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“The Multibrand Store is our Reason for Being”

17 April, 2015

Yerse spring-summer 2015 collection / Yerse

In the 1960s, Yerse invested 100% of its energies into third-party production. Today, the entirety of its work is focused on growing its own label. How and why did they make this transition?

In the late 1980s, Yerse was dedicated to the production of knitted sweaters for white labels. Back then, the “Fábrica deGéneros de Punto”, the original name of this company which was founded in 1964, worked almost exclusively for the major department stores of the day, such as El Corte Inglés, as well as Cortefiel and Inditext. In the 1990s the firm decided to change course and changed its strategy to producing its own clothing

“We went from making white label clothes to having a total look of our own. We diversified the product and outsourced production,” explains Yerse CEO Josep Generó, who took over from his father and company founder Lluís Generó Domènech at the start of the year 2000 and went on to oversee the restructuring from third-party production to the creation of a brand concept that covers entire women’s clothing and accessory collections.

“We were pioneers in our sector. When everybody else was thinking about vertical integration, we chose to outsource the production process. Nobody talked about ‘outsourcing’ back then, no-one gave their machinery over to third parties to produce for them. But that is what we started doing at Yerse back in the 1980s,” Generó stresses. In the 1990s, the firm began placing orders with suppliers in other countries and at the same time opened up new markets for the sale of its own collections. The leading
Yerse suppliers today are located in India, China and Turkey, where 65% of the
production is done. The rest is made in Portugal and Spain.

“Initially we were guided by the culture of volume, by which I mean selling more, and we had a great capacity for producing for other companies. Now, 100% of our energy goes into our own label and multibrand customers,” says the man at the head of a company with nearly half a century’s history to its name.

In the long term

Yerse has ridden out the toughest years of the financial crisis in Spain in “good health”. The key, according to the CEO, has been a growth model predicated mainly on exports and inhouse funding. “We haven’t had any ups and downs. We began exporting many years ago and 60% of production is now targeted at international markets. It was lucky we decided to export when we did and lucky we make the collections we do.” He says this with assurance, after seeing with satisfaction that, over the past seven years of economic decline, traditional multibrand stores continue to trust in his company. “Here we are considered a safe bet. Multibrand stores bought more from us because they saw that our products, for their quality and price, were still selling well,” he explains from the company’s head office in Sabadell.

The multibrand potential

The multibrand store is a central tenant in the Yerse CEO’s discourse. The company draws on its sales structure to move onto an international market whenever the country allows, which is why, when Generó speaks about it he doesn’t hesitate to call the multibrand store “our reason for being.” The firm works to “bring added value to and coexist with these establishments’ brand values”.

He says that Yerse “did its homework” in recent years, committing to a growth model predicated on long-term decisions and strategies. It has survived various crises, not just the most recent one, but others specific to the textile industry, allowing it to have a team of 49 people today and a growth plan that makes it possible to increase the number of its multibrand retail outlets, own stores and franchises.

When we ask about the priority in Yerse’s expansion plan, Generó doesn’t specify any one thing. He says that although the firm has the potential to grow considerably over the next few years, “we are conservative and we think carefully about every step we take”. However, it is clear that Yerse will grow, and grow strongly. The CEO says: “It’s hard to say what the priority is regarding the growth model. What I can say is that when we visit a new country we always seek out the multibrand stores. We want to show them our product and be present in their establishments. However, it is very important to have flagship stores to raise our profile. A franchise allows us to find solutions in countries such as in the Middle East where the multibrand concept is not as well developed”. The flagship stores are presently located in Sabadell, Barcelona and Madrid.

Looking to the US

Altogether, the firm has 500 retail outlets in Spain and over 1,000 around the world. It produces four collections a year with over 300 references. Europe makes up the largest sales volume outside of Spain, with 800 sales points, but the US is a priority market in the company’s expansion strategy. Generó flew to America in February to visit current customers and continue to develop the sales strategy. “Like other Catalan companies, we tried to get into the US before and it didn’t work. Now we are throwing ourselves fully into expanding there”.

Yerse has 200 retail outlets in America. It recently opened in Los Angeles, Chicago and Atlanta and featured at the Magic trade fair in Las Vegas and at D&N in New York. “With these new openings we have covered the most important commercial areas in the country,” he says. “Now the goal is to get into the leading fashion distribution chains.” For now they have agreements with Free People, the owner of Urban Outfitters, and Anthropologie, among others. The majority are small or medium-sized multibrand customers, providing the company with a showcase for attracting the big names in the North American fashion distribution sector.

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