Pepe Jeans London to overhaul Italian wholesale network and focus on key clients

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Nicola Mira
Feb 24, 2020
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Pepe Jeans London, the fashion label founded in London's Portobello Road in 1973 by three Indian brothers, introduced a commercial rationalisation strategy last year, under new CEO Marcella Wartenbergh. The strategy is now being deployed in Italy, the label’s fifth-largest market after India, Spain, Germany and France.

Pepe Jeans London, Fall/Winter 2020-21

“In the last two years, we expanded our [Italian] retail network to about 20 shops between full-price and outlet stores; the new strategy led to the closure of a few shops, and we now operate three full-price monobrand stores in Milan, Rome and Turin, and we are present in [Italy’s] main outlet villages,” said Carlo Gallo, Country Manager Italy for Pepe Jeans London, speaking to FashionNetwork.com.
In the near future, the label will focus on an overhaul of its Italian wholesale operations, and on strengthening its position with leading clients, among them department stores like Coin, where Pepe Jeans operates 10 concessions.

“We aren’t interested in increasing the number of doors, currently 600 across the whole of Italy, in fact we’ll probably reduce that number, consolidating our position in key accounts in an effort to improve profitability,” said Gallo.

Pepe Jeans London, Fall/Winter 2020-21

E-tail, managed from Pepe Jeans's Madrid offices, is another important asset for the label. “Online sales are growing also [in Italy], though not at the same pace as in other markets. We are working with the leading e-marketplaces and, in terms of our own e-shop, we are developing several omni-channel projects. These will first be deployed via our monobrand stores, but the goal is to involve also leading multibrand retailers, at a later date,” said Gallo.
While globally the label's core business is menswear, in Italy Pepe Jeans generates approximately 60% of its sales with womenswear. It also sells childrenswear and footwear collections for men, women and children, which were once licensed out but have been brought back in-house a few years ago. “Ever since we began managing footwear directly, it has become our fastest-growing category,” said Gallo.
Three seasons ago, Pepe Jeans inked an exclusive deal for its market segment with English model and pop singer Dua Lipa, developing a capsule collection of some 50 items, in whose design and fabric selection Lipa is collaborating actively. The partnership will continue for at least another two seasons, with the goal of enabling Pepe Jeans to win over a younger consumer demographic, leveraging Lipa’s huge social media following.
In 2019, Pepe Jeans London recorded a revenue of approximately €600 million, of which 7% was generated in Italy. EBITDA margin was slightly down, at around 10-11%. The label is owned by Lebanese investment fund M1, and currently operates about 350 monobrand stores worldwide.

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