Pepe Jeans - beating the trends
This week Fusion Associates speaks to Nish Soneji, the MD for Pepe Jeans.
Boasting a successful history dating back three decades and now operating in some 42 different markets worldwide, Pepe Jeans has seen an annual compound sales growth of 23 per cent over the last seven years.
Having witnessed less prominent denim brands come and go in the marketplace, what advice does the company have for other jeans brands and what has been the key to its success?
Nish Soneji, managing director of Pepe Jeans, has been with the firm for the last 20 years and has strong ideas about its philosophy. He explained why he believed the group was able to set itself apart from its competitors and predict growth of between five and seven per cent for 2009.
"I think it's the honesty between the consumer and the brand. I think that as a brand we've always been orientated towards making sure that we at least meet, if not exceed, our customers' expectations in terms of cost. "The winning formula for any brand is to give the customer a lot more than they would expect for the price."
So how has the company found trading conditions in the current economic climate?
Despite operating in the premium denim sector, Soneji believes that its price-to-value positioning is well-placed for where the market is right now. He explained that the organisation's product offering is very accessible, while still being extremely current in terms of fashion.
Pepe Jeans has found markets in Germany, France, Russia and India to have been the strongest performers this year, whereas those based on a complex market heavily reliant on the banking system have been a little more difficult - for example, the Baltics, Iberia and even the UK. However, Soneji stated that its history and presence in Britain still allowed it to experience sales growth.
Pepe Jeans changed its tactics in Germany and France and took greater control of the market, rather than focusing on working through distributors.
Advice from Soneji was to "have a wider, deeper, greater presence determined by yourselves so that you can have a very meaningful dialogue with the marketplace. And then of course investment in your core belief, which is to deliver beyond the price. "Product is key. As long as you pay a huge amount of attention to the product and how in tune it is with the marketplace you will have a good platform for more success," he continued.
So what does Pepe Jeans believe is the future for the premium denim wear industry?
The cycle for next year is already well underway in terms of the sector moving towards a recovery, he explained. The recession had caused buying to tighten as stock levels became high during 2008-09, but as companies have cleared that stock and investments have been liquidated, buying activity should soon be coming under review.
Soneji said retailers would need to start reassessing their assortments and getting back into the marketplace with fresh stock and fresh ideas. "The lifeblood of the fashion business is to have new things in the stores and new stories to tell and a very positive presentation of products for the consumers."
He explained that premium denim brands would have to work hard to distinguish themselves from non-specialist companies who also create jeanswear. "It's looking at innovation and doing different things with a very, very honest fabric."
Nish Soneji began his professional career in corporate finance and joined the Pepe Jeans family in 1989 to help build the group. He has held his current position as managing director for Pepe Jeans for eight years and for Twenty8Twelve - the brand it created with Sienna and Savannah Miller - since its launch three years ago.
Constituting Pepe Jeans, Hackett London and Twenty8Twelve, the group has in excess of 500 mono-brand stores in 42 markets and it employs some 2,800 people directly. The group turns over in excess of €360 million (£322 million) per year and has plans to open new stores worldwide across all three brands next year. Pepe Jeans and Twenty8Twelve also have plans to launch an e-commerce platform early in 2010.
