The Otto Group wants to set itself apart in the U.S.
This story first appeared in the November 12, 2009 issue of WWD. Subscribe Today.
The Hamburg, Germany-based Otto Group, which operates 123 companies in 21 countries and generates about $20 billion in annual revenue, is bringing Apart, its largest fashion brand, to the U.S. for spring. Otto Group, best known in the U.S. as the owner and operator of the $1 billion Crate & Barrel chain, has established a New York office to introduce Apart, a 30-year-old women’s clothing label that has been expanding worldwide.
Apart does about $150 million in annual volume with a wide range of wholesale accounts in 21 countries as well as 10 of its own freestanding stores in Germany, Bulgaria, Denmark, Latvia and Russia. In addition, the company runs about 70 shop-in-shops throughout Russia.
The strategy for the U.S. market is to enter slowly with select wholesale accounts at specialty retailers before rolling out to department stores, and eventually to open its own locations, said Francesco Cardoletti, Apart’s New York-based president and chief executive officer.
“There is a learning curve to the market in the U.S.,” he said. “We can’t think we can just come here and take over. That’s why we think the specialty stores will be a good place to start so we can learn from our customers.”
Cardoletti said the brand brings something new to the U.S. While Apart sells every product category for women worldwide — sportswear, swimwear, lingerie, outerwear, eveningwear, accessories, cosmetics, even bridal — Cardoletti said he wants to start with sportswear in the U.S. After testing sportswear, he is confident the brand can quickly introduce more categories here. Based on extensive market research, Cardoletti said Apart should be able to sit in a variety of areas of a store. He characterized it as a brand for the bridge customer, with a better price point and a contemporary look.
“It’s on-trend, without being overly trendy,” he said. “But it’s certainly nothing basic. I don’t think a customer looking for basics would shop our line.”
For spring, the sportswear line (and select eveningwear styles) for the U.S. market includes a range of styles — colorful maxidresses, shorts, jackets, knit tops with subtle beading and embroidery, lightweight sweaters and work-appropriate dresses, skirts, blouses and blazers. The collection wholesales from $38 for a top to $150 for an evening dress.
“The idea is to have a brand which offers women everything they need to fit into their lifestyle,” Cardoletti said.
Apart is designed in Germany by a team of 121 designers and manufactured in factories around the world. In the U.S., Cardoletti said the plan is to treat the brand as if it’s a small company, growing at a smooth and steady pace without oversaturating.
“We are like a small brand here, but with the advantages of being a part of a large global group,” he said. “Our initial goal is to fully understand the American mentality and to learn about the industry here.”
The first delivery will ship in January, and Cardoletti said the brand is prepared to ship new collections to retailers 10 times a year. By the close of next year, he expects to reach about $4 million in wholesale volume.