Ahlers AG is a leading listed manufacturer of men’s fashion in Europe. This innovative and well-capitalised company looks about 100 years of swift and flexible adjustment to the requirements of the times and the markets.
For many decades Ahlers has been a reliable partner to mid-sized and major specialist retailers. Ahlers is one of the major European players who live up to high standards of quality both in terms of their brands and their products.
Objectives and strategy
Solid, sustainable and profitable growth is the objective for the medium-term development of our company. The following strategic measures are designed to help achieve this goal:
Strategy – the business segments
• Price-graded, attractive brands in the quality segment of the apparel market
as well as high-quality workwear under the
Pionier Workwear brand
• Wholesale to physical retail stores, chain stores and department stores
• Mono-brand stores in some selected markets, especially in Eastern Europe
• E-commerce with own online shops, multi-brand platforms and retailers’ online shops
• Europe as well as selected international markets, e.g. Canada and China
• Innovative and fashionable high-quality menswear
The growth strategy
Pierre Cardin, Baldessarini and Pioneer
Ahlers generates over two thirds of its revenues in the attractive premium segment of the fashion market. We intend to drive domestic and international growth through our Baldessarini and Pierre Cardin brands. To achieve this objective, a focus will be placed on sharpening the brand profiles, expanding the collections and intensifying our operations in the international markets. For Pierre Cardin, we want to optimise revenues per square metre in Germany and launch target-oriented product innovations. With the start-up of the Russian subsidiary, we have installed a sales organisation for Pierre Cardin to intensify existing customer relations, e.g. through the introduction of NOS services, to win new customers and to optimise the existing eleven stores in Russia. We want to push ahead with the expansion of the Western European markets such as France and Spain as well as the Europe-wide expansion of points of sale. For Baldessarini, the focus will be placed on intensifying the jeans business and revising the market positioning with regard to products and prices. We also aim to internationalise the brand in Europe. In addition to the premium brands, the Pioneer Authentic brand will be turned from a jeans specialist into an integrated lifestyle brand offering not only jeans but also tops. We want to grow primarily at the specialist retail level and will therefore continue to refine our partnership schemes and POS concepts. Moreover, the distribution activities of the Pioneer/Pionier jeans family are to be pooled and strengthened.
We want to expand our own Retail operations selectively and optimise existing store concepts. Being a fast growing distribution channel, the e-commerce segment is of great strategic importance and will therefore be strengthened further organisationally, with priority attached to wholesale e-commerce distribution. In this context, a focus is placed on both e-commerce specialists and the e-commerce activities of the physical retailers. Licenses are to expand the product ranges of our brands and strengthen their respective brand identities.
Growth in conjunction with specialist retailers
Stationary specialist retailers will remain the most important sales channel for menswear. Revenue growth is to be generated through sales in branded shop-in-shop spaces which also have special significance in terms of gaining optimum brand exposure. Moreover, we pay special attention to improving sales revenues per square metre. At the same time, we continue to develop and improve our internal restocking and visual merchandising processes for the branded retail spaces. The partnership programmes, cooperation schemes and the service quality are analysed and optimised on an ongoing basis. Besides the physical retail stores, the focus is placed on the e-commerce activities of our customers.
Increasing the international business
With international sales revenues already accounting for as much as 46 percent of total sales revenues, Ahlers is a successful European player. By systematically expanding the local sales organisations, we aim to further increase our sales revenues in Europe. In doing so, we will grow our business with selected retailers but also our own stores and partner stores. Outside Europe we aim to grow our Baldessarini brand in the medium term. Distribution in Asia started in the fiscal year 2017/18.
Growth of the e-commerce activities
For all our brands, a focus is being placed on winning online dealers in Europe and on internationalising the marketplace business. Ahlers therefore concentrates its e-commerce distribution activities in the online wholesale business. Ahlers moreover operates three online shops of the Pierre Cardin, Baldessarini and Pionier Workwear brands. We intend to grow our operations in this increasingly important distribution channel for the clothing sector with our three e-shops of Baldessarini, Pierre Cardin and Pionier Workwear and by selling our products on marketplaces.
Growth of own Retail operations
Strategically, Ahlers relies on mono-brand stores of the Pierre Cardin and Baldessarini premium brands, which are optimised and refined constantly and which are operated by our company or by our partners, primarily in Eastern Europe. The further expansion is supported by ongoing analyses of locations in Germany and abroad. In individual case, we take over partner stores.
Cost leadership in procurement and logistic processes
The optimisation of procurement and logistics is an ongoing challenge to the clothing sector. Ahlers constantly aims to choose the best suppliers and the most favourable logistic processes with the objective of optimising our quality, reliability, speed and procurement costs. We constantly review existing and new locations and suppliers with a view to ensuring a reliable, cost-efficient manufacturing organisation that meets our quality and social standards. In the medium term, we aim to change our procurement activities for jeans and suits to full-package services. We will continue to expand our procurement activities to the southern Mediterranean and reduce production in Poland. At the same time, the Group’s unfinished goods logistics were relocated from Germany to Poland in February 2019. Further logistic activities will be handled out of Poland as of mid-2019. Compliance with social standards remains a precondition for signing up suppliers and service partners.
The 2018/19 set of measures aimed at increasing earnings and efficiency
• Announced in September 2018
• Focus on menswear in fashion Business
• Details of the individual measures:
• Discontinuation of the sportswear activities of the Jupiter brand
• Relocation of unfinished and finished goods logistics to Poland
• Relocation of sampling processes from Poland to Asia
• Intensification of full-package service arrangements, especially for jeans but also for menswear
• Closure of unprofitable stores
• General cost reduction
• Figures of the set of measures
• Job cuts by 2020: 130, of which 100 in Germany
• One-time effects in 2017/18: EUR 5.0 million
• Effect on bottom line from 2020: approx. EUR 4.0 million, partly already in 2018/19