The German shirtmaker van Laack has seen better days. Sandwiched between Düsseldorf and the Dutch border in the soccer-loving city of Mönchengladbach, the privately-owned luxury fashion brand is best known for its €200 shirts with patented three-hole buttons. Co-owner Christian von Daniels is dealing with rumors that his partner has approached outside investors, wanting to sell his shares.
“A person will report bad weather when the sun is already shining again,” is Mr. von Daniels' response to the rumors. The verbose owner is not interested in selling van Laack, especially after investing his own money to give the company a booster shot. Christoph Neizert, who owns 49 percent of the company and prefers to remain behind the scenes, says he too is uninterested in selling, but he has not put in his own capital.
It's a perfect example of the disconnect that persists between the two owners, who bought the 137-year-old van Laack in 2002.
The cash injection, Mr. von Daniels hopes, will help make up for the incremental loses the company saw over the last three years. Germany’s market for dress shirts, worth around €3 billion, has seen an overall decrease, and van Laack’s turnover responded accordingly, dropping from €64 million to €59.4 million. Profits dropped from €5 million to under €2 million.
Van Laack is now trying to fight off competition from mid-range manufacturers, such as Olymp, Eterna and Seidensticker, which are moving towards luxury shirt production, and Swedish labels Eton and Stenstrom, already well-established, for their slice of the shrinking market.
The question is how they plan to save van Laack's stores.
The question currently unanswered is how Mr. von Daniels and Mr. Neizert plan to reverse the downward trend and save the company’s stores and overseas factories. Market expansion seems unlikely, as an international venture nearly a decade ago went horribly wrong.
The German duo set their sights on Australia and acquired a majority stake in two fashion chains: Rhodes & Beckett and Herringbone. Over the course of 10 years, all 30 shops were liquidated. The matter has since been taken to court: Mr. von Daniels puts the blame on the companies’ former managing director, accusing him of falsifying books, evading taxes and other illegal activities. The manager denies the charges and claims that Mr. von Daniels and his partner purposefully drove the Australian companies into the ground.
According to Mr. von Daniels, the fiasco has not affected van Laack’s business operations. But such a haunting experience won’t soon be forgotten. And Mr. von Daniels now has other ideas for boosting business that focus on the domestic market.
The town where van Laack is based has its own soccer team, Borussia Mönchengladbach, that is building a new hotel, club museum and fan shop close to the home stadium. Mr. von Daniels wants to strike a deal to convince soccer fans to trade in their jerseys for €200 button-down shirts. His optimism is impressive.
This article first appeared in Handelsblatt's sister publication Wirtschafts Woche. To contact the author: [email protected]