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. News of the recent sale of US high-end shopping mall Barneys has spread through the fashion industry, with ABG as one of the consortium of buyers. ABG has been dubbed by the media as the "good doctor”, tasked with reviving the brand due to its experience in acquiring the brands with poor management, and rediscovering brand value through asset-light strategies that regain the attention of consumers.

Recently in Beijing, Nick Woodhouse sat down with Luxe.CO to talk about how ABG is exploring 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 nearly USD$10 billion. There are 53 brands/IPs under the group, 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, as well as cultural icons such as Marilyn Monroe and Muhammad Ali’s personal brands.

Take the sports brand Volcom as an example after ABG completed its acquisition of Volcom at the end of 2018. ABG pushed Volcom to replace snowboard brand Burton Snowboards as the official apparel sponsor of the US Snowboard National Team. That meant that all American snowboarders would be wearing Volcom to the Beijing Winter Olympics in 2022, creating an opportunity for ABG to bring Volcom to the China market.

ABG has been active in China's competitive ski and lifestyle market, and recently Spyder (a US professional ski brand rebranded by ABG) announced its entry into the China 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 find out the root cause of poor brand management. After the acquisition, in addition to solving the existing problems of the brand, the ABG team will also carefully study the brand history to help the brand rediscover its value. However, ABG will not be directly responsible for all the operations of brands that it acquires — instead, ABG seeks out strong partners in different countries to operate together, to find the suitable development model for different markets for the brand to help it realise growth again.

How To Revive A Brand In China

When facing the China market —- the world's biggest consumer market, how do brands revive themselves? Recently, ABG announced that it would partner with Zhejiang Semir Garment Co. to expand the Juicy Couture retail business in China.

"In the US market, we usually look for partners who have good retail resources. But in the China 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, "said Nick Woodhouse.

In this collaboration, Semir will be responsible for Juicy Couture's product design, procurement, production, distribution, store opening, brand marketing and other aspects. ABG will also be involved in every part of the decision-making to control the brand's overall characteristics in different global markets. According to Nick Woodhouse, this type of cooperative model helps bring more flexibility to the brand across product design, marketing and other aspects.

Juicy Couture's latest design, for example, uses a new fabric with mesh, which is very different from its previous designs. This is due to the extreme heat in Shanghai in August, with the design making its sportswear cooler to wear. Such innovative designs are based on the DNA of the brand and are 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. Currently, through cooperation with partners such as Shanghai Tristate and Shanghai Fanjin, ABG has also brought some of its other brands such as Nautica, Spyder, Vision Street Wear and Airwalk into the China market.

In the future, Nick Woodhouse believes that more of the group's brands such as Volcom, NineWest, Frye and Judith Leiber also have potential in the China market. Judith Leiber, in particular, has not yet entered the China market, but many Chinese stars have used this luxury handbag on the red carpet. ABG also plans to find a Chinese partner for Barneys, the luxury department store that it just acquired.

"China is a huge market and many consumers will probably never buy luxury brands, either because they can't afford the price, or because they don't know the brands, or simply don't want to buy. And our brand matrix, which covers China's first-tier cities to fourth-tier cities, is geared toward a wider range of Chinese consumers, and that's where we differ, "said Nick Woodhouse.

At the end, Nick Woodhouse believes that many brands who have come to China still follows the American and European model, which may have worked in the past but is no longer working now. Today, China has become a leader in the fashion industry and 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 China market, and set up its own digital marketing team in China in the fall of 2020 to provide more localised marketing for its brands. "It's very different from what we do in the US, we're more aggressive in China.”

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