BERLIN — Despite the global downturn, the Spanish fashion brand Desigual remains on a rapid expansion course, including the opening of its first German — and largest European — store here.
This story first appeared in the December 31, 2009 issue of WWD. Subscribe Today.
Now available in 70 countries, the vertical Barcelona-based company has pinpointed Germany and France as its most important growth markets in the year to come. At the official Berlin opening, chief executive officer Manel Adell said, “We should see some 10 stores in each of these markets soon.”
Known for its lively novelty patchwork looks for men, women and children of all ages, Desigual has increased its revenues 20 times over the last seven years. Sales last year reached 162 million euros, or $238.4 million at average exchange, versus 8 million euros, or $7.6 million, in 2002, and while the company wouldn’t forecast 2009 sales, it expects to sell 10 million garments this year, up from 6 million in 2008.
As for its distribution network, Desigual is available in 70 countries in almost 6,000 multibrand doors, will have close to 150 Desigual brand stores by yearend and is heading toward 500 corners and shop-in-shops, Adell said. Spain accounts for about 40 percent of total sales, and Adell remains particularly bullish about Europe. “Today, 90 percent of our business comes from Europe, and there’s still big room for growth,” he stated.
Germany is a good example of how Desigual infiltrates new territories. “We’ve been doing our homework there for a long time, and started selling four years ago with independent distributors. But Germany is a hard market in the beginning. They first want to see that you deliver and are dependable,” Adell noted.
Business really took off two seasons ago, he said, growing from 40 to 50 accounts to now more than 600 doors. For next year, the plan calls for 1,000 sales points in Germany and a total of 10 Desigual stores.
Desigual tends to start via multibrand accounts and shop-in-shops, “and then our [own store] retail strategy comes on top, to reinforce the brand. We open on the world’s key retail streets, where our multibrand accounts can’t be. Which is why we picked this location,” he said of Tauentzienstrasse in Berlin, one of the German capital’s most well-trafficked shopping stretches. “I think there is no better way to get to know Desigual than to experience this store on a busy street.”
The three-floor store covers about 150,000 square feet. “This store is an evolution of our retail concept, with all departments clearly separated on three floors. Women’s on the ground floor is probably the most typical Desigual,” said Adell, pointing to its color and pattern-packed decor, whereas men’s wear, which shares the first floor with children’s, has been toned down in Berlin. “It’s more white and more calm, as is the men’s collection itself.”
On the top floor, there’s the “Outlet” — not a regular Desigual store feature, but perfect for cash-strapped Berlin. “We don’t do it in all stores, because we don’t have the room. But it’s a special opportunity space, for last-season, out-of-stock and random pieces,” Adell explained.
In Germany, Desigual is shopping for retail space in major metropolitan centers including Hamburg, Cologne, Munich, Düsseldorf and possibly a second Berlin location on the former east side of town. “The speed of implementation has to do with what becomes available,” Adell said. “The location is key.”
In France, Desigual recently opened in the La Defense area of Paris, adding to the two stores it already operated in the Parisian suburbs, as well as in Marseille, Toulouse and Montpellier.
As for the U.S., where Desigual is carried by 36 Macy’s doors and 250 multibrand stores, and opened its first store in SoHo, two further Desigual units are slated to launch in the near future, either in New York, San Francisco or Miami. “Both coasts have to be tested,” Adell said, “and we’re presently negotiating four spaces.”
And the secret of Desigual’s success? “We always say the 2 ‘Ps’: our product strategy which calls for a strong identity, differentiation, good value for money and a positive spirit. And our people.” Employees, who average 27 years of age, have mushroomed to 1,700, compared with 40 seven years ago, and represent some 30 nationalities, reflecting the label’s love of diversity.
But perhaps the most important factor is Desigual’s insistence on staying special and not striving to be all things to all people. “People say they have to be in the right mood to buy a Desigual item, and that’s fine with us. The idea is to put a Desigual garment in everyone’s wardrobe,” he stressed, “and not to dress a person all the time.”