One of Europe’s leading fashion and lifestyle companies, the Tom Tailor Group continues to overcome the volatile retail environment in its journey to become a modern, provocative and unmistakable fashion brand. Established in 1962 in Hamburg, Tom Tailor is now among the top 10 German fashion retailers, with online stores as well as more than 1,400 retail shops across more than 30 countries. Together with 6,100 employees, the Group concentrates on core sales markets across Germany, Austria, Switzerland, Southeast Europe and Russia. Its mid-priced casual clothing offering is complemented by an extensive range of accessories and home textiles, catering from babies all the way to those aged 55 and older.
Now head of the company, Heiko Schäfer joined the Tom Tailor Group in December 2015, initially as COO, before assuming duties as interim CEO in September 2016 and permanent CEO in March 2017. Heiko started his career at the Boston Consulting Group in the consumer goods and retail sectors, before spending six years as a senior operations executive with the Adidas Group, responsible for product development, sourcing and logistics for its four lifestyle fashion labels. From there, he moved to private equity firm Kohlberg Kravis Roberts (KKR) in London before starting his career with Tom Tailor.
For a greater positive change
“Adidas is a beautiful company, but it’s also a big corporation that’s relatively slow. When I was approached by Tom Tailor for the COO position, I jumped at the opportunity to join a small and agile brand. It was evident that the brand had an excellent heritage and a strong reputation in Germany. There was a lot of work to be done but I knew it had the potential for growth.
“With a staff of about 400 people at headquarters, most decisions were driven by just 15 to 20 people and the wider organisation was very swift in responding to our new direction. When I took the reins as CEO, I was able to influence even greater positive change.”
In 2015, Heiko launched the ‘RESET’ redevelopment program to optimise costs and processes within the company. Since then, he has been working hard to set the stage for Tom Tailor’s market comeback, which is now becoming increasingly evident. Profitability is on the rise and the brand’s customer base continues to expand. “We’re in an industry that is under tremendous competitive pressure. Nevertheless, we’ve managed to pull off a successful transformation and we’re coming out of it much stronger. We’re among the winners now,” he remarks.
Kicking off new initiatives
Heiko has also kicked off a number of big IT transformation initiatives, including a new eShop, an ERP implementation of SAP and a new Product Development system. “We’re going through a lot of things in parallel, so I need to be mindful of the fact that we can’t fire on all cylinders all the time. There’s a fine line between implementing change and losing the essence of the company in the process.”
“There’s a fine line between implementing change and losing the essence of the company in the process.”
Heiko points out that although the fashion brand is positioned in a market that’s not lending itself to a lot of organic growth, Tom Taylor has still managed to expand its core market share in Germany. “We now have an awareness rate of 83–90 per cent. People didn’t used to think of us as a highly attractive brand. So, over the past 18 months we’ve made big investments to strengthen the desirability of Tom Tailor and it’s starting to pay off.”
More modern, more provocative and more unmistakable – these are to be the future hallmarks of the new brand, explains Heiko. In line with the launch of its new marketing campaign, ‘Are you Ready…?’, in July last year, Tom Tailor announced a three-part capsule collaboration with British-born supermodel Naomi Campbell. Heiko says the model’s international profile and passion for the brand has helped signal the cosmopolitan outlook and confidence the company has in its DNA.
On the back of this successful international collaboration, in January this year the brand presented its latest collection ‘Tom Tailor Denim x Revolverheld’, supported by a private concert at Berlin Fashion Week. Heiko says Revolverheld represented a perfect alliance, with two of the band members born in the Hamburg district of Niendorf, the location of the firm’s headquarters. The first of three capsule collections will be available in stores this August, reflecting the handwriting of the artists and featuring jeans, comfortable outerwear and basic T-shirts. In future, design collaborations with well-known fashion, music and media will continue to play an even stronger role.
Achieving the brand’s operational excellence
Over the next 12–18 months, Heiko says the brand’s operational excellence will centre around three areas. “The first is planning, range management and merchandising. Nobody really likes to get into this area because it’s very nitty-gritty, but for me it has a lot of potential because it’s never really been attacked in a systematic way,” he explains. “The second is to do with our retail supply chain. Historically, we come from a wholesale side. Now, however, we’ve grown to a point where half of our business is through our own retail network. Adjusting our supply chain to suit this new business model is one of my top priorities. And finally, there is maintaining our intelligence in pricing and markdown management.”
Following the success of collaborations with international supermodel Naomi Campbell and Hamburg rock band Revolverheld, Tom Tailor will continue to blend the worlds of fashion, music and media to boost its image and drive growth across Europe.
Long-term, Heiko is preparing Tom Tailor for healthy growth in the areas he knows can make money. “For example, our Russian subsidiary is one area we know we can grow profitably, thanks to our established network of stores and penetration potential in the market. Similarly, we know that some of our established markets in Western Europe have growth potential in the young adult and women’s fashion departments. What is universally true is that there’s potential to grow in the digital space.”
