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We’ve already learned some interesting things here,
and what we’ve talked about is a very good basis for the discussion that we now want to hold.
I would like to introduce you to the two speakers who you haven’t yet met.
Ms. Götz, perhaps you can say a little bit more about where you are represented, in how many shops and what you do there.
I’m a passionate fashion entrepreneur and I’m an instinctive person, not a numbers person.
But of course numbers count. I do everything with pleasure and passion.
And we’re in Zurich, Basel, St. Moritz and Gstaad.
Earlier on Marc presented your latest venture on Bahnhofstrasse –
it’s very chic, a new concept that you launched with fresh new brands. It’s all very interesting.
It makes me very happy because it’s not just about fashion.
It’s about architecture, art and lifestyle.
Mr. Bollag, could you tell us a little bit more about your company?
We currently have 16 brands in our portfolio, and we’ve said that about 20 is the limit.
Currently, we have 20 stores.
If you look back 10, 20 years and compare it to today, how has the fashion industry changed?
It’s definitely changed… through globalisation. And shifts in consumer behaviour.
The customer is far better informed.
It used to be that fashion told the customer what they wanted – that doesn’t exist today.
Everyone knows more or less what they want.
They read a lot, see a lot and are very happy to find their own style…
Mr. Strehle, what do brands have to do to exist in today’s competitive environment, in the high streets of the world?
It’s precisely what I spoke about earlier.
It’s about positioning, which Ms. Götz would agree with.
A brand that wants to be successful today has to know what it can do, what it is, where it comes from, what is in my heart and my DNA.
I agree with you that – and we're very aware of this – customers shop very differently today.
First, they go to H&M to buy their basics, like a blouse, a t-shirt or a shirt,
and then they come to us to buy an investment piece.
Marc, you have a deep insight into the industry thanks to the many transactions that you’ve seen over the course of the year.
Could you tell us which branches have developed in a particularly dynamic manner?
Brunello Cucinelli is one of our clients that we started to work with three years ago,
when we opened our first store together in St. Moritz, in the former Moncler store on the Via Maistra.
It then progressed quickly from there, so that there are always times when brands come up,
open stores and have new capital, which they then invest in order to increase their sales and return the profits back to the investors.
It was the same last year with Moncler, and now Moncler and Brunello have reached the pinnacle of their expansion in Europe and America.
And in Asia there are numerous opportunities.
Will there be a time when the tide reverses? Will we, or can we expect brands to come in from Asia?
Yes, for example, Hermès has established its own newly developed brand in China and is expanding there as we speak.
We expect many Chinese brands to come to Europe, not all of which will be in the premium luxury market.
We see this with UNIQLO from Japan, which is now opening stores in Germany.
They will come from all sectors. So, yes, I think that many Asian brands will soon come to Europe.
I don’t believe that at all.
No?
Me neither.
The Chinese are very good at copying, but my impression is that they aren’t good at creating a brand image.
They are happy to buy, but I don’t think we have to worry about a flood of Chinese brands in the next 15 years.
Sami… UNIQLO, or FAST RETAILING, makes six or seven billion dollars in sales these days.
UNIQLO is Japanese.
Yes, but it has set a target of $50 billion in 2020…
Sure.
I have to say, UNIQLO has adapted naturally to a bit of European fashion.
Think about Issey Miyake: You can hardly go down the street without being attacked by a dog, because these clothes, they don’t meet European expectations.
Marc, you described earlier a very strong dynamic in the Retail Market Study.
Do you believe that rents will continue to increase? At some point, this has to come to an end.
Not everywhere. It has to consolidate at some point and it can’t always go up.
Owners who sign the leases will be looking for long-term tenants that will occupy the stores for longer than 10, 20 or even 30 years
and therefore will not take part in these spiralling prices.
I disagree. We’re already seeing a brutal explosion in the price of rents, which is why there are some cities that we won’t have access to in the next five years –
Zurich, for example, where we simply won’t be able to afford the key money even if we wanted to pay it.
But that’s the way things are, which leads us to the conclusion I stated earlier: we need to think differently.
We might have to say that we won’t build stores that are 450m2 or 500m2.
Instead we’ll build 250m2 shops, which cost a bit less and we can do things with personnel,
interior design and a trendsetting selection to make sure that the smaller space performs better per square metre than we’ve been used to until now.
In the end, it will simply force us to rethink our model.
Sami Bollag noted earlier that Esprit had expanded to 2000m2, but it’s now gone back to opening 200m2 stores
because they had simply become too big; they now have a smaller collection than they previously had.
You lose contact with the customer when the store is too large; they’re too far away.
They need eye contact and dialogue – that’s really important!
I agree with Ms. Götz. At the end it comes down to the salespeople greeting people and looking after their needs.
That’s what matters these days. Architecture, high investments and expensive materials are fine.
But it doesn’t have to be that way. It boils down to this: we’re all on the market side, the brand side, and we’re focusing more.
This also means that collections will continue to become smaller and better, and they’ll have to become more targeted.
Of course this is a big challenge. Earlier it was one way, and now it’s going in the other direction: small, exquisite collections that have to hit home.
And this will be reflected in the shops…
Marc, because this pressure on prime locations still exists, as we confirmed here earlier, there are efforts in many cities to expand these prime locations.
If I think about Germany as an example, in Frankfurt they are building a street parallel to Goethestrasse – the whole thing is called Maró –
and the Hofstatt district was opened in Munich, and in Dusseldorf there’s now the Kö-Bogen.
Does it work?
If you ask me directly, I would say that the Hofstatt district in Munich doesn’t work
because consumer behaviour and the places people go to don’t change from one day to the next.
We’ve seen this with shopping centres that aren’t built in prime locations in the city centre.
It takes three to five years for people to change and take new routes, just as we've seen with Abercrombie & Fitch and Hollister in the Hofstatt in Munich.
Would you take the risk, Mr. Strehle? To try a new neighbourhood as an alternative to a luxury location?
There’s no way around this.
There will always be more brands; I also believe to a certain extent that Asian brands will come on to the market…
But yes, there will always be more brands that will be able to – and will want to – pay, but the areas won’t be larger, so something will definitely have to evolve.
I turned Storchengasse into the little Bahnhofstrasse, for example.
All the designers have now moved into Storchengasse.
I’m genuinely proud of this, because I didn’t want to be on Bahnhofstrasse 30 years ago.
So you created this with your pioneering spirit?
Yes. And everyone knows Storchengasse and everyone loves it because it’s still personal and you know everyone.
But with Bahnhofstrasse, you simply go there and hope that you won’t get pushed or something…
Earlier on we addressed the topic of e-commerce and online shops. What role does this play?
I would say that our brands are active in e-commerce, and very successfully, too, as they began early on.
This is an additional market that we have to deal with every day.
I’m a strong proponent of personal consultations and my designers are truly at the height of fashion;
it makes me happy when they are represented in the right way and the customer receives advice and can look at themselves in the mirror.
But I also believe fully in e-commerce. It’s a new form and it’s 100% the way to go, at least when it comes to accessories:
things customers don’t have to try on and won’t have to return too quickly.
Shoes are more difficult because there are just so many different fits.
I also think it’s good for hardware, stationary and similar. But my labels don’t work with e-commerce.
Ladies and gentlemen, it’s now time for us to say thank you for participating and to you for listening.
I enjoyed this very much and learned new things, which I hope you did, too.
All that’s left for me to do is to thank you and invite you to an apéritif on behalf of Marc-Christian Riebe and his team.
I wish you a nice evening. Thank you very much!
Marc, I would like to take the opportunity to thank you on behalf of the whole team for your patience in preparing this market study,
an assignment that took you from Europe all the way to North America. Thank you very much for this!