing stance in the German market. The firm increased its ad budget by 40 percent in 1996, with a slightly smaller increase planned for this year, said Dieter Jacobfeuerborn, director of Lee Germany.
Despite its reputation as a manufacturer of basics, “Lee is more image-driven here than in the States,” he said.
Lee started focusing on its women’s business early last year, said Jacobfeuerborn. It launched an ad campaign with the theme “Lee in Space,” featuring humorous scenarios of young men and women wearing Lee products in a spaceship.
“Women’s jeans especially show tremendous growth opportunities,” said Jacobfeuerborn. “We see a strong trend in a more regular fit and more and more dark washes.”
Another competitor in the European jeanswear market is CK Calvin Klein jeans. The designer’s company has a $50 million ad budget, which will be boosted by $15 million to $20 million for the launch of limited-edition black jeans this year.
While the company didn’t show at Inter-Jeans, it did throw a big party to introduce the limited-edition jeans, which are made from black denim purchased in Japan. The inside seams of the jeans show the fabric’s selvage — a prized touch among jeans connoisseurs. The jeans, which will only be distributed to 1,000 European stores, will retail around $125 (200 deutsch marks). The women’s and men’s styles will be shipped for April 1 deliveries.
In a typical Calvin Klein cross-promotion, the high-end jeans will be merchandised with a scent strip of Klein’s CK Be unisex fragrance.
Fabio Fusco, managing director of Calvin Klein jeans in Europe, said the company plans to grow about 50 percent in 1997.
“Not by increasing distribution, but via increased penetration in each area,” he said. “Our success in 1996 was not because of the market or market conditions. We certainly took market share from others.”
In 1996, Calvin Klein Jeans generated about $87.5 million (140 million deutsch marks). Currently, Italy and the U.K. are CK’s top markets, with Germany placing third, but Fusco said that “Germany should become number one. It is more of a fashion market, and the German consumer is very sensitive to fashion.”
Guess made its Inter-Jeans debut, but presented a product that’s designed by its Florence-based design studio.
“Guess is a bit more fashiony here than in the U.S.,” said Marco Stein, sales director for Guess Germany. “Jeans won’t be our biggest product.”
The company is targeting 200 to 300 new retail outlets in Germany this year, but Stein declined to give sales projections.
At the discount end of the market, Frans Van Zeeland, general manager of Maverick Europe in Brussels, said that “the discount jeans business is growing. We’re taking a bigger share of the market, especially in France.”
Van Zeeland doesn’t expect “a lot of surprises in 1997. It will be stable compared to 1996. Maverick has been growing at a rate of about 40 percent in sales and units each year. The key is distribution in shops. If it’s done correctly, you sell well.”
For all price points, the trend toward fashion denim and away from basics continued. Vendors reported that retailers were interested in dark washes or in stonewashes that mimic vintage, worn jeans.
Popular fits include classic straight-legs and stretch styles. Novelty fabrics included stretch corduroy in solids or prints, printed velvet and synthetics, satin, twill, covert, fake leather, raised stripes and plaids. Tight, low-waisted bell-bottoms were the top look for club-going young consumers.
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