Romain Guinier of The Kooples says label’s online share of total revenue must rapidly reach 25%
May 28, 2020
In May 2019, Romain Guinier became president of quirky, upmarket French label The Kooples (founded by the Elicha brothers in 2007), soon after it was bought by Swiss group Maus Frères - since then renamed MF Brands.
This was before the Covid-19 crisis broke out. Guinier, who after significant stints at Louis Vuitton and Celio, was at the helm of footwear brand Aigle for 10 years, has talked to FashionNetwork.com about how The Kooples dealt with the impact of the lockdown period. He also described the ambitious plans he has for a company that generated a revenue of just over €220 million last year. The appointment of Tom Van Dorpe as creative director is a token of Guinier's bold aspirations and optimism.
FashionNetwork.com: First of all, what was The Kooples’s experience of the lockdown period?
Romain Guinier: We learned on the job, so to speak. We have 340 stores, and virtually all of them had to close down for two months. In the week of May 11, we reopened the core of our French shops, except those to which the restrictions on high-footfall stores applied. We think we’ll be able to reopen in the U.S. and the UK between June and July. Altogether, 80% of the business generated by our monobrand stores went into hibernation. Luckily, we already had a strong online presence. Last year, e-sales accounted for about 16% of our total. Our website’s sales grew by 60% in April. This trend seems to be continuing after the lockdown period.
FNW: In your opinion, what will the medium-term impact be?
RG: We are relatively confident this rough patch is behind us. Of course, there is no way we can make up for two months of virtually zero revenue, but online sales did enable us to compensate at least partially. The real issue is how quickly we will return to a normal state of affairs. Various studies are predicting the global fashion market will slump by 30% this year, and will not recover next year. It’s hard to say. But what I’m sure about is that [The Kooples] will beat those forecasts.
Looking at the performance of our group's brands, I find it more encouraging than expected. There is genuine uncertainty about the recovery in areas which are most reliant on tourism. But in terms of our [French] business, we are equipped for a return to normalcy that will be measured in months and not years.
FNW: You took charge of The Kooples a year ago. Does the current crisis affect the targets you set with MF Brands?
RG: The upside of being part of a group of companies owned by family shareholders means that the latter are comfortable with a long-term perspective. [MF Brands] previously relied on three labels: Lacoste, which has boomed in recent years, Aigle and Gant. They are all premium brands generating profitable growth. Buying The Kooples gave a more directional flavour to the portfolio, paving the way for similar [brands] in the future.
[MF Brands] has the means to realise its aspirations. The project of doubling the company’s critical mass in 4-5 years is still very much alive. Some investment has been postponed, and our plans will be pushed back by a few months, or at worst a year.
FNW: Which initiatives have you implemented since taking charge of The Kooples?
RG: To begin with, The Kooples was something of a UFO on the French ready-to-wear landscape. But in the course of 7-8 years it turned into a huge success, thanks to a unique concept which truly brought a breath of fresh air to the affordable luxury segment. It was a brand with great potential. Its underpinnings, its fundamentals are still relevant. They simply need to be managed more effectively than has been the case in the last two to three years. The Kooples is still 60% French, with over 200 of its 340 boutiques located in France. The label therefore has huge international potential. It needs an injection of energy, and it must reconnect with its DNA: that chic, irreverent mood, the kind of constant tension that exists in a couple that we had somewhat lost. Our real ambition is to become the benchmark for what we define as rebel elegance.
FNW: Does this necessitate a change in methods?
RG: We must adopt more stringent reporting and governance rules for the company. We have become more demanding in order to have a clearer insight into the business. The real issue was assessing the resources at the company’s disposal. In the first few months, my job was to provide purpose, direction and consistency to a company which had lost its collection focus.
“Sales for the fall/winter collection grew by approximately 8%”
FNW: Which course of action did you take in terms of collections?
RG: We streamlined them. They had ballooned, featuring over 1,300 items per season. Starting from the fall/winter, we cut them down to 900. We need to be able to tell ourselves “we are doing less, but better.” As a result, comparable sales for the fall/winter collection grew by approximately 8%; in other words, nearly 10 percentage points better than the market. This was due to a combination of many factors: a streamlined collection, a more effective in-store presentation, improved visual merchandising skills and better-managed promotional initiatives across the whole range.
FNW: Did you also adjust your pricing policy?
RG: We have realigned price-points in those categories whose prices had increased a little too much. I’m thinking, for example, dresses. Above all, our approach was to run promotions on a permanent basis, something that was liable to cloud the perception of our products’ true worth. We also worked at boosting the menswear range, putting fresh emphasis on tailoring and supporting this by making a new advertising statement. After three years, we featured a couple again, the first in a long series, because this is one of the elements at the roots of The Kooples’s brand image. And because of the brand’s irreverent personality, we mustn’t address couples that are too sensible, too traditional. This is what we’ve mostly been focusing on with Tom.
FNW: You recently named Tom van Dorpe creative director. Why this decision?
RG: The challenge we set Tom, who joined us at the start of the lockdown period [in France], is to find a way of bringing a little more sophistication to our range. To reinvent the rock ‘n’ roll style that is imprinted in [The Kooples]’s DNA. We want to make The Kooples the label with the most distinctive personality within the extensive contemporary fashion landscape. This can be achieved by introducing more balanced collections, smaller in size perhaps, but more inspiring. Together with our entire team, we embarked on a truly remarkable job.
We also have a new chief marketing and digital officer, Arianna Galante, who comes from [cloud customer relationship management specialist] Salesforce. We are busy setting up live events, creating playlists, introducing new ways of telling stories and engaging with our community, using a non-commercial approach that has been extremely effective.
FNW: Did the lockdown, and your e-shop's performance during the period, lead The Kooples to focus on digital initiatives, perhaps to the detriment of brick-and-mortar stores?
RG: We are working on eight, between new store openings and renovations in France, and four in [the rest of] Europe. We are expanding internationally. In September, we will open four flagship stores in Istanbul and Moscow. Further openings are on the cards in Germany, Spain, Switzerland and the UK. This year, we will also be opening concessions within department stores in Düsseldorf, Germany, and at El Corte Inglès in Spain.
But it's true that the online business is essential. This led us to accelerate the introduction of omni-channel tools, to step up our website-deployment pace in countries we weren’t available in. We’re working on five projects this year: in Canada, Turkey and Russia, among others. Countries where we have no presence, or where we are distributed in physical stores but have no direct retail footprint. And we set up marketplace partnerships with Zalando, where we recently established a presence. Our online business must rapidly reach a 25% share of our total revenue - previously, we didn’t quite envisage such a huge potential for acceleration.
FNW: Is it a change in consumption behaviour, or are you reorienting your investments?
RG: A little bit of both. The customer's purchasing path has changed considerably. Many people weren’t used to looking for or buying products online. Now they’ve acquired a taste for it. We’ve pampered our customers big time during the lockdown period, and they realised that a remote relationship can actually be ‘humanised’, that it won’t necessarily be disembodied.
FNW: The lockdown is having a strong impact on the fashion industry, especially inventory-wise. How are you dealing with this situation?
RG: No revolution, but we reacted fast to readjust our purchasing levels for the tail end of this summer's collection. For the coming fall/winter, we decided to keep some of the spring/summer best-sellers, which will serve us for the start of the autumn season. With Tom, we assessed how much overlap there could be between new designs for the spring/summer 2021 and products initially planned for summer 2020. We are under no obligation to sell off everything cheaply, unlike those labels that have been unable to react in time. And, even though one swallow doesn’t make a summer, it seems to me that the recovery here in France isn't the nightmare that many predicted.
FNW: The lockdown period has also been a time for reassessing the way the fashion industry works; its organisation, its rhythms. You may have discussed this internally. Any thoughts? Do you see The Kooples shifting back to sourcing from Europe?
RG: Sourcing exclusively close to home isn’t a dogma for me. Over 50% of our purchasing volume currently comes from nearby countries. Our tailored products are made in Europe. In other categories, we are going to adopt a double sourcing approach, to test alternatives closer to home. To become flexible again, and also because current foreign exchange trends, especially U.S. dollars, mean that it may be worthwhile to check whether alternative models are becoming viable.
Besides, fresh ideas are good. On the other hand, I’m on the side of those who think it’s time to calm things down. We are working on the assumption we will make our first autumn deliveries a little later than usual. We must find a way to still generate some anticipation, while being less frenetic about it. I think there is some room to manoeuvre in this respect.
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