10/03/2006

Innovative marketing and optimized production have enabled the women’s ready-to-wear brand to grow by 35% a year since 2000. A strategy that it wants to apply internationally.

 

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It was in Castelginest, a small village in the Haute Garonne, that Tony Elicha founded the Comptoir des Cotonniers in 1995. Since then, the mid- to high-end women’s ready-to-wear brand has been a big hit. Margins among the best on the market, quite remarkable sales per store (800,000 euros on average), regular growth of around 35% per year for the last five years, a first place among women’s brands in department stores, particularly at Printemps and Galeries Lafayettes which generate sales of 3.3 and nearly 3 million euros respectively for 75 m²… In short, the Comptoir des Cotonniers adventure is a real success story.

Retail sales including tax in thousands of euros

(2006 estimates – Source: Comptoir des Cotonniers)

Comptoir Des Cotonniers: the Brand on the Rise


A marketing concept based on a strong bond with customers

The brand’s real takeoff came two years after its launch, in 1997, when it had only two stores: one in Toulouse, the other in Paris. It is the observation of mothers and daughters shopping together that triggers the trigger.

From that point on, the sign will base all its communication on the mother-daughter relationship. Exit, the icy models, make way for real people, fusional pairs of mothers and daughters, to represent the brand. At the time, all the advertising agencies played Cassandra, on the theme which girl would like to look like her mother? The sign replies that there is no question of cloning mothers and daughters and that if it creates for the latter, the objective is that each one can find her happiness in its shops.

Le Comptoir des Cotonniers therefore decided to develop its marketing internally and declined its concept: a record of songs performed by mother-daughter couples, a short story literary competition, sponsorship of a play, a mother-daughter doubles tennis tournament… For Frédéric Biousse, the brand’s CEO, this is what made the brand explode. This authentic notion is recognized, especially at a time when all other brands are moving towards anonymization. If our mother-daughter castings attract 10,000 applications per season, it’s because we stand for something real. It’s not even about marketing anymore. The best proof is that in countries where we are very little known, many women still register.

A targeted distribution strategy

The choice of small on-street, downtown boutiques, designed for an upscale clientele that does not frequent shopping centres and shops on foot, further strengthens the bond between the brand and its customers. More humane than megastores, they also offer excellent profitability per square metre.

Evolution of the number of outlets

(Source: Comptoir des Cotonniers)

Comptoir Des Cotonniers: the Brand on the Rise


Perfectly controlled production costs

In addition to a very strong customer relationship, another major reason for the company’s success is that all its production processes are also very well thought out. First, an in-house production team develops the product until its finalization. A data sheet is then produced, detailing very precisely the quantity of material required and the time needed to manufacture the material. The Comptoir des Cotonniers makes its own fabric purchases and recovers the 20% margin that the middleman usually subtracts. But he can also send the exact amount of fabric his mills need. Finally, a quality controller is present on site to ensure that everything is done without mess. The industrial cost price of the products is therefore strictly controlled.

Comptoir Des Cotonniers: the Brand on the Rise
We are entry-level for women with money and high-end for those with little.

Frédéric Biousse

As a result of its excellent profitability, the brand’s comfortable margins place it among the very good performers in the sector. Without giving any figures, Frédéric Biousse modestly confesses to some fine performances. And adds: H&M and Zara have magnificent operating margins. The first one thanks to huge volumes, the second one by a positioning either very basic or at the forefront of fashion, with clothes made to flow very fast. In terms of positioning, the Comptoir des Cotonniers is exactly between the very simple and the very fashionable: It’s not for nothing that we don’t have really basic t-shirts in the shop, we can’t offer them at reasonable prices. We are better at material combinations and know how to find that extra something that gives soul to a simple garment. This positioning, more upscale than H&M and Zara, places us at the entry level for women with money and at the top end of the market for those with little.

An accelerated production process to keep up with the latest trends

The Comptoir des Cotonniers’ family organization has, since its inception, been a guarantee of efficiency. But as Frédéric Biousse notes, like all growing family businesses, there is a risk of not being able to take the next step, particularly in terms of internationalisation. In response to this challenge, the company has been engaged in a process of internal reorganization over the past four years, aimed at adapting its mode of operation to the ambitions it has set for itself. Firstly, by making IT and logistics investments, which enable the 240 European stores to be delivered on D+1 every day and restocked automatically. But also by improving the clothing design process. Faster than before, it allows you to create very late in the year.

Comptoir Des Cotonniers: the Brand on the Rise
What we know how to do is women’s clothing. As for the rest, we’re going very slowly.

Frédéric Biousse

This is the key to our current success,” says Frédéric Biousse. It’s early May and we haven’t started the fall-winter collection. Indeed, we do not validate a single product until we have seen the designers’ fashion shows, to make sure we are in the trend. Once the designers’ fashion shows are over, in March for the fall-winter collection, the brand creates its clothes quickly and organises its own fashion shows in June – and not in September as before. That gives him another two months to produce his articles. So many more products in the shop at the start of the season, Frédéric Biousse is delighted.

An increase in investment funds to support international growth

Still with a view to enabling the brand to reach critical mass, the Elicha family has been gradually withdrawing from the company for two years now. On the one hand by recruiting senior executives, including the current CEO, hired to build an organization that runs without the founders. But also by gradually reselling their capital to pension funds. Recently, the Japanese group Fast Retailing – the world’s sixth largest textile group with $4 billion in sales – took over 31% of Comptoir des Cotonniers and 51% of the voting rights. And for Frédéric Biousse, it would be in the logic of things that he would be going up to 100% soon.

Le Comptoir des Cotonniers in figures

(Source: Comptoir des Cotonniers)

Creation: 1995

Sales 2005: 130m

Growth: +35% of sales, i.e. +24% at constant scope

Workforce: 600 people

Shareholders: 31% Fast Retailing investment fund, 31% Alpha investment fund, 38% Elisha family and company executives

The main priority for the brand is its international development. In 2005, the company generated 9% of its sales there and expects this share to reach 18% in 2006. In the long term, Comptoir des Cotonniers is aiming for a world turnover equal to the turnover in France. Although the brand currently has only 20 stores outside France, mainly in Europe, it plans to open 130 more in four years. And is pleased to note that South Korea and Japan are very fond of its products.

Prudent diversification

A second, albeit more timid, area of development is diversification. Two years ago, the brand took a rather strong turn towards more femininity,” confides Frédéric Biousse. In addition, we offer a wider range of articles. The average price of an item is still 105 euros, but the price range is wider. So we reach a wider clientele. But beyond women’s ready-to-wear, the brand is also thinking about other products. A year and a half ago, the brand launched a children’s collection, in very small quantities, which has worked very well. Lingerie should follow this year, before a line of accessories in Japan in two years. Another big project: men’s ready-to-wear, which is requested by many customers. But on the subject, Frédéric Biousse prefers to remain cautious: What we know how to do is women’s clothing. As for the rest, we’re going very slowly.

However, the company will have to face a major challenge: not to become a prisoner of its image. This is the Lacoste or Agnes B syndrome, which after a state of grace, saw their profitability margins collapse. But for the CEO of Comptoir des Cotonniers, the brand’s style is becoming less outdated than that of its competitors. He also notes: Our clients wear their clothes for many years. This is the advantage of being both fashionable and discreet. And in any case, we do not renew our articles from one year to the next either. But at least the mark keeps its codes.

JDN Management

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