S.Oliver Group co-CEO: “You can’t immediately consult the market on strategic decisions”

Since the Rellecke brothers took over the management of the S.Oliver Group last year, the company has not been taking a cautious approach in its German base of Rottendorf. Brands are being repositioned, structures are being changed and the portfolio is being further developed. In addition to S.Oliver, QS, Comma, Liebeskind Berlin and Copenhagen Studios, the group now also includes Lala Berlin. In May, the brand rights for Baldessarini were also added.

Johannes Rellecke speaks with noticeable enthusiasm about one of the strategic decisions: the relaunch of Lala Berlin. The brand is currently developing into a flagship project. It is perhaps also proof that fashion, even in a difficult market, needs one thing above all: desirability. In our conversation, the co-CEO of the apparel group explains why strategic decisions cannot be democratic. He also discusses why we all need more optimism today and why an industry that likes to criticise should feel free to simply say “I like it” more often.

You have made a significant strategic shift with Lala Berlin. What was the idea behind it?

S.Oliver Black Label was a feminine sub-brand of the main S.Oliver brand. In our view, the brand stretch was far too great. The core of the parent brand was in danger of becoming increasingly diluted as a result. We therefore decided not to continue with it. With Lala Berlin, we have a strong brand in our portfolio, so why shouldn't we use this potential? We opted for a classic brand flip, using Lala Berlin instead of the sub-brand and positioning it more towards the premium segment without sacrificing its commercial fashion appeal. This was one of our first major strategic decisions.

Of course, this initially caused discussions and even some dismay. However, everyone has now come on board. The naming and the emotional punch that Lala Berlin brings with it create a completely different effect. It is a clearly positioned brand with its own DNA. Added to this is the collection: feminine, print-heavy, bold and colourful. This is working extremely well at the moment. In terms of year-over-year development, it is currently our strongest collection.

Was this also a case of having to make a decision and accept that not everyone will be convinced at first?

Absolutely. You cannot immediately consult the market on strategic decisions. Otherwise, you end up not making any decision at all. Do not get me wrong, the market is crucial, so we listen carefully and involve all stakeholders. At some point, however, you have to commit and say: This is the path we are taking.

How are you finding the mood among retailers at the moment?

It varies greatly. There are retailers who are doing well despite the difficult market conditions. They are open, pushing ahead and adapting their approach. Others are entering the season much more sceptically and are more affected by the general consumer reluctance to spend and declining footfall. We are also feeling this decline in footfall in our own stores.

At the same time, we find that the majority of retailers are receptive to new ideas. We are seeing this with Lala Berlin in particular. We are currently up around 40 percent year-over-year and have gained around 60 new customers for a brand that has existed for more than 20 years. That is quite remarkable. If the concept, branding, collection and styling all fit together, you can still inspire people even in a difficult market environment.

With Lala Berlin, you are focusing heavily on colour, prints and emotionality. At the same time, minimalist looks and quiet luxury continue to perform well. What does this say about the market?

I believe these customers will always exist: people who prefer a less flamboyant appearance. More minimalist looks and brands like Comma or Copenhagen Studios, which represent exactly that, are still extremely strong. Consistency is sometimes underestimated in fashion. By the time a trend has reached the mass market, others have long since moved on to the next big thing. A clean, casual and reliable outfit remains a safe bet and must continue to be catered to.

The purchasing impulse simply works differently for them. Someone who wears this style does not really need anything new, but rather a fresh “update”. You have to approach this customer differently. Perhaps she needs the navy piece again in grey or a new version of a familiar product. The degree of innovation is no lower here; it is expressed more in the details. This is more challenging, but it also presents opportunities.

The industry traditionally views change very critically. Is criticism sometimes confused with competence?

In the current market phase, it is more difficult for the industry to embrace change. However, it is also okay to simply like things. Fashion is, after all, an emotional product. In the case of our brand strategy decisions, we are delighted by the willingness to change.

You have initiated major changes in a relatively short period of time. When will you really know if the strategy has paid off?

Changes take time. The real acid test for all the brands in our portfolio is ultimately their performance on the shop floor. Success in the sell-in is the first important step. In the end, the end consumer decides whether the concepts and collections work. I am completely convinced of this. We have also tested this with Lala Berlin and can see that it immediately triggers a different emotion. I am therefore very curious to see how the brand is received at the retail level. I firmly believe that we have taken the right path.

Despite the difficult market situation, you sound remarkably optimistic. Is this perhaps exactly the attitude that fashion needs right now?

If you are not a chronic optimist, there is no point in even starting, and certainly not in investing in the fashion industry. For example, I would never have championed Baldessarini so strongly and invested in the brand if I was not convinced that there is a gap in this segment: premium menswear in the sense of affordable luxury, priced below Boss, with a clear signature and an attractive margin for retailers. I see enormous potential in that.

At the same time, Baldessarini already has a certain desirability and a history that can be rekindled. For such decisions, you need optimism. Otherwise, there is no need to reposition brands or restructure collections. I believe that the mood and spirit within many companies are much better than they sometimes appear from the outside. Of course, one cannot gloss over the industry's problems. One does not have to constantly wait for the next crisis either.