El Ganso’s Clemente Cebrián on the brand’s next chapter without L Catterton
El Ganso is opening a new chapter. After a busy 2018, marked by the end of its partnership with LVMH’s private equity fund L Catterton, the Spanish company is returning to family ownership and its entrepreneurial nature. Clemente Cebrián, who founded the company in 2004 together with his brother Álvaro, discusses the latest events and lays out El Ganso’s plan for the future, in conversation with FashionNetwork.com. A slower expansion, the development of the digital presence and improvements to its stock management are part of the key priorities going forward, as well as revamped design team.
FROM L CATTERTON TO THE INDITEX EFFECT
L Catterton, previously known as L Capital, became a key part of the business’s story in the last few years after it acquired a 49% stake in El Ganso at the end of 2015. According to industry insiders, the partnership was expected to replicate the successful investment in French fashion group SMCP, which was sold for €600m in 2012, however the venture ended in September 2018 with the fund’s exit. El Ganso founders repurchased all of L Catterton shares and regained corporate control of the business following the departure of CEO Berta Escudero.
“We didn’t have a bad experience with L Catterton,” Clemente Cebrián tells FashionNetwork.com. “We learned a lot and, as a family-owned business, we are now focused on strengthening what we already have. We want to slow down the store opening programme, drive overseas growth through partnerships with local firms, and develop the online channel.”
This year, El Ganso is planning to continue growing, but in a controlled manner.
“The fund’s exit doesn’t imply a change of strategy. We will continue with the same strategy, but with a reduction in store openings,” Clemente Cebrián says. He explains that the Inditex Effect, named after the major Spanish company due to its aggressive store expansion, has made Spanish companies believe that opening new stores at a fast rate is necessary.
“Now we are realising that online growth is balancing everything out, that there is no need to open so many stores and it’s better to strengthen the existing store network and make it work well,” the businessman continues, highlighting recent closures in Amsterdam and Antwerp last year.
“We have seen that we have to establish ourselves in every country, instead of entering new cities and markets. Above all, it is about people knowing and understanding the brand. It’s a start-up mentality: we are trying new things and reacting fast. El Ganso is a medium-sized company, we have the ability to move and be agile."
INTERNATIONAL EXPANSION: SLOWLY BUT SURELY
Beyond Spain, Cebrián is looking at France for growth.
“It is our main objective. We have to go little by little, appearing more to build a stronger customer awareness in France. The big challenge will be to be purchased by [French consumers] and then by tourists,” he says as he reveals that French shoppers account for 90% of sales at its Rue de Passy shop.
Currently, El Ganso has five stores in Paris, a concession in BHV Le Marais and a further concession in Galeries Lafayette, making up a total of 30 stores in the country. Once the existing network is consolidated, the next step will be to focus on the online channel, Cebrián stresses.
In terms of markets, Clemente Cebrián says the brand has been well received by customers in Spain and France, while the UK is showing slower signs as a result of Brexit. In Europe, the label has also a presence in Portugal and Germany. Overseas, the evolution has been “positive” in Latin America, where it operates a dozen stores in Chile and Mexico. Additionally, Cebrián sees growth opportunities in Kuwait, where the company opened its first store in 2017 in partnership with Alshaya Group, and Dubai, where it launched a debut store in June. “Our style is very popular in Latin America, as well as the Middle East. Interestingly, the trend is reversed there, and we sell more women’s clothing than men’s.” Globally, the brand has more than 170 stores and locations.
The big surprise comes when Cebrián talks about the company’s US business.
“Without having a physical presence there, it is our third largest market in terms of web traffic after Spain and France." The US could become a future growth driver and underlines the important role of supply management. "Little by little, we are working in partnership with distribution companies, especially in the US. It is essential to have logistics centres abroad to supply the stores and respond to demand from online customers. The key is to integrate the physical store with the digital channel,” he says. El Ganso has currently a logistics centre in Spain and other facilities in Mexico and Dubai. Last autumn, the label signed an agreement with ID Logistics to manage its logistics worldwide, handling over 7,500 orders per season. But the company is cautious about launching stores in the US, with Cebrián saying that “New York is complicated. Spanish brands are recommended to start in Miami. [But] exchange rates make the brand more expensive, so we must be cautious.”
DESIGN THAT IS FIT FOR OUR TIME
Beyond the expansion and stock management strategy, El Ganso is undertaking a progressive review of its product. “At the beginning, the brand’s style experienced a boom in Spain but this has since then declined. Now, we are looking for an evolution and trying to avoid an excess,” says the company’s founder. The offer has been refreshed from Autumn Winter 2018/19 without losing the brand’s DNA, introducing new collections such as lines dedicated to Mickey Mouse and Mary Poppins.
Meanwhile, trainers are a key category for the brand, which is also trying to strengthen its children’s collections for kids aged 8 to 14. A series of key hires support this ambition, with Alvaro Cebrián leading the design team. In 2018, Carolina Menéndez, former creative director of Angel Schlesser, joined the label’s womenswear team, and Ricardo de las Heras, ex-creative director at Cortefiel, was named design director. Additionally, Cosme Bergareche, the 26-year old co-founder of Pompeii, has injected a breath of fresh air in the menswear line since his arrival in February 2018.
Among its future plans, El Ganso is also putting a greater emphasis on sustainability.
“We are working on a strategic plan that will see organic and recycled fabrics account for 75% of all production by 2023. We have a very clear ambition, but it will take time and work,” Clemente Cebrián admits, highlighting a first pair of shoes made from recycled plastic bottles and the waste reuse project it is undertaking with Ecoembes and Textil Santanderina. In the short term, the firm owned by the Cebrián siblings will open its first travel retail outlet at the Adolfo Suarez Madrid Barajas airport in Spain in February, and is working on a fragrance line with Perfumes y Diseño.
Clemente Cebrián is also maintaining his entrepreneurial mentality through collaborations with start-ups via the ‘Granja de Gansos’ innovation programme. Whilst other mid-market Spanish fashion firms have opted to invest in new brands, such as the Seville-based Scalpers which recently bought a minority stake in Victoria, El Ganso is not in acquisition mode. After ending 2017 with revenues of €81m, the company forecasts €89m in revenues for the latest financial year. And following a busy year marked by the buyback, the company remains family-owned.
“For us, acquiring new brands would mean diverting efforts. We have a lot to do before going shopping. And I prefer to have everything under the El Ganso umbrella,” Cebrián concludes, with a big smile.
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