Fashion – or in other words, the clothing you put on in the morning – is all about identity. Just as our forefathers chose beads or colored cloths to show which tribe they belonged to, this century we pick out suit jackets, sneakers or silk scarves to indicate our social standing and professional tribe.
And this area – identity – is where the German fashion industry is having serious issues. Faced with the challenges of globalization and a new digital world, neither high nor mainstream German fashion really seems to know what it wants. In an industry where appearance – and branding – is everything, that’s a big problem.
Closing stores, cutting jobs
“We are having these problems today because we have the same classic combinations hanging in our stores that were there 15 years ago,” Johannes Ehling, the head of middle-of-the-road German fashion brand Gerry Weber conceded to Handelsblatt recently. The apparel company, founded in 1973, also owns the Hallhuber, Taifun and Samoon brands and despite a turnover of €795 million, closed last year €148 million in the red. Ehling, who has only been in the job since late last year, has until the end of this month to come up with a plan to solve the family-founded firm’s problems – it is over €200 million in debt.
As part of the solution, Ehling has promised a younger, more exciting collection in stores but he will also be closing 230 out of 820 sites and, although the numbers are unconfirmed, he may also be cutting 900 of 6,500 jobs at Gerry Weber.
Gerry Weber isn’t the only mainstream German company having these kinds of issues. The German apparel sector has been stagnating for a decade now, according to Achim Berg, a Frankfurt-based expert in the business at the McKinsey consultancy and co-editor of the annual State of Fashion report. “That won’t change over the next few years,” Berg notes. Brands will only be able to grow in Germany if they can deal with “the cut-throat competition,” he says.
Mid-market fashion chain C&A is a good example of the problem. It has 1,900 stores in 21 countries, including 500 in Germany, and employs 51,000 but is under attack from both ends of the fashion spectrum. Budget retailers like KiK, Primark and various supermarkets threaten it from below while successful chain stores like Zara, with a slightly higher price point, draw customers away at the top.
Can't tell them apart
Another major problem is that it is almost impossible to distinguish one mainstream German clothing label from another – styles, trends, prices and indeed even the brand identities – are often virtually interchangeable.
“The fashion sector is not moving enough – they all seem to be frozen,” says Anita Tillmann, a mover and shaker in Germany’s apparel industry: She heads the Premium Group, which runs several successful fashion trade fairs in Berlin during Fashion week and also helped found the German Fashion Council. “I don't wonder why so many of them are not doing well. I wonder why there are so many brands and stores.”
Many of the country’s mainstream labels and stores – names like Gerry Weber, Esprit and Tom Tailor – have been focused on opening more shops and seen ongoing growth as the way forward instead of focusing on product quality, design and the customer experience, Tillmann argues.
Both she and Berg say that Germany’s beleaguered middle-of-the-road fashion labels have been too reliant on past successes and a positive German economy for too long. They need to concentrate on competing better with international brands, reacting faster to fashion trends, cutting costs and working on their online businesses, both experts say. Adidas, the sports apparel maker, is a rare example of German success, although it is still much smaller than its arch rival Nike.
Meanwhile at the other end of the fashion spectrum, things don’t look that much more promising. Berlin Fashion Week begins Tuesday and over the past few years, numbers of all kinds have fallen. Tillmann’s trade fairs are doing well but the number of runway shows by important, internationally successful or interesting local labels has decreased, the amount of important media and buyers coming to watch them is shrinking and the money sponsors are willing to spend on the event has also dropped. In 2017, the main sponsor, Mercedes Benz, began restricting its spend on the week.
While fashion weeks in Paris, Milan and London all have their own distinct identities – read: couture, luxury and creativity, in that order – Berlin has been struggling to figure out what the city and the German industry really stands for since the event began in 2007. Local designers have also criticized the event, saying it was not professional enough, that the runway shows were dull and that it was more of an opportunity for entertainment and celebrity sightings than anything to do with the business of fashion.
The apparel manufacturing and fashion media centers are elsewhere in Germany and, faced with demands for attention from other fashion weeks such as in Copenhagen, significant international interest has been declining for several seasons.
McKinsey industry consultant Berg believes that 2019 will be the year that makes or breaks Germany’s old-fashioned fashion stalwarts. If the country’s economic boom really is over, or at least slowing, then the sector most often criticized for its vanity will finally need to take a long, hard look at itself in the mirror. It may not like what it sees.