Fashion and luxury, a new promising sector in Germany
Germany has never been known as a « country of fashion » like France, Italy or the United-States. Yet, the luxury and fashion industry is slowly taking up the German market as the Germany wants to promote a « culture of excellence »…
Fashion and luxury, a German paradox ?
First economical and industrial power in Europe, Germany is famous worldwide for the quality of its high-end products. Its reputation is firmly established in the automotive industry, chemistry, electronic device or renewable energy and German cars are the dream of many people worldwide. However, when it comes to fashion Germany is a huge paradox. It is the first clothing market in Europe and an efficient textile industry but Germany has never been known as a “fashion” country.
Germany is the country of Birkenstocks (usually worn with socks for more style) and Karl Lagerfeld as well, two opposite concepts you might say. Yet, the figures are here to prove it: the luxury sector represents 55 billions euros in 2016, 15% of it is made by fashion and the growth of the sector rose to 11%. To underline this paradox even more, one city comes to my mind: Berlin. Berlin is so many things, the capital of Germany, the « coolest » city, ten schools of fashion and design, the city of modern and street art…. Berlin has such a creative potential, why is it not fashion as Milan, New York or Paris?
The reasons are cultural. In fact, Germany has been a precursor of fashion with the Bauhaus, an artistic movement remarkable for architecture and design which came from the prestigious Staatliches Bauhaus, an art school created in Weimar in 1919. The school was closed when the nazis seized power in 1933 and with the World War II many activities like the leather or silk industries disappeared. Therefore, it takes time for Germany to rebuild its premium industry after World War II. Moreover, the protestant heritage of the country gives the word « luxury » a negative connotation, Germans rather talk about high-end products. Showing off is not in the German mindset and so is spending too much money on clothing, that is why they like hard discounters like Kik or Primark and if they decided to buy expensive things they choose casual clothing with classic, timeless brands such as Hilfiger, Ralph Lauren, Lacoste or Calvin Klein.
The initiative that made the luxury and fashion a renewed sector
For a long time, the government has overlooked the fashion and luxury sector by rather focusing on what makes the « Made in Germany » so well-known, the automotive and electronic device industry. They focused on making practical and high-quality products that last for decades.
Everything changed in 2011, when the first luxury fair was created, the Meisterkreis. It is the ambassador of fashion, jewelry, automotive, modern art, hotels, design furnitures in Germany. About 62 brands and « maisons » are affiliated to the Meisterkreis with German brands among them as Lange & Söhne or Leica but also key fashion brands like Dior and Chanel. Since 2011, the Meisterkreis promotes the « passion of perfection » and the « requirements of its heads of a company » as Clement Pflanz, founder and director of the Meisterkreis, says. This fair intent to protect the German luxury brands and so ask for an intensification of the lawmaking towards counterfeits and an easer visa delivering process for the Asian tourists who remain the main clients of those brands. Thus, the Meisterkreis aim at supporting and developing German luxury. Luxury is also a purpose of the French and German merging. Since the 50 years of the good relationship between France and Germany, the Meisterkreis and the Comité Colbert (its French equivalent) are in touch and wish to lead common projects.
Thanks to this initiative and a State concern, the luxury sector represented about 147 000 employees in 2017 and the number of luxury shops has risen by 30%. 61% of the consumers buy luxury products and 70% claim to buy more of them.
“This could be Germany’s moment” as Suzy Menkes, an influential journalist in fashion, said.
Despite its success the fashion and luxury industry still faces numerous challenges: the transmission of the know-how to younger generations as the jobs in this sector require high expertise and candidates are sometimes rare. Therefore, the enterprises invest directly in the training of new employees, especially craftsmen, which insure and maintain the quality of this industry.
The luxury and fashion sector, a chance for entrepreneurs and small/medium companies ?
In Germany, giants like LVMH or Kering do not exist, instead there are plenty of small and medium enterprises specialized in one activity. Thus, the sector is accessible for foreign entrepreneurs and enterprises that do not need to be big companies. In what follows, you can find the main tips about setting up your business in fashion and luxury in Germany.
1- To contact German enterprises, prefer contacting buyers. Indeed, this is better than directly contacting the marketing or buying department. For an enterprise to establish itself in Germany, the company needs exclusive commercials for the German market, who speak German.The company can also consider setting up a subsidiary in Germany.
2- To successfully immerse oneself in the German economic fabric some regions are better that others :
- the regions of North Rhine-Westphalia, Hesse, Baden-Württemberg and Bavaria are the four most popular regions for shopping.
- the regions with the highest power purchase are Hamburg, Baden-Württemberg, Bavaria and Hesse
- the regions with the lowest power purchase are Thuringia, Saxony-Anhalt and Mecklenburg-Western Pomerania.
3- For the companies and entrepreneurs interested in fashion, there are some regional and national fairs. It can be interesting to attend some of them in order to immerge oneself in the particularities of the German market.
- Premium Berlin (2 fairs each year)
- Bread&Butter Berlin (2 fairs each year)
- Bright (2 fairs each year)
- The Gallery Düsseldorf
- Supreme Women & Men Munich
For more of these tips, if you need a business plan or a market study to launch your activity in Germany, we have a full expertise in those fields at ESCadrille. As, our team is constantly in touch with our business partner in Germany we are able to provide you with the best business advice and information. See our services here : our services