Swimming against the tide, German brand Tom Tailor once again outperformed the average growth of Germany’s garment retail segment which finished the first quarter of 2012 with a marginal sales increase of just 1%, realizing a positive like-for-like growth of 17.7% for the 13th successive quarter. The performance is indeed remarkable considering that unemployment in the European Union reached its highest level in 15 years in February to 10.8%. According to the EU statistics office Eurostat, 10.2% of Europeans are unemployed, which translates into 24.55 million people without jobs. With the fiscal crises deepening, a continued rise in unemployment is inevitable reducing spending power and impacting sales of products not considered ‘essential’. Yet, Tom Tailor recorded a remarkable retail segment growth of 45.6% to EUR 25.5 million in the first two months of the year 2012…
Continuing to defy the economic upheaval in the EU, Tom Tailor is claimed to be one of the fastest growing apparel companies in Europe, with a brand awareness of 93% in Germany, and strong presence in Austria and Switzerland, all based on its successful management of fashion trends, consequent implementation of its strategy of offering high-quality casual wear at an attractive price and the accelerated expansion of its controlled retail space. Tom Tailor’s biggest advantage has been its strategy of quick reaction to international trends with high-quality merchandise earning it the reputation of a “fashion follower”. Identifying and adapting the current fashion trends around the world, the company quickly and analytically develops new collections every month, each with up to 80 pieces for each of the five product lines, and at an attractive price performance ratio. Banking on its shorter lead times, the company needs a maximum of five weeks to get a high-fashion product from the development stage to the stores.
[bleft]The brand ideology is simple: Casual fashion for a casual life. Identifying and adapting the current fashion trends around the world, the company quickly and analytically develops new collections every month, each with up to 80 pieces for each of the five product lines, and at an attractive price performance ratio.[/bleft]
The brand ideology is simple: Casual fashion for a casual life. Concentrating on seasonal trends, colours and sophisticated patterns that portray a relaxed attitude, while the men Casual line targets a mid range price segment featuring small and restrained details that add a touch of sophistication, the women Casual line focuses on trendy highlights, elaborate details and high-quality fabrics as typical features. The kid’s product line for boys and girls aged between 8 and 14 comprises of casual, functional street wear featuring a wide variety of styles inspired by the latest trends, combining functionality with fashionable designs and optimum fit. Apart from the former three, the company is known for its denim line, inspired by the world’s fashion capitals with hip patterns, trendy washings and carefully selected details for young adults, along with a range of latest accessories that include bedding, underwear, glasses, bags, shoes and watches.
The consistent growth of the company also largely depends on its successful business model of being a vertically integrated supplier that allows it to react immediately to specific customer demands. Having a full control over its entire value chain, the company banks on its analytical design process combined with short lead times, reliable procurement structures, a strong global distribution network and pronounced market proximity for growth. Also its wholesale volume based business helps the brand to offer a broad target group with high-quality products at affordable prices selling large quantities of stock via established department stores, clothing chains and mail order companies.
Investing heavily on its sale spaces such as retail stores, franchise stores, shops-in-shops and the e-commerce business, the company from 71 stores in 2010, today operates with more than 254 retail stores throughout Europe which has helped in building a direct contact with the customers to evaluate first-hand on how the consumers respond to new collections, which articles are particularly popular and sell out quickly. Tailoring the offerings accordingly then brings the product close to the needs of its customers, and therefore increasing overall revenue.
Tom Tailor’s e-commerce trading has been one of the prime reasons of additional growth in the past two years, attaining disproportionate growth of 45.3% in sales, as this platform also proves to be an ideal distribution tool for appealing to the company’s lifestyle-oriented young target group. In mid-March, the company launched a long-term TV marketing campaign to further strengthen the Tom Tailor brand and its e-shop business, which had an immediate impact on sales. “In March 2012 our e-shop recorded an increase in sales of 96.6% compared to the same period of last year. This impressive growth proves that our decision to invest in TV advertising was the right step,” says Dieter Holzer, CEO of Tom Tailor Holding AG.
Future plans of the company include expansion of its own controlled sales space in Germany, Austria and Switzerland, eyeing Poland as its next logical location. While the group intends to open another 60 to 70 retail stores in 2012, it will also continue to invest in e-commerce, which is of particular relevance to its younger target groups and the wholesale segment is expected to add between 200 and 250 shops-in-shops, as well as 20 to 25 franchise stores in 2012.
