BERLIN — Germany’s innerwear industry has its eye more on Europe than China.
When it comes to exports, as well as contracting and sourcing issues, the euro zone remains the major sphere of activity for Germany’s innerwear and sleepwear manufacturers. While the East is seen as a region of opportunity, more often than not, it’s Eastern Europe, not Asia, that is attracting immediate German attention.
Exports are a must, manufacturers said, given the ongoing weakness of the German economy, as well as retail saturation at home for the nation’s leading brands. That being said, however, exports rarely exceed one-third of sales, and that figure is not expected to grow dramatically in the near future. Makers are slowly building export markets, though the strategies vary widely, such as establishing joint ventures, setting up subsidiaries, opening shops or selling via agents and trade fairs.
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Schiesser, which claims to be the German market leader in nightwear and the number two resource in underwear, generates about 25 percent of consolidated sales in Benelux, Switzerland, Austria, Italy, Scandinavia, Eastern Europe and China. In 2002, that amounted to about 50 million euros, or $60 million at current exchange rates.
Rudolf Bündgen, marketing and sales manager of Schiesser AG, said exports are increasing to Eastern Europe and China. The strategy “is to build up a network of stores and franchises, as there is hardly any established distribution infrastructure that works with Western standards. There is huge growth potential due to the growing popularity and interest in Western brands, as well as a growing standard of living and income,” he said.
The Radolfzell-based firm primarily produces in company-owned plants in Eastern Europe and foresees no major changes. Business conditions both for production and export sales should improve considerably due to the integration of 10 Eastern European countries into the European Union, he pointed out.
Bruno Banani, one of Germany’s youngest underwear brands, was founded 10 years ago in Chemnitz in former East Germany. The domestic market generates 80 percent of sales, and for the rest, “our main emphasis is in Europe. We want to gain a foothold here first,” said Jan Jassner, export director.
The euro also has made some things easier, he observed. “We don’t need different price lists, for example, but business is never easy. It depends on your partner.”
It also depends on a marketing budget.
While Bruno Banani has made a name for itself at home with its slightly audacious “Not for Every Body” advertising campaigns and unconventional promotions such as exposing its underwear in the desert, in the Outback, on the space station Mir and at the bottom of the Bermuda Triangle, the bulk of Banani’s advertising budget is concentrated in Germany. “Export is developing step by step, and as things go better, the more one can invest in ads. But in the beginning, it all happens through product,” Jassner said.
Felina, a large-size bra specialist, also produces in Hungary and Poland. China is not of interest as a sourcing venue, “as we stress quality and speed,” said Jurgen Wolleschlager, international marketing director. He noted the company delivers to China, as well as to the expanded euro zone and the Arab states.
The strategy differs from region to region. “In Eastern Europe, the retail structure is new, with new shops and shopping centers, and we’re developing the business through a subsidiary,” said Wolleschlager. But in Southern Europe, Felina mostly relies on small specialty shops and El Corte Ingles, Spain’s biggest department store. And in Dubai, the Felina brand is carried in shopping centers at its own stores and in-store shops.
Not so for the Rösch Group of Tubingen, which produces high-end sleepwear in Hungary under the Rösch, Louis Féraud and Daniel Hechter labels. Rösch introduced its Féraud and house brand in America at the Lingerie Americas show in August, and has since set up a subsidiary in cooperation with Féraud Inc. to handle all administrative work there.
— Melissa Drier