News from the German retail market week 32.

News from the German retail market week 32.

  • German retail market: Turn over week 32 +8% vs. LY. July’s turn over -7 % vs. LY.
  • Openings & Business
    – Zalando
    starts selling products from the Spanish brand Mango on their site. Around beginning of September are you able to buy Mango collection from Zalando’s E-shop.
    Woolrich opening in Hamburg: this is their third store in Germany (Munich & Sylt). The address is Hohe Bleichen 17 and is 300 sq. It also offers the whole collection from HAKA (Men), DOB (Women) and Children’s wear.
  • Trend & Top sellers: For women, the grey denim jeans are expecting to be a top seller for the AW14 season. For men, the thinner outwear jacket and blazer in different shapes and styles will hopefully bring in the cash.
  • Retail economics
    – The Tom Tailor Group increases their sales & earnings.
    This casual brand from Hamburg is growing their business. The groups first half year showed a growth of 4,5% to €425 million. The Tom Tailor brands stand for a growth of 11% to €271% million, meanwhile the brand Bonita had a decrease of – 5,4% to around €154 million.

Turn over week 32 = + 8% vs. LY.

My thoughts on that: Good result for the German retail market. Some parts of Germany are still on Holiday and this usually means a lot of travelling to Spain for the German tourist.

Source:(http://bit.ly/1nIwNSF)

Openings & Business

My thoughts on that: As I wrote last week, Mango seems to be experiencing a positive trend and change with its concept. Selling their collection on Zalando will probably be a move and a change in sales strategy to also offer wholesale, or maybe this change was already done but nevertheless, they will get a broader reach and customer target in the market.

Woolrich – the third store in Germany. I definitely think there is more potential to open up more stores in the market. I believe they have a solid and broad customer target, customers who are brand conscious and likes to spend money on their outerwear jackets.

Trends and Bestseller

Top Sellers for women: I can confirm the grey denim. My wife who is German just bought a pair.

(http://bit.ly/1pYJrhF) (http://bit.ly/1lOBCdu) (http://bit.ly/1uFRN26) (http://bit.ly/1uhMA3d)

Retail Economics

My thoughts on that: Tom Tailor from Hamburg is one of the first brands that I got acquainted with here in Germany. A casual middle price brand that attracts the German men who are not that brand conscious and don’t want to spend so much money on their purchases. They are practical but also with details and this is perfect for the suburban middle age men, both to wear on their spare time with their kids but also when they have a beer with the lads. I also think they have a broad and solid customer group on the market.

Source:(http://bit.ly/1vxmSsS)

 

News from the German retail market week 31

News from the German retail market week 31.

  • German retail market – Turn over week 31 +1% vs LY. 
  • Openings & Business
    – Mango
    opening in Frankfurt, this is their biggest store in Europe.
    – Birkenstock  the German shoe manufacturer is stepping into the international licensing business through a partnership with brand consultancy trademark one AG.
  • Retail economics
    – The Metro group
    who owns METRO Cash & Carry, Media Markt & Saturn, Real hypermarkets and Galleria Kaufhof showed a really weak third quarter.
    – Adidas will bring down their forecast for the present fiscal year. They now believe they will earn around€200 million less then the first forecast.

Turn over week 31 = + 1% vs. LY.

My thoughts on that: Finally, after seven weeks in a row with a minus vs. LY , last week showed a plus for many of the retailers in Germany. 

Source:(http://bit.ly/1xXGpi9)

Retail Economics

Metro Group the company showed a positive result after the first 9 month but the third quarter brought their result down from €119 million to around €52 million.

Adidas will bring down their forecast for the present fiscal year. They now believe they will earn €200 million less then the first forecast.

Source:(http://bit.ly/1tN2DFW ) (http://bit.ly/1zN8rj9)

My thoughts on that: The article doesn’t tell in detail the reason for Metro group or which business unit had the worst performance. I guess that kaufhof is not at the top of their game. As I have been writing before I believe that a lot of the larger department store chains have problems to keep up with the international expansion and the online and Omni-channel solutions that are growing in the market. Not sure how large their e-commerce business is compare to their physical sales. Although, running those huge department stores can’t be cheap.

Adidas, I am a bit surprised that Adidas are lowering their expectations and forecast. I believe that the World Cup wasn’t as successful as expected or that their “normal” business with clothing and shoes hasn’t performed as expected. Although not sure which market is performing.

Openings & Business

The Spanish retailer MANGO opened up the biggest store in Europe. The location is direct on Zeil in Frankfurt city. The former occupant was the Brand Pohland, the location is around 3000 sq. sales area and in 5 different floors. The brand will show all their collection from DOB, HAKA, KOB, Accessories, Sport, underwear and large sizes for women.

Birkenstock’s strategy is to conquer new strategic business segments, market and target groups. The brand is synonymous with health and convenient and comfort shoes and this is the area where they are going to expand and focus their product offers. Their product lines expansion lies in: living and sleeping, work environment, feet plus running and lifestyle.

Source:( http://bit.ly/1AOujfv) (http://bit.ly/1orIwcy)

My thoughts on that: A great A- location in Frankfurt. I think this will fit their target customer pretty well. The rent is of course in the top league, but I think the footfall and the buying potential are really good. I have to say that the concept Mango looks better and better, their stores looks more structured and attractive and it will be interesting to follow their performance.

Birkenstock, the brand was chosen the “Brand of year” in the US 2013 and is already commercialized in more then 80 countries around the Globe. With that kind of brand awareness and their “ new” product mix I believe they have some really good condition to grow even more on an international level.

News from the German retail market week 30

News from the German retail market week 30.

  • German retail market – Turn over week 30 -5%vs LY. 
  • CPD – Collection Première Düsseldorf – International Fashion Fair in Düsseldorf takes place from 26th to 28th of July.
  • The German retail brand Esprit partners up with PETA.

Turn over week 30 = -5% vs. LY.

My thoughts on that: The second week in row shows the German retail minus vs. LY. It feels like it is less visitors or at least fewer customer with shopping bags on the streets. I think one reason is that the e-commerce is still growing and taking more and more from the physical sales. The brands that can’t follow the development on multi-channel solutions will loose to the benefits from the e-commerce market.     

Source:(http://bit.ly/1oCb0AY)

CPD – Collection Première Düsseldorf – International Fashion Fair in Düsseldorf takes place from 26th to 28th of July.

The Düsseldorf fashion fair is busy and running its last day today. Many of the brands and exhibitors do miss the German customer, the reason is that many already made their orders at the Berlin fashion fair two weeks ago or in their central buying office. The fair gets a lot of visitors from abroad and eastern Europe as Russia.

Source:http://bit.ly/1mUfHkl)

My thoughts on that: Düsseldorf is a well-reputed fashion city for whole sellers and retailers. A lot of brands and fashion agencies have their head office or showroom located in the city or nearby. The geographical location is great, in the middle of Europe and close to Amsterdam, where also a loot of large and significant international brands have their head offices for the European market. Since the German market is very much divided in regions makes it sense for the international companies to participate in different fairs around Germany. Although, if you are looking for volume I think it is better to be focus on the central buying department and the earlier fairs. I am not the biggest fan of these kinds of fairs since I think and hope that the platform and fashion forum will develop more digitally. I understand the visual aspect and touching part of the buying process but this could be demonstrated more digitally and in a more personal forum. I will explain more in detail and the advantages in an upcoming blog.

The German retail brand Esprit partners up with PETA.

Esprit has partnered up with the animal rights organization People for Ethical Treatment of Animals (PETA) to introduce PETA approved vegan hangtags to mark Esprit’s vegan shoe styles.

Vegan models are available in Europe and on their e-shop. The collection consists of PETA approved vegan trainers, made from eco-friendly faux leather and canvas.

My thoughts on that: I think it is a good action and cause from Esprit. In my opinion the brand has been a bit plain so this is definitely something that will an effect on their brand awareness. The purpose is also good due to the ecological trend in Germany I think they will reach out to a broader customer group

Source:( http://bit.ly/UwO61P)

 

News from the German retail market week 25.

News from the German retail market week 25.

  • German retail market – Turn over week 25 -14%vs LY.
  • Online returns: German online companies working to push down their return rates.
  • New brand Reserved from east Europe and Poland is entering the German market.

Turn over week 25 = -14% vs. LY.

My thoughts on that: One less trading day on Monday in some parts of Germany affected the trade. The stores are displayed with heavy sales signs, but this didn’t help the trade. Since almost all summer items are on sales, the stores are soon starting to communicate a stronger pre-fall message. Important is to get a smooth transition from one season to another so you margins doesn’t fall too much. 

Source:(http://bit.ly/T3ghEv)

Online returns: German online companies working to push down their return rates.

The online boom in Germany is not surprisingly showing its side-affects through high return rates. A study with the 30 largest online companies done by the consulting company BearingPoint shows that the toughest challenges lays within return rates and inventory management. The study also shows that almost 2/3 of the asked companies prioritize and value core competences as: logistic solution including receiving goods and quality check, stock holding, consignment and picking meaning managing distribution, returns and sending goods.

Most of the companies also prefer to run this part of the supply chain within their own organisation and without external services. The advantages are better control over the product flow process and also more control over internal product and customer data information. This leads to lower product damages and lower costs.

One partner, responsible for the study, Matthias Loebich from BearingPoint points out that companies within the textile and clothing industry should put more focus on finding better technical solutions and to be more responsive to the demand. With the right algorithm you could optimize your demand forecast and stock levels. He also sees opportunities in improving the package and product descriptions to lower the return costs.

The study also shows that 69% of the companies who were asked admitted that their sites could be user-friendlier. For example, the shoe industry could improve their product presentation and visuals by implementing 3D-measurement technic to improve the fit and accuracy of the purchase. This will also give the company opportunities to collect import customer data.

My thoughts on that: I think this study is very interesting because I assume it is not just a challenge for the German companies but on an international level. The focus should not only be on the supply chain management (SCM) solutions but also on the site and product presentation which they are mentioning in the study, according to a simple cause and effect analysis.  Many of the companies that participated in the study are multichannel companies, which also means they have a choice of either work together with both sales channels or separate the online process within their inventory  management. 

One SCM driver that are mentioned here are the inventory management including product planning calculation, which goods are responsive and which is not and what safety stock level is right for us? A decent product categorization with: volume-based products, season goods and trend teasers could also make it easier to decide what amount to by on stock and on demand. What calculation tools you should use to optimize the demand calculation as was mentioned in the study could of course differ. It is depending on your complexity of product mix, % of change in products or services, storage location costs, supply chain locations, planning cycle and seasonal or fluctuation in demands.

The other driver that are mentioned is information system and I would also like to push for an intelligent information system that complements your ERP (Enterprise Resource Planning) and SCM system. The technique RFID (Radio Frequency Identification) is for many companies expensive to implement but gives you a very good stock update and a transparency in tracking goods (RFID 24-7). Which helps your inventory management planning.

As mentioned in the study, the product presentation and the user-friendliness are not to underestimate. The earlier you could prevent the customer from choosing the wrong size or product the better it is. Also think which options you are showing and that the product information will help the customer to choose the right items.

Source:(http://bit.ly/1ljCfij)

New brand Reserved from east Europe and Poland is entering the German market.

The company LPP SA is a Polish fast fashion retail company – selling clothes and accessories under 5 brands: RESERVED, CROPP, HOUSE, MOHITO, SINSAY. They will enter the German market with an online shop on the 1 st of July.

My thoughts on that: The competition is getting harder and especially in this segment, lower price segment, which offers 1-2 new deliveries per week to a relatively low price. They will challenge brands like H&M, New Look ,ZARA and Primark. If they also are going offline (physical store) I guess their first store will be in a shopping centre in one of the 10 largest cities.

Source: (http://bit.ly/UAkNM5)

Infographic: Supply Chain Management

 

Trends within supply chain

Trends within supply chain

Retail economics fact from Switzerland

Retail economics fact from Switzerland. Interesting facts from Switzerland, member of the World Cup in Football 2014.

For more information to complete your commercial due diligence and market strategy please contact me on my email: contact@johanblixt.eu

Retail economics fact from the interesting retail market Switzerland.

Retail economics fact from the interesting retail market Switzerland.

Retail economics fact from Belgium.

Retail economics fact from Belgium. Interesting facts from Belgium, member of the World Cup in Football 2014.

For more information to complete your commercial due diligence and market strategy please contact me on my email: contact@johanblixt.eu

Retail economics fact from the interesting retail market Belgium.

Retail economics fact from the interesting retail market Belgium.

 

Retail economics fact from Croatia.

Retail economics fact from Croatia. Interesting facts from Croatia, member of the World Cup in Football 2014.

For more information to complete your commercial due diligence and market strategy please contact me on my email: contact@johanblixt.eu

Retail economics fact from the interesting retail market Croatia.

Retail economics fact from the interesting retail market Croatia.

Retail economics fact from Brazil.

Retail economics fact from Brazil. Interesting facts from the host of World cup in Football 2014.

For more information to complete your commercial due diligence and market strategy please contact me on my email: contact@johanblixt.eu

Retail economics fact from the interesting retail market Brazil.

Retail economics fact from the interesting retail market Brazil.

Retail economics fact from Austria.

Retail economics facts from Austria.

Retail economic facts from an interesting retail market in Europe. For more information to complete your commercial due diligence and market strategy please contact me on my email: contact@johanblixt.eu 

Retail economic facts from Austria.

Retail economic facts from Austria.

News from the German retail market week 22.

News from the German retail market week 22.

  • German retail market – Turn over week 22 +6%vs LY.
  • The Mall of Berlin, will this Mall change the shopping pattern in Berlin?

Turn over week 22= +6% vs. LY.

My thoughts on that: Good for the retailers in Germany. The bridging day last Friday of course played a big part but nevertheless it is some positive figures.

Source:( http://bit.ly/1nJEs9s)

The Mall of Berlin, will this Mall change the shopping pattern in Berlin?

My thoughts on that: This is a very interesting Mall that could change the shopping pattern in the city of Berlin. Why, because the location is Leipziger Platz, which is an interesting place where a lot of people and tourists are in movement.

Harald Huth who is the “Bauherr” or constructor and in charge of the opening has announced that the opening is pushed forward to an unknown date but not before end of July. They were supposed to open end of May, so there will of course be consequences from the brands and retailers who are know ready to open up with their new staff. If they are not being compensated for the rent then it could be some tough times before the opening.

I was in a meeting with Harald Huth when he was in the phase of looking for new tenants to the Mall. I represented two other brands that could have been interesting for him. Although, we where asked about this project when he already had an 80% rental coverage and he was in a pretty good position already to negotiate. Nevertheless, the brands I was representing weren’t that keen on Berlin at the moment so we turned it down which I thought was unfortunate because I think this Mall could change some of the shopping pattern in Berlin. The city and its residents doesn’t have a significant high buying power but it is streaming a lot a of tourists yearly and this is of course also an important target group. I also think the city has a decentralized shopping pattern or locations. You have the Friedrichstraße, Kurfurstendamm, Tauentzienstraße and Berlin Mitte who are well-known “high-streets”. They are not naturally connected to each other except for Kurfurstendamm and Tauentzienstraße  which I think could be a challenge for the footfall of the retailers in Berlin. Maybe I am wrong and maybe the dynamics of Berlin makes it so interesting to be there. When Harald Huth presented the project it felt like an interesting ingredients in the shopping climate in Berlin. The shopping centre is or as he presented it more high profile, probably like Gallery Lafayette and it will be interesting to see how a huge shopping centre (70.000 sqm) with a high profile like that will perform in the centre of Berlin.

Source:( http://goo.gl/VXW72u)