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Presentation
Barcelona, 20 July 2006
Pág. 1
Table of contents
Project objectives
Principal trends in the business (textile)
Companies in Catalonia with brand strategies
Strategic options for success
Suggestions for possible actions
Annexes
Pág. 2
Table of contents
Project objectives
Principal trends in the business (textile)
Companies in Catalonia with brand strategies
Strategic options for success
Suggestions for possible actions
Annexes
Pág. 3
What questions were to be answered with the
project?
What are the growth strategies in the textile sector?
What companies (or how many companies) in
Catalonia are following these growth strategies?
What are the main operational problems / strategic
challenges of the companies that follow the new
strategies?
What actions could be defined to improve in a
practical and operative way the competitiveness of
the companies that follow these strategies?
Pág. 4
What questions were to be answered with the
project?
What are the growth strategies in the textile sector?
What companies (or how many companies) in
Catalonia are following these growth strategies?
What are the main operational problems / strategic
challenges of the companies that follow the new
strategies?
What actions could be defined to improve in a
practical and operative way the competitiveness of
the companies that follow these strategies?
Pág. 6
Table of contents
Project objectives
Principal trends in the business (textile)
Companies in Catalonia with brand strategies
Strategic options for success
Suggestions for possible actions
Annexes
Pág. 7
Principal trends of the business
1. The business is defined (and controlled) by
distribution
2. Significant growth of the brand at all levels
3. The brand strategies (of channels and of products)
converge > the manufacturers with a brand and
traditional multi-brand distribution are integrated
towards the distribution to capture the margin
4. The new textile brands that have appeared in the
last 3 to 5 years were created with a retailing vision
(Desigual, Filocolore)
5. The classical segmentations (age, buying power, ...)
lose meaning, it is segmented by experiences,
emotions, lifestyles, that go beyond a product Pág. 8
Trends in textile distribution
Project objectives
Principal trends in the business (textile)
Companies in Catalonia with brand strategies
Strategic options for success
Suggestions for possible actions
Annexes
Pág. 12
Administration
Associations
Supply of raw materials
Yarn Fabric
Distribution
channel
Consumer
Clothing - Multi brand store
Dyes and finishes -Department stores
-Pure channel brand
Up-stream textile -Brand of product with
stores (own/franchise)
Technical centres
and lab Training
-Design Clothing integrated in retailer
Supply centres -Fashion
-Businss School
-Tex. Engineering School
-Marketing, Sales Branding consultant Retail consultant Visual Merch.
I.T. Sys. Consult. Logistics platform Market studies agent Real Estate Architect office
Pág. 14
The identified companies
Around 140 Catalan companies of the textile industry
have been identified that may be following branding &
retailing strategy
The identified companies can be grouped in:
- Channel Brand (Large pure retailer)
(Zara, Mango, Gap, H&M...)
- Product or designer brand with mixed strategy (own stores
and multi-brand channel):
- Brand of stand-alone product (Desigual)
- Brand linked to a designer (Custo, Simorra...)
- Product brand or multi-brand channel designer brand (DB
Apparel, Vivesa, Jocavi...)
- Deluxe brand with retail (strategy non-existent in Catalonia)
“Haute Couture” fashion shows (Gucci, Prada, Grup LVMH,...)
Pág. 15
The channel brands
Turnover Channel Brands Types Total Own Fran-
Stores chises
>1000 M€ Inditex (Bershka, Massimo Dutti, Women’s and men’s 959 959 0
Stradivarius i Oysho) fashion and lingerie
Mango Women’s fashion 868 278 590
25-150 M€ Pronovias Weddings 115 68 47
Punt Roma BCN Women’s fashion 118 118 0
Tèxtil Textura Household 90 45 45
15-25 M€ Misako Complements 80 47 33
Rosa Clarà Weddings 42 4 38
La Tienda de Lolín Women’s fashion 34 34 0
Caribu Children’s fashion 97 30 60
5-15 M€ Canada House Children’s fashion 100 15 85
Etxart and Panno Women’s fashion 35 5 30
System Action Women’s fashion 14 14 0
Spaghetti & Co. Women’s fashion 34 4 30
Tentazioni Women’s fashion 45 45 0
<5 M€ Nice Day, Nice things Women’s fashion 33 4 29
Love Store Lingerie 21 7 14
Filocolore Household 3 3 0
Golo Golo
CHANNEL BRAND Women's
Total Turnover Approx. 2800 M€ fashion
Total Co.: 21 9
2697 9
1653 0
1044Pág. 16
Product brand with stores (I)
Turnover Product/dist. brands with stores Types Total Own. Fran-
stores chise
Custo Barcelona Designer 15 15 0
Punto Blanco Lingerie 3 3 0
> 25 M€ Desigual Women’s and 27 27 0
men’s fashion
Escorpión Women’s fashion 70 70 0
Armand Basi Designer 14 10 4
Colcci, Muchacha (Círculo de Punto) Women’s fashion 6 6 0
15-25 M€ Bassols Household 1 1 0
Liberto Women’s and 4 3 1
men’s fashion
Anna Mora, Brunella Women’s fashion 4 4 0
Civit, Luis Civit, Nougat London Women’s fashion 2 2 0
(Carusa)
Boboli Children’s fashion 15 11 4
5-15 M€ Marithé François G., Rose Hill (Twenty) Women’s and 9 5 4
men’s fashion
Gerry Designer 2 2 0
Señor Women’s and 6 6 0
men’s fashion
Javier Simorra Women’s and 26 26 0
men’s fashion
<5 M€ Schuss (Pradsa) Children’s fashion 3 3 0
Sita Murt Women’s fashion 7 7 0Pág. 17
Product brand with stores (II)
Turnover Prod/dist brands with stores Types Total Own Fran-
Stores chise
The Frederichoms Ownwear Men’s fashion 9 9 0
Superlinea, l’Home, Prioriti Large sizes 7 7 0
<5 M€ Kanak Large sizes 5 5 0
Jesús Peiró Weddings 8 1 7
Josep Font Designer 4 4 0
Boba Designer 2 2 0
Míriam Ponsa Designer 1 1 0
Antonio Miró Men’s fashion 9 9 0
Bath Time Household 3 3 0
Julie Sohn Designer 1 1 0
Pág. 22
Table of Contents
Project objectives
Principal trends in the business (textile)
Companies in Catalonia with brand strategies
Key factors for success of the Strategic Options
Suggestions for possible actions
Annexes
Pág. 23
Common points in growth strategies
Certain convergence in the implementation
of the strategies for success:
- Need for a very strong brand (created from
different means: fashion shows, advertising, the
stores themselves,... or everything combined)
- Direct control of distribution (whether it is its own
or franchised) although there are mixed
strategies with multi brand distribution
- Subcontracting manufacturing (where needed
and with quite different strategies)
Pág. 24
Strategic challenges
Principal decision variables
for Strategies for the Future
Geographical scope
- Internationalisation, location of the points of sale
Growth speed
- Franchises, own stores, multi brand
Broad range of product
Creation of new brands redefining segmentation
Brand licences towards other products
Pág. 25
Geox – Product brand with stores
Geographical scope
Turnover 2005: 455 Million €
Evolution of the number
Leading brand of footwear in Italy and of stores worldwide:
3rd in the world
400
372
Its own production represents 15% of the 350
total (in the Eastern countries) and the
remaining 75% is manufactured through 300 S 40.2% 278
third parties in Asia and Brazil 250 Others
198 USA
% of EBITDA/sales 2005 = 25.6% 200
Europe
150 130 Italy
The majority of the stores are franchises,
only 74 are their own 100 72
50
Internationalisation is a key strategic 0
focal point: 51% of the 2005 turnover
2001 2002 2003 2004 2005
comes from exports
2006 is estimated as a year of strong In the last 4 years, nearly 60%
growth with a foreseen turnover of 600 M$ of new store openings has
and the opening of 140 new stores. been on the international level
Source: Geox, Pambianco Final data for 2005. Sales in millions of euros Pág. 26
Yamamay (Inticom) – Channel brand
Speed of growth
March 05 June 07
Stores:
259 500 (expected)
Created in 2001, with the idea of being a franchise network for the sale of
undergarments; of the 259 stores, only 16 are directly owned by it, 9 are corners and
234 are franchises.
They have a studied presentation and communication (i.e., all the franchise owners
have to be women and their advertising campaigns are on a national level) combined
with a very competitive price-quality ratio
They import Chinese production and have outsourced the logistics in search of greater
efficiency
Turnover: 1,100
Stores: 200+180
BOSS Deluxe
Selection 1,044.5
BOSS Orange Casual
They have multiplied sales by 3 since 1995, thanks to the recovery of licensed
products and to the entry of new market segments.
Source: Hugo Boss Group Final data for 2004. Sales in millions of euros Pág. 29
The strategic challenges
Market intelligence?
Finding professional profiles?
How to
finance
Pág. 31
growth?
The stategic challenges MANAGEMENT
(Professionalised
business
Market Design Designers
management)
intelligence? Pattern makers...
Find profess.
Rental prices in the hottest areas (traffic of persons,
profiles? shopping centres...)
Logistics of the stores, software that connects stores
Store location
and central offices (and suppliers)
& Mgt?
Purchases & Cost of Opening New Store (80-100 m2)
logístics?
Transfer (highly variable) examples of 100-300,000 €
Brand mgt? Works and decoration: range between 100-200,000 €
Internationa- Initial stock
lisation? Monthly lease (+ guarantees): range between 6,000-
9,000 €/month
How to A rule can be established that is easy to remember:
finance 8-10 own stores mean 1 million € of investment
Pág. 34
growth?
The stores of the Paseo de Gracia
Gratacós
Ana Mora Brunella Montblanc La Peineta
Friday’s Proyect Yanko Jofrè
Santa Eulalia Rabat
Yves Saint Lauren Globe
Carolina Herrera La Mallorquina Kokaï
Escada Catimini Vinçon
Tous
Mango Vasari Podivm
Marella UC Benetton Louis Vuitton
Bulgari Armand Basi Suárez
Boulevard Rosa Sisley Chopard Chanel
Lacoste Desigual Pronovias Armani
Bagués Tascón
Loewe Replay
Ermenegildo Zegna Marina Rinaldi Burberry
Purificación García Max Mara
Pedro del Hierro Cortefiel System Action
Punt Roma
Tommy Hilfigher Adolfo Dominguez
Diesel
Marlboro Classics Vogue
Breil
Caramelo Salvatore Bally
Carrera y Carrera Lladró Ferragamo Bel
Miss Sixty Puma Roca Joiers
Gonzalo Comella
Zara
Feigar
Furest
Mango
Pág. 35
The strategic challenges
Market
intelligence? The growing subcontracting of production around the
world means having strong technical knowledge in order
Find profess. to purchase well
profiles?
Paradoxically, profiles of textile production and
Store location purchasing techniques will continue being necessary,
& Mgt? although with new capacities:
- Languages + ability to understand market trends (“Product
Purchases &
purchasing manager”)
logístics?
Subcontracting of the logistics to third-party providers
Brand mgt? (Logisfashion)
Internationa- Investment in intelligent warehouses as the single-brand
lisation? channel grows, whether in own stores or in franchises
Direct service from the supplier to the store, set up as
How to optimum solution for large companies
finance
Pág. 36
growth?
The strategic challenges
Market
intelligence? One of the great challenges in attaining a
Find profess. differential position in the market
profiles? - Segmentation / differentiation / ranking
Store location - Point of sale, merchandising, .....
& Mgt?
- Advertising (media, frequency...)
Purchases &
logístics? - Celebrities
Brand Mgt? - Fashion shows
Internationa- - Public relations
lisation?
- Flagship stores
How to
- Event management
finance - .....
Pág. 37
growth?
The strategic challenges
Market
intelligence? Complicated entry in certain countries
Find profess. because of not knowing the market and of
profiles? the need to locate agents (also for entering
Store location the multi brand channel)
& Mgt?
Access to markets considered “attractive”
Purchases &
but with entry barriers (Russia, Eastern
logístics?
countries, Middle East) signify the creation
Brand Mgt?
of new alliances on the international level
Internationa- (“Master Franchises”)
lisation?
Need to “focus and prioritise” – which
How to markets?
finance
growth?
Real estate market analysis! Pág. 38
The strategic challenges
Market
intelligence? Finance the cost of opening new stores
Find profess. Finance product stocks in the stores
profiles?
Increase expenses and investments of the
Store location central offices in order to serve more stores
& Mgt?
Purchases &
Transfers plus guarantees of the leases
logístics? Contracting new personnel
Brand Mgt? Investment in brand creation
Internationali- .....
sation?
Project objectives
Principal trends in the business (textile)
Companies in Catalonia with brand strategies
Strategic options for success
Suggestions for possible actions
Annexes
Pág. 41
Expected results / Possible actions
Information of a strategic nature
for companies, which serves for
BUSINESS reflection on future strategy
STRATEGY Initiate individual actions in the
line of the strategic reflection
Possible joint strategic actions
(collaborations)
+
Improvement of non-competitive
aspects of the business in
Catalonia (joint market studies,
training, improvement of local
IMPROVEMENT OF agents, access to financing...)
THE SETTING It involves the companies and
other agents (Administration,
training centres...)
Pág. 42
Suggestion of possible actions
Companies and Designers not integrated in retail
Pág. 43
Suggestions of possible actions
Companies and Designers not integrated in retail
Program of the CIDEM (Centre for Business Development and
Innovation of Catalonia): Reorientation of Productive
Activities
Beneficiaries: any organisation that has a business
plan of:
- Strategic change
-Strategic Plan of Reorientation of the
activity
-Business Plan defined on a new product or
service
- Structural change
Aids: Financing of up to 60,000€ in the first phase of
the strategic study and up to 200,000€ more in the
second stage of implementation
Pág. 44
Suggestions for possible actions
Resp. Org.
Market - Dissemination of use of market tools and to the
CIDEM
intelligence? conducting of studies for groups of companies
th?
Suggestion of possible actions
Resp. Org.
Market - Dissemination of use of market tools and to the
CIDEM
intelligence? conducting of studies for groups of companies
th?
Suggestions of possible actions
Market
intelligence? Dissemination among the companies of
the industry of the local training agents
(i.e.: Initial Training)
Find profess.
profiles? Agreements with the principal local
training agents for the review and design
of new contents
Purchases
and logistics? - Management > Business schools: MBA
in fashion management (Ref: SDA
Brand mgt? Bocconi, ISEM); Master’s degrees
specialised in Retail
Internationali- - Design > Design Schools: Itineraries,
sation? courses and post-graduate work in
business management and
How to
administration, brand management,
channel management...
finance Pág. 47
th?
Suggestions of possible actions
Market
intelligence? Promote joint initiatives among administration
and private companies to improve training:
Example: Smart Skills Initiative (UK)
Find profess. Objectives:
profiles? - Identify, direct and promote the abilities necessary
for working in retail
- Improve industry profile in the UK so that, together
Purchases with the retailers, it motivates and attracts the
and logistics? persons to carry out their professional career
Example: Fashion Retail Academy (UK, Sept. ’05)
Brand mgt? Founded and shared by the public administration and
by the principal fashion retailers (Arcadia Gr.)
Internationali- It offers two courses of one-year duration for young
sation? people between 16 and 18 years of age
How to
finance Pág. 48
th?
Suggestions of possible actions
Market
intelligence? Example: Training course of the Fashion Retail
Academy
Level 2 Diploma in Fashion Retail
Find profess. Core Units
profiles? - Customer Service and Selling for Fashion Retail
- The Retail Marketplace
- Technology for Fashion Retail
Purchases - Business of Fashion Retail
and logistics? - Supply Chain for Fashion Retail
- Store Presentation for Retail
Brand mgt? - Buying for Fashion Retail
- Merchandising for Fashion Retail
Internationali- - Professional Development in Retail
sation? - Fashion Retail Production
- Market Research and Branding for Retail
How to - Marketing & PR for Fashion Retail
finance - Visual Merchandising for Fashion Retail Pág. 49
th?
Suggestions of possible actions
Resp. Org.
Market - Dissemination of use of market tools and to the
CIDEM
intelligence? conducting of studies for groups of companies
th?
Suggestions of possible actions
Resp. Org.
Market - Dissemination of use of market tools and to the
CIDEM
intelligence? conducting of studies for groups of companies
th?
Suggestions of possible actions
Resp. Org.
Market - Dissemination of use of market tools and to the
CIDEM
intelligence? conducting of studies for groups of companies
th?
Suggestions of possible actions
Resp. Org.
Market - Dissemination of use of market tools and to the
CIDEM
intelligence? conducting of studies for groups of companies
th?
Suggestions of possible actions
Resp. Org.
Market - Dissemination of use of market tools and to the
CIDEM
intelligence? conducting of studies for groups of companies
th?
Suggestions of possible actions
Market
intelligence?
Find profess.
profiles?
Internationali-
sation?
How to
finance
growth? Pág. 55
Administration
Associations Venture Capital
Raw Mat. Sup.
Yarn. Fabric.
Clothing
Distribution
Dyes
channel
Consumer
Up-stream
Textiles
- Multi brand store
-Department stores
-Pure channel brand
Technical -Product brand with stores
centres & lab (own/franchises)
Supply
centres
Training
-Design Clothing integrated in retailer
-Fashion I.T. System
- Business Sch. Real Estate Franch. const. Mkt. studies agent
- U.K. textile Sch.
Consult.
-Mktg, sales
Commun. Agent Retail Cons.
Training
- Design: ELISAVA, ESDI-EATM, EINA, IED...
- Business schools: ESADE, IESE, EADA...
- Others: Initial training, ESCODI...
Branding consultants: Morillas, Summa, Grupo Grey, Firma, Cla-se...
Retail consultants: Plus Value, Kiss Retail, Retail&Trade, SGC
Consultores, Procom, I&MS, Axis Marketing...
Logistics services: Logisfashion, Danzas Logistica, UPS...
Market study agencies: Hamilton, One-Off...
Communication agencies: Equipo Singular, XXL Comunicación, Cla-se,
No-do Moda...
Franchise consultants: Tormo, SDEYF Group...
Establishment design and decoration: EMS Company, Discom...
I.T. systems: VCS Timeless, CSC...
...
Pág. 57
Suggestions of possible actions
Market
intelligence?
How to
finance
growth? Pág. 58
Suggestions of possible actions
Resp. Org.
Market - Dissemination of use of market tools and to the
CIDEM
intelligence? conducting of studies for groups of companies
Pág. 60