Ads
Translated by
Nicola Mira
Published
Nov 11, 2020
Reading time
8 minutes
Download
Download the article
Print
Text size

Ba&sh CEO confident label will steer successful course through crisis

Translated by
Nicola Mira
Published
Nov 11, 2020

Ba&sh is one of the stand-out French labels in the affordable luxury segment. The women's ready-to-wear label was founded in 2003 by Barbara Boccara and Sharon Krief, and the Vog group is now one of its shareholders. Last year, Ba&sh generated a revenue of nearly €210 million, and its footprint extends outside France too. Pierre-Arnaud Grenade, the label's CEO since 2015, has discussed with FashionNetwork.com the situation in the wake of the second lockdown in France, analysing the impact of the crisis caused by the Covid-19 pandemic and the opportunities arising from it.


Pierre-Arnaud Grenade - Ba&Sh


FashionNetwork.com: What is your assessment of the impact of the health measures introduced to fight the pandemic?

Pierre-Arnaud Grenade: Curfew measures have not had a major impact on our business. But with a second lockdown and its related store closures, I won’t risk making a prediction about the impact on our annual financial forecasts. One thing is sure: we are ready. We have already lived through a situation like this and we are redeploying the solutions we adopted during the first lockdown, with thematic task forces working on the supply chain, on staff safety, data security and other issues. The idea is to be flexible during this period.

FNW: In practical terms, what is the status of Ba&sh stores now that a new lockdown has been declared in France? Which measures have you taken to keep the business going? 

P-AG: We have closed all our French stores, and a good number of our other European stores, in accordance to the directives of the various national governments. We have very quickly shipped back our best-selling items from the stores to our warehouse, to be able to sell them online, while waiting to carry out a full inventory harmonisation, planned for the start of December. We also enhanced our stores’ clienteling tools and strategies. For example, our retail staff are offering virtual personal shopping sessions by appointment to their clients, using a dedicated app.
 
FNW: Ten months into the current year, how are you looking at the final result for 2020?

P-AG: Before having to close everything again, we predicted the shortfall in annual revenue could be contained between 10% and 15%. The picture varies greatly country by country. In France, at the end of October, we were not very far from the 2019 results. But the situation in some other countries is very complicated, in the UK and the USA for example, where the retail sector is struggling. It's something that is intimately linked with how governments have been dealing with the crisis locally.

FNW: You had plans for further openings, but the global context has surely affected some of your projects. What is the situation?

P-AG: We operate some 260 stores worldwide, and we have made assessments region by region. For example, we closed our stores in Macao, China, and an outlet store and a city store in Houston, Texas. But we have also opened new shops in Montreal, Canada, and in Lisbon, Portugal. And we are continuing to open new stores in China. We have of course renegotiated leases in all countries, and we have reduced our personnel costs.


A Ba&sh store in the USA - Ba&sh


What’s interesting is how the geography of retail has changed. For example, our New York customers have fled to the Hamptons, while the Manhattan shops, which rely on expats and tourists, are struggling. More generally, in London, New York and Paris, neighbourhood stores are doing better these days than those located in tourist areas, and than retail corners in department stores. Outside major cities, our directly owned and franchised stores are performing satisfactorily, and our wholesale business is holding out very well.

Ba&sh launching loungewear line



FNW:  It wasn’t all doom and gloom then for multibrand retailers, before the new lockdown.

P-AG: Not really, and e-tailers have been purchasing steadily [from us]. Even purchasing levels in US department stores have been close to last year’s order volumes. Department stores picked the labels to focus on, and streamlined the range. It’s what we too are doing, rationalising our range to make way to new families of products. For example, this month we are launching a loungewear capsule collection, and we are cutting down on categories like dresses and all those items Americans call social clothing, with good reason.


In response to new consumer needs, Ba&sh is launching a loungewear line - Ba&sh


FNW: What did you learn in these first few months of the crisis?

P-AG: The crisis has hit the whole world in a relatively short time span. In 2020, the outlook for the global fashion market is that it will decline by approximately 30%. It's clear that the fashion market will shrink. For consumers, fashion isn’t a basic necessity. But we think that there will also be a strong increase in the propensity to consumer better and perhaps less frequently.

The affordable luxury segment was born out of the dismantling of ingrained attitudes on how to dress, which made it possible to invest more on quality clothes. This phenomenon has intensified with the Covid-19 crisis. There are people who will step up from a cheaper grade of products to higher quality, longer-lasting ones. Conversely, there are luxury consumers who will be wondering about how much they are spending on certain products, and will be shifting from luxury to affordable luxury.

The winner takes all



FNW: Which assets will labels have to tap in order to emerge from this period stronger than they were?

P-AG: One thing is sure, it's a case of the winner takes all. The battle is being waged globally nowadays. Players that are present on the three main continents have the advantage. China is indeed a high-growth area. Ever since the region emerged from the crisis, in April, we have been experiencing double-digit comparable sales growth every month, and we have doubled our online sales this year.

There are three growth vectors. First of all, China as a country, when previously it was more a case of Chinese consumers and their worldwide footprint. Then, there are the Z and Y generations. Even though they will consume differently, they’ll consume more, and more fashion. Numerically speaking, these generations will dominate global consumption. The third vector is the boom of digital and omni-channel sales. The halo effect, as customers shift from physical to online retail and the other way round, is very interesting.


Ba&sh has carved out a space for itself in the affordable luxury segment thanks to its versatile, comfy garments - Ba&sh



FNW: Did you revise your plans compared to your pre-Covid forecasts?

P-AG: Our shareholders are very robust, and have been very supportive at the start of the crisis. In the current situation, we are not going to build castles in the air. We are certainly going to continue to invest, but in a different way. We’ll capitalise on our digital retail expertise. In a year, the online channel will account for 30% of our revenue. Obviously, we’re investing less in brick-and-mortar retail, even though we are going to open between 10 and 15 new stores in China next year.

We believe that Ba&sh will steer a successful course through the crisis. Not because we’re arrogant, but because, before the crisis, we deployed new strategies in areas which have now become essential. For example, we have had a presence in China since 2017, and in 2019 the country already accounted for 10% of our revenue. We have complete control of our operations there, so we are perfectly aligned with market expectations, enabling us to currently record treble-digit growth rates.

FNW: You are very dynamic on the digital front. You also announced you have plans for the second-hand and clothes rental markets. Are you still active on these projects in the current situation?

P-AG: We think that a label’s role is to innovate and try new solutions. We are launching a second-hand clothes option, and also a garment rental service, operated in white label mode by [clothes rental service] Les Cachotières.

When we turned our attention to the second-hand market, we realised that [Ba&sh] was sold at lower discount rates than its competitors. Consumers seemed to rate the resale value of Ba&sh products higher than those of other brands, with a gap ranging between 10 and 20 points.
This means that our clothes last longer, in terms of quality and style. This was Sharon and Barbara’s goal all along, for Ba&sh to be contemporary but not edgy. What’s interesting is that we have customers we are not aware of.

FNW: How did you break into this market?

P-AG: We wanted to make things easy and to provide a service to our customers. In mid-November, there will be a smart button on our site, a solution we developed with Reflaunt. By tapping the button, customers will be able to offer for sale a product they bought at Ba&sh. Product pictures and descriptions will be available, and the item will then be put up for sale on several second-hand sites worldwide. We will have the opportunity to get in touch with the buyer via the product’s unique digital ID provided by a blockchain solution, which guarantees the product's authenticity. This will also enable us to turn the seller into a loyal customer, by giving them the option of either being paid directly for the sale, or to spend the same amount at Ba&sh, obtaining an additional credit voucher as well. We’re in test-and-learn mode at the moment, but this market is worth between €25 billion and €30 billion [worldwide], growing at rates of 15%-20% per year. And it's an opportunity for targeting Gen Z and Gen Y consumers.   
 
FNW: Another service for which Ba&sh is blazing the trail is garment rental. What were the launch results?

P-AG: We launched a [garment rental] service on the eve of the first lockdown in France. And we re-introduced it in September. It's a start. In September, we had 28,000 visits on the dedicated tab, a good result. We’ve started renting clothes despite the drop in festive occasions and professional events. We’re very happy in terms of traffic generation.

FNW: With all this activity, is Ba&sh set to become a target for other groups or investment funds?

P-AG: A sale isn’t on the horizon. But, is Ba&sh an attractive label? Yes. Is the market heading towards consolidation? It's highly probable. I think that medium-sized companies have the advantage, companies that have the means to realise their plans but aren’t hampered by organisations, systems and operations that aren't flexible. However, I believe that investors in general will be biding their time, especially in the fashion sector.
 

Copyright © 2024 FashionNetwork.com All rights reserved.