INNOVATION DRIVES FASHION FORWARD

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INTERVIEW | ABG President: How To Leverage The China Market To Revive A Brand

January 15,2020

“Brands never die; it's their business model that goes wrong.”

Nick Woodhouse, President and Chief Marketing Officer of Authentic Brands Group (ABG) told Luxe.CO. that the news of the recent sale of US high-end shopping mall, Barneys, had spread throughout the fashion industry, with ABG as one of a consortium of buyers. ABG had been dubbed by the media as the "good doctor”, tasked with reviving the brand due to its experience in acquiring brands that have been poorly managed, and rediscovering the brand value based on asset-light strategies that regain consumers’ attention.

Nick Woodhouse recently sat down with Luxe.CO in Beijing to discuss ABG’s exploration of rebranding opportunities, as well as the group's future plans in China.

How To Discover The True Value of Brands And Rebuild Brands

ABG now operates in more than 70 countries and has annual brand sales of almost USD$10 billion. The group has 53 brands/IPs, which are divided into 5 categories: fashion lifestyle brands, luxury brands, sports brands, household brands and celebrity & entertainment brands, such as Volcom, Nine West,  Juicy Couture, Nautica, Spyder, Sports Illustrated, and the personal brands of cultural icons like Marilyn Monroe and Muhammad Ali. For example, after completing its acquisition of the sports brand, Volcom, at the end of 2018, ABG pushed Volcom to replace the snowboard brand, Burton Snowboards, as the official apparel sponsor of the US Snowboard National Team. This meant that all American snowboarders would be wearing Volcom to the Beijing Winter Olympics in 2022, creating an opportunity for ABG to bring Volcom into the Chinese market.

ABG has been active in China's competitive ski and lifestyle market, and Spyder (a US professional ski brand rebranded by ABG) recently announced its entry into the Chinese market with the opening of its first flagship store in THE MALLS AT ORIENTAL PALAZA Beijing. As for the criteria for acquiring brands, Nick Woodhouse said: "We choose to buy brands that have market recognition and global growth potential, but have had some problems with their business model.” When acquiring a brand, ABG's team will conduct extensive research to determine the root cause of the poor brand management. After the acquisition, in addition to solving the brand’s existing problems, the ABG team will carefully study the brand’s history to help to rediscover its value. However, it will not be directly responsible for the operation of all the brands it acquires; instead, it seeks strong partners in different countries to operate together, to find the most suitable development model for different markets for the brands to start to grow again.

How To Revive A Brand In China

How do brands revive themselves when faced with the Chinese market, which is the world's biggest consumer market? ABG recently announced that it would form a partnership with the Zhejiang Semir Garment Co. to expand the Juicy Couture retail business in China. As Nick Woodhouse said, "In the US market, we usually look for partners who have good retail resources, but in the Chinese market, we need to pay more attention to whether the partners have good e-commerce and shopping mall resources, and even government relations, which are very important. "

In this collaboration, Semir will be responsible for Juicy Couture's product design, procurement, production, distribution, store opening, brand marketing and other aspects and ABG will also be involved in all the decision-making in order to control the brand's overall characteristics in different global markets. According to Nick Woodhouse, this type of cooperative model enables the brand to be more flexible in terms of product design, marketing and other aspects. For example, Juicy Couture uses a new fabric with mesh for its latest design, which is very different from its previous designs. This fabric makes its sportswear cooler to wear in the extreme heat in Shanghai in August. These kinds of innovative designs are based on the DNA of the brand and tailored to the needs of users in the local market.

"We have every confidence in our partners. After all, it's hard to be in New York and see the detailed needs of every market. The most important thing is to integrate the American brand into the Chinese market, "said Nick Woodhouse. ABG has currently introduced some of its other brands, such as Nautica, Spyder, Vision Street Wear and Airwalk into the Chinese market based on cooperation with partners such as Shanghai Tristate and Shanghai Fanjin.

Nick Woodhouse believes that more of the group's brands, such as Volcom, NineWest, Frye and Judith Leiber also have potential in the Chinese market in the future. Judith Leiber particularly has not entered the Chinese market yet, but many Chinese stars have carried this luxury handbag on the red carpet. ABG also plans to find a Chinese partner for Barneys, the luxury department store it has just acquired. As Nick Woodhouse says, "China is a huge market and many consumers will probably never buy luxury brands, either because they can't afford them, they don't know the brands, or they simply don't want to buy them. Our brand matrix, which covers China's first-tier to fourth-tier cities, is geared toward a wider range of Chinese consumers, and that's where we differ. "

In the end, Nick Woodhouse believes that many brands that have come to China still follow the American and European model, which may have worked in the past, but not now. Today, China has become the leader in the fashion industry, an innovator in business models, and is gradually influencing the Western market. “So our number one development strategy in China is to think like the Chinese." In the future, ABG plans to focus on data and social media platforms in the Chinese market, and establish its own digital marketing team in China in the fall of 2020 to provide more localized marketing for its brands. "It's very different from what we do in the US. We are more aggressive in China.”

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