AWWG expects revenues of 585 million euros as it refines its Pepe Evolution strategy
The All We Wear Group, owner of fashion brands Pepe Jeans, Hackett and Façonnable, as well as distributor in Spain and Portugal of Calvin Klein and Tommy Hilfiger, is reaping the rewards of its ongoing transformation. The company expects to close the 2022-2023 fiscal year this coming March with revenues of 585 million euros, sales growth of 20% and its Ebitda 60% higher than in fiscal year 2021-2022.
"It has been a phenomenal year. We are seeing our strategies progressing and our financial results reflect this," said Marcella Wartenbergh, CEO of the company since the end of 2019.
The executive joined AWWG (then still called Pepe Jeans Group) with the task of transforming the company and a clear plan of action. Three years and a pandemic later, Marcella lists three key milestones achieved along the way: "We have increased the value of our brands along with the identity of each one. We have managed to centralize and decentralize at the same time, i.e. to have a very powerful platform that supports all the brands; we are now a group, not three individual brands. Finally, the team has taken responsibility for this change and is proud of it".
During this period, AWWG has also opened new headquarters in Madrid. The group employs more than 4,000 people and operates in 60 countries with 5,000 points of sale and 500 mono-brand stores. Against this backdrop and given the results of its transformation plan, where is its strategy heading now?
"Our transformation is not going to stand still anymore since the world today is constantly evolving. And, especially in the fashion industry, we have to keep changing day by day. Our plan continues to evolve, but our five priorities remain the same," said the CEO.
From product to distribution: AWWG's challenges
Product and brand, distribution, consumer engagement, digitalization and people are the pillars of this strategic transformation, which are broken down into specific plans and actions for each brand. Particularly noteworthy is the Pepe Evolution strategy that the company will roll out starting with its Fall/Winter 2023-2024 campaign for Pepe Jeans, the brand that generates 58% of the group's revenues.
The British firm will celebrate its 50th anniversary in 2023. Pepe Evolution is a strategy to ensure that the company "remains relevant to the consumers of today and tomorrow," said Wartenbergh. In addition to elevating the brand's image, optimizing its price-quality ratio and executing specific communication and marketing initiatives, the strategy involves the launch of a new e-commerce site and the development of a new store concept in which products play a key role.
The renovation of Pepe Jeans' 200 stores will kick off next fall and is expected to be fully rolled out within two years.
The group implemented a similar strategy a year ago at Hackett, a brand that generates 30% of AWGG's revenues, "and we can already see the results," said the CEO. The All We Wear Group started a couple of months ago to rebrand Façonnable, a brand that accounts for 2% of the group's sales, which will take effect as of this spring-summer season. In addition, it plans to open one store per month over the next two years, with a particular focus on France.
"We cleared the garden before putting down the seeds and we are already launching products that are closely linked to the history of the brand. We have grown in Nice, where the design team is based, with very talented people and our goal is to go back to the roots of the house," said Wartenbergh.
Meanwhile, the distribution of the two PVH-owned brands, Calvin Klein and Tommy Hilfiger, accounts for 10% of AWWG's revenues. In 2022-2023 (according to the group's forecasts), the wholesale channel will grow by 10%, the retail channel by 27%, concessions by 22% and e-commerce by 35%.
In line with other pillars of its strategy, the company plans to continue strengthening its team, establishing partnerships with celebrities to increase the visibility of its brands and boosting their online presence. "Let's not forget that digital is not only about sales, but a platform for brands. Of course, there is also the digitalization of internal processes, which we continue to work on," she added.
In line with this global strategy, the company aims to increase sales by 30% to 650 million euros by 2025-2026 and to increase its Ebitda by 60% during this period.
Looking ahead, how does the board of directors see the industry's near future? "The fashion industry has always played an emotional role and will always exist in everyone's life. It is important that we make sure that we remain part of those emotions. One of the challenges we face is that we live with four generations, from baby boomers to generation Z, who have very different expectations and needs. And, as employees and consumers, we need to understand them and guide them," she concluded.
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