Danish Fashion Going Global - Spandet And Partners

DANISH FASHION GOING GLOBAL 50
17. Brand Platform
The Danish fashion industry needs consolidation and an industrial platform to
compete with the big industrial nations.
Size does matter in the new worldwide economy, and the new global economy will
speed up the consolidation further in Danish fashion and Denmark in general.
The size of the company has influence on the potential success. There is a
correlation between the size of the companies and the level of success in export and
revenue per employee.
Many small- and medium-sized labels have been able to grow fast to the DKK +/-
10–15 Mio. DKK revenues. They have mainly been able to do so through wholesale
market penetration in Denmark and some near markets because of the following:
• Concept competencies
• Design competencies
• Entrepreneurship
• Immature market structures
The financial crisis and the new economy are challenging the business models of
these companies whereas the big fashion companies in Denmark on Tier 1 or 2 level
have been able to make use of their scale of operation by reducing costs and
increasing efficiency and profits.
In adjusting the company to the financial crisis economy, the small- and especially
the medium-sized companies were caught in the vice of either inability to reduce
costs (because there were no further costs to reduce, or they took too long to reduce)
or inability to maintain a reasonable level of specialized business operation. Many of
the companies who did survive the financial crisis by stepping down from Tier 3 to
Tier 4 are now asking themselves how on earth they get from Tier 4 to Tier 3 again.
The smallest-scale companies (Tier 4) have been able to manage the crisis better
than the medium-sized companies (Tier 3) since the medium-sized companies are
more vulnerable to change.
The small- to medium-sized companies usually have 5–8 employees and a revenue
of 5–10 Mio. Most of these companies have a very modest equity, and some even
have no equity left.