Former Agenda LLC co-owner Seth Haber is tasked with turning around the bankrupt web retailer.
Escada only began selling online in March 2013. It now has e-commerce sites in the U.S. and 11 European countries, with more to come in the next year.
Escada was a latecomer to e-commerce, but it’s working hard to make up for lost time.
The high-end womenswear fashion brand launched its first e-commerce site in March 2013, serving consumers in its home country of Germany and neighboring Austria. Since then, it’s launched e-commerce sites in nine more European nations and, in March 2014, in the United States where consumers can shop at us.Escada.com. By the end of this year, it will be selling in some 20 European markets, says Tonio Fruehauf, managing director of Escada Online GmbH, the digital arm of the Munich-based company.
And more expansion is in the works. The company plans to launch in Russia in early 2015, to be followed by China and other Asian markets, Fruehauf says.
Meanwhile, Escada last week launched a new version of its global site, Escada.com, for consumers in countries where it does not yet let consumers buy online. The site displays the company’s dresses, jackets, blouses, handbags and other items; but instead of a Buy button a consumer sees on the product page a store locator that tells her where she can find the item. Escada operates its own boutiques in 80 countries and also sells through such upscale department stores as Saks, Nordstrom and Neiman Marcus.
Another new feature on all the Escada web sites is an online magazine, introduced last month, that highlights the celebrities that wear its fashion, as well as store openings and other company news.
The move into e-commerce is part of the rebirth of Escada, which filed for bankruptcy in 2009, then was purchased by the Mittal family of India, owners of ArcelorMittal, the giant steel and mining company that booked $79.4 billion in sales in 2013.
Since then, the brand has introduced a fresher, more youthful look, with more items at lower prices. “E-commerce drives our message to the market,” Fruehauf says. “It’s the best way to transport in a quick way the fashion statement and everything about the brand.”
In order to move quickly into many markets around the world, Escada engaged Hermes NexTec, a provider of logistics and e-commerce services that is a subsidiary of Otto Group, the big German retailer that owns some 60 brands and is No. 2 in the Internet Retailer 2014 Europe 500. Hermes operates the e-commerce sites for Escada, and handles fulfillment, customer service and online marketing.
The reach of Hermes follows that of Otto Group, giving it a broad presence, especially in Europe, says Uwe Bald, vice president of international business development. While Hermes has a physical presence in 24 countries. Hermes Nextec, which was founded in 2011, has offices on four continents, including in Germany, the United States, Brazil, Russia and China.
Besides Escada, Hermes NexTec operates e-commerce sites for nine brands, including Wolford AG of Austria which markets hosiery and lingerie; and three Otto Group units: swimwear and lingerie brand Lascana; German apparel brand Arqueonautas; and Bombay Company, a furniture and home furnishings brand with roots in the United States. The other clients, which Bald declined to name, include a global sports apparel brand, three denim makers (two based in the U.S. and one in Europe) and a jewelry brand. There is no connection between Hermes NexTec and the handbag brand Hermes.
Among the countries where Hermes operates is Russia, where it has its own delivery service and collects payments from online shoppers who wish to pay in cash. The company also maintains dressing rooms in some pickup points around the country so that consumers can try on items they buy online and return them immediately if they do not fit, Bald says.
Hermes’ experience in Russia was important for Escada, Fruehauf says. “We have a large customer base in Russia, and we spend a lot of money and effort to make it exciting to shop with Escada online,” he says. “One of the reasons for selecting Hermes is that, to my point of view, they’re the only ones who can deliver that.” He also says Hermes can deliver beyond such major cities as Moscow and St. Petersburg to all of Russia.
Fruehauf, who will speak about Escada’s e-commerce rollout this week at the Internet Retailer Conference & Exhibition in Chicago, says Hermes also provides the technology to link its physical stores and web sites. For example, it has created an Escada site optimized for tablets so that employees in Escada stores can place online orders for customers when a store is out of an item a shopper wants. Further tying together Escada web sites and its stores, shoppers also can arrange to go into stores to arrange alteration of garments purchased online.
Each Escada e-commerce site offers a selection tailored to that market. Fruehauf says the web sites typically offer about 30% of the company’s total catalog, more than a shopper is likely to find in a single bricks-and-mortar store. The sites are available only in German and English today, he says, adding that most Escada shoppers are comfortable in English. He says the Russian and Chinese sites will be in local languages when they launch.
A privately held company, Escada does not report its total revenue or online sales. But Fruehauf says traffic to the e-commerce sites tripled in the first year compared to the company’s previous sites that did not offer shopping.
Hermes takes a percentage of the revenue from Escada sites, and neither Bald nor Fruehauf would disclose the percentage. “Growth is tremendous and we’re happy with that,” Fruehauf says. “Looking at the rollout, it was only possible with a partner that had a lot of infrastructure in place that we could do it so quickly.”