Danish Fashion Going Global - Spandet And Partners

DANISH FASHION GOING GLOBAL 31
Since the end of 2008 the financial crisis has wiped out some 20% of Danish fashion
labels and has left the industry fragmented and especially the smaller labels in a
weak and fragile position.
During the first 12 months of the financial crisis, some of the smaller labels were
forced to close down due to weak business models (and only having one business
model to build the business upon); others were forced into closure/bankruptcy/hostile
and nonhostile takeover due to withdrawal of credit support by the banks. The banks
have been operating very defensively since the financial crisis, and the fashion
industry has certainly not been “in fashion” with the banks. In 2009, for the first time,
the Copenhagen Fashion Week showed a decreasing numbers of exhibitors, shows,
and visitors as a consequence of the consolidation and lack of new entries.
Most Danish fashion labels are therefore hardly visible on export markets. Holding on
to the international position for the small- to medium-sized companies becomes more
crucial and more difficult than ever. The new realities after the financial crisis mean
that new designers’ chances of creating an international brand have decreased from
1:100 to less than 1:1000 unless the talent is identified by intelligent capital and
supported by leadership.
Consolidation into more and bigger units is needed to achieve economy of scale,
secure committed leadership, and deliver better solutions to the customers, to
improve all back-end functions and to enable the best designers behind their labels
to focus on their core competencies.
This leaves an open question: which independent fashion brands of tomorrow should
take over from the brands most of which were introduced in the 1990s and up to the
financial crisis? And next to design talent and consolidation, which innovative
strategies should bring them forward to exploit the talent? Usually a brand risks dying
with their aging customers. In this case the young customers risk seeing their Danish
fashion designers die before they age. Initially, you cannot see this challenge in the
export statistics. When you can, it is often too late to do anything about it.
11. Danish Fashion Polarized in Design Strategy
The mix of business flair and nurturing of design talent has resulted in a polarization
of innovation-driven labels (defining tomorrow’s trends) and the trend-driven labels
(building their business upon established trends and well-known international
designers and brands).
The trend-driven companies by far make the best results in growth and revenues,
also in exports.