The German fashion industry is suffering especially in this Corona year – but many problems are not only related to the pandemic, they are also homemade. “The market had been having difficulties for a long time,” said Marc Freyberg, managing director of the Brax fashion brand, in the “Zero Hour” podcast. Corona only exposed or accelerated the weaknesses.
“One thing is clear: this market suffers from overcapacity until the heather wobbles,” said Freyberg. There is “overload” in the market, and there are always new partners and players, online and stationary. “There are endless brands. And Germany in particular is like a hotspot there. In retail and the fashion industry it is often said: If you survive in Germany, you can make it anywhere in the world. Or at least in Europe. “
Behind Brax is Leineweber GmbH & Co KG, a traditional company from Herford in East Westphalia, founded in 1888, with 1,100 employees. Brax made 320 million euros in annual sales in 2019, a record year. “We couldn’t get into crisis,” said Freyberg. “We were used to success.” For the current year Brax expects a decrease to 250 million euros. Among other things, a strong online business, with which around 14 percent of total sales are achieved, is cushioning the decline in retail. “Our company will survive,” said Freyberg.
The turnover in clothing has plummeted this year, according to data from the textile trade association BTE by an average of 30 percent in the first half of the year. According to the Federal Statistical Office, retail sales of textiles, clothing, shoes and leather goods at the end of September were almost 24 percent below the previous year. But the slumps are often worse, says Freyberg: “The frequency drops are significantly higher than 30 percent for our customers.”
Cautious optimism for 2021
The renewed lockdown was a second blow to the industry. “October was a really good month. That was all right again, the industry had worked up a bit, the sales of the previous year were beginning to be reached again, ”reported the Brax managing director.
Marc Freyberg, who has been with Brax for three decades, sees the family company as well equipped. The liquidity is assured, with “a lot of foresight” one had already produced significantly less in the course of the year. The existing goods in the warehouse will be sold in 2021.
For the time after Christmas, Freyberg expects overcapacities again. “If the lockdown continues miserably and the frequencies stay that way, by the end of the season, at the end of February, in mid-March, we will have stocks that are significantly higher than what a normal operational area can cope with.” For 2021 overall, however, he sees “The glass is more or less half full”.
Hear in the new episode of “The Zero Hour”,
- why Brax had to lay off employees in this crisis,
- what Marc Freyberg thinks about the multi-million dollar order from the state of North Rhine-Westphalia for the shirt manufacturer Van Laack,
- why the market adjustment could also have something good.
You can find all episodes directly at Audio Now, Apple or Spotify or via Google.