Translated by
Nicola Mira
Oct 12, 2018
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Germany's Tom Tailor to broaden womenswear, expand internationally

Translated by
Nicola Mira
Oct 12, 2018

German casualwear label Tom Tailor has previewed the capsule collection created in collaboration with model Toni Garrn, which will be available next spring. And it was an opportunity for the label’s CEO Heiko Schäfer to talk to FashionNetwork.com about the firm's growth potential in womenswear, about the label’s e-tail expansion outside Germany and the impact of climate change on the fashion calendar.

Heiko Schäfer and Toni Garrn at the presentation of the capsule collection launching in 2019 - TOM TAILOR

FashionNetwork.comWhat are you most concerned about, weak consumer demand for fashion or the impact of climate change?

Heiko Schäfer: The latter is indeed a highly significant phenomenon for the industry, as seasons can no longer be forecast with any sort of accuracy. This is why we must align our practices with those of our colleagues. What can be done, of course, is streamlining the value chain, so that it’s able to react much more quickly to fluctuations. But it’s impossible to circumvent the basic laws of our business: a winter jacket needs three months before it's ready to hit the stores.

FNWThe financial press has once again questioned the profitability of Tom Tailor, chiefly blaming the rising cost of retail sales and fierce competition by e-tailers. What is your opinion?

Heiko Schäfer: I find this extremely surprising. We are very profitable and we don’t have any financial problem, least of all in terms of liquidity. Financially, Tom Tailor is a very healthy company. E-commerce isn’t competition for us, on the contrary, it’s one of our distribution channels, like the wholesale and retail channels. Whether via our own e-store or via partners like Zalando and Amazon, e-tail is working very well. Of course, we must be prepared, because the share of online distribution channels will keep on rising.

In the last two years, we closed down 350 stores, chiefly those of our Bonita brand, but also some of Tom Tailor’s. Nowadays, this is a normal occurrence in the industry. We discussed each case in greater depth than the majority of our competitors, and we looked at the footfall and revenue generated by each store before taking a decision.

FNW: In your opinion, is it possible to win consumers over and attract them once more towards physical stores?

Heiko Schäfer: Consumers don’t buy exclusively online or offline. It’s actually a case of combining these two worlds as best as possible. Specifically, the issue is knowing how to encourage customers to purchase from both channels. Our stores’ appeal must be kept at a high level, and constantly stoked up, for example by staging events and through effective visual merchandising.

FNWAre collaborations and capsule collections a good answer to lower demand?

Heiko Schäfer: I think that collaborations with external partners are very useful tools for rekindling creative inspiration, and for telling stories that capture consumers’ imagination. We began to embark on this kind of project at the end of 2017. I think they are extremely effective for boosting the brand’s emotional appeal.

FNW: Is your capsule collection with Toni Garrn a way of making inroads with your female target?

Heiko Schäfer: Of course. Womenswear accounts for two-thirds of the market's volume. For us, the ratio is still currently 50-50. Besides, we already know from extensive market research that a not insignificant part of our customers would like to find a broader range at Tom Tailor - even products which we do not currently offer.

What we are seeing right now is that our commercial partners are being cautious with their purchases, since the months of July and August, and September too, have been tough. The challenge is to make them realise that this isn’t something to do with the current season, but that they must think six months ahead.   

FNW: What are your strategic objectives for 2019-20?

Heiko Schäfer: We want to increase our growth potential, simply by doing things better - helped by statistics, for example when planning our product promotions, pricing and the way we manage discounts. The second stage will be to expand our business into new markets. Among other things, we are going to push the internationalisation of our e-tail sites, especially for central and eastern Europe. And we’re growing in markets like Spain and Scandinavia, through cooperation with solid partners. In my opinion, it’s crystal clear that we should be expending our energies only on markets that look promising. In India, South Africa or the USA, no one is expecting to find Tom Tailor.

In addition to broadening our womenswear range within Tom Tailor’s denim division, we will concentrate more and more on a younger consumer target, aged 25 to 30. Our brands have a huge potential with young adults too, people who have a greater awareness of quality and demand good value for money.

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