The first FABTalks took place in the newly opened C/O Berlin gallery in the Amerika Haus. Stephan Erfurt, CEO of C/O Berlin, Frank Wiethoff, Regional Board Member for the East at KPMG, and Andrea Bury, CEO of ABURY, briefly welcomed the guests before heading straight into the exhibition. A personal guided tour provided intensive and emotional insights into the life and work of photographer Will McBride as well as the Magnum exhibition.
Afterward, the approximately 30 guests were treated to a vegetarian buffet in the gallery's café – where the talks subsequently took place. Andrea Kolb introduced the topic using the example of the statement released that same day regarding the closure of Bread+Butter.
TALK 1: CLAUDIA ROGGENKAMP, FORMER PRIVATE LABEL MANAGING DIRECTOR AT ZALANDO AND NOW A FREELANCE CONSULTANT.
She examined the market from the perspective of a young designer and summarized what makes the fashion industry so complex:
1. High risk: The designer is placing a bet on what will be a success. This means production must be pre-financed, and investors often need to be convinced to secure funding.
2. Necessary business knowledge: Collection development and production, pricing, etc. – all of this goes far beyond creative work.
3. Sales and marketing: The large and complex portfolio of options, ranging from offline in your own store, to offline via third parties, and numerous constantly increasing online possibilities, makes choosing the right sales channel difficult.
4. Surplus marketing: Once these steps are completed, a misjudgment of the market can lead to excess inventory, which can destroy a small company without a financially strong partner. Therefore, marketing surplus stock also plays a vital role.
In conclusion, she briefly summarizes the qualities needed to survive in the fashion business:
Thinking entrepreneurially, being brave, learning from mistakes, keeping risks as low as possible, bringing in external expertise for missing skills, and learning how to sell.
TALK 2: SEBASTIAN PAAS, PARTNER AT KPMG IN THE CONSULTING DIVISION FOR 17 YEARS, ADVISES RETAIL AND CONSUMER GOODS COMPANIES, INCLUDING SEVERAL LARGE FASHION BRANDS AND FASHION HOUSES, AND IS ALSO ACTIVE IN THE FIELD OF INNOVATION MANAGEMENT.
He first shares two of the most important insights from a major KPMG study of the fashion market in Berlin:
1. With over 3,700 fashion companies generating a total turnover of well over 2 billion euros, Berlin actually has the perfect conditions to become Germany's fashion capital. However, the market is highly fragmented and diversified. He identifies a lack of clustering and a lack of a platform for exchange between retailers, designers, manufacturers, etc., as one reason for this.
2. Low level of digitalization: There is a lack of digitalization among many retailers and a low level of maturity among designers and in the trade fair scene, which offers comparatively few additive services. He sees classic online retailers like Zalando and some Berlin start-ups as positive examples of a high level of digitalization. Paas describes the imbalance of this digital penetration as significant for the Berlin fashion market and as one of the biggest obstacles to the market being properly integrated, despite its large volume. He predicts an ever-increasing need for digitalization in the future.
Secondly, he considers love and hate in the interplay between fashion and business. He describes the ever-increasing cost pressure as the HATE dimension, and in contrast, innovation as the LOVE dimension. However, he also sees a problem here, because in his opinion, innovation requires money, time, and freedom, and this is difficult under cost pressure. As a solution, he describes mergers and the sharing of knowledge. Most successful innovations nowadays rarely arise individually, but rather through the combination of many individual ideas. Therefore, he sees a strong need for platforms that bring these many small ideas together, and he hopes that the FAB Talks will develop into one such platform.
Discussion:
At the beginning, the question arose as to what Sebastian Paas means by digitalization:
1. Excellence in internal processes, such as technical support for sales and procurement
2. Provision of additive services such as fashion advice, sustainability stamps
3. Continuous innovation and change.
The discussion then turned to the question of the training of young designers – are they actually being prepared correctly? The question posed to a teacher at a fashion school made it clear that business skills play only a very small role in the training of designers. The actual goal of the training is to teach young people how to make clothes. To meet the ideal expectations, the training would have to be extended by about two years. The discussion concludes that young designers who want to start their own business must become entrepreneurs themselves or look for a business partner.
The question arises whether the difficulty for young designers is perhaps a German problem, as in the UK, for example, designers are supported by the government specifically in these entrepreneurial areas.
Exchange and benchmarking could help, both within the fashion industry and with other industries. However, many designers do not like to show their cards and prefer to stay to themselves.
Elke from Dawanda shows a positive example of how such togetherness can work. After all, this sense of togetherness is one of Dawanda's success factors. As a marketplace for young designers, they are given the opportunity to build a brand with minimal costs. This works so well that some designers achieve million-euro sales with Dawanda without having their own website, or even grow out of Dawanda because they have achieved such great notoriety through it.
After several exciting and stimulating hours, the discussion groups only broke up when the café closed! We look forward to many more FAB Talks with controversial and intense conversations.
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