Case study: how to enter the Spanish fashion sector


Barcelona/Drunen, January 2009

Enter the market pro-actively, offer your products with a strong price-quality relation and be flexible for your clients. Those are the key factors to success according to Fred van der Steen, director of the Dutch company Cartouche Fashion, active in the Spanish fashion market. After participating in the Modint trade mission to Spain, he tells enthusiastically about the recent trends and new opportunities in the Spanish fashion industry in this time of crisis.

With strong and world famous fashion giants such as Zara, Mango, Massimo Dutti, Cortefiel and El Corte Inglés, the Spanish fashion sector can be assessed as very solid. The very successful trade mission to Madrid and Barcelona by sector association Modint and Transfer Consultancy in May 2008 underlined this fact. The Spanish market for fashion in total is estimated at €21-25 billion turnover. Because of the increased purchasing power in Spain in the last 15 years, the amount that is spent on clothes is also increasing and is now almost €500 per person a year (figures 2007).

Several participants of the mission have used the past months for a thorough follow-up of their contacts. A few of them have even sealed their first orders, including Cartouche Fashion. This company designs and delivers a large selection of belts and leather accessories to several fashion groups in, especially, Europe. In comparison with May of 2008 the world has changed and problems in the credit markets have also affected the Spanish economy. For the first time in 14 years the economy decreased in the third quarter with 0,1%. Despite the expectations of an economic crisis, the Spanish fashion sector is not doing so badly. For example: the Christmas purchases in the first two weeks of December have increased with 10% compared with last year. Fred van der Steen of Cartouche gives his opinion regarding the fashion sector, the phenomenon trade missions and the contact with Spanish companies.

¨Golden contacts¨ and valuable market information
During the – earlier mentioned – trade mission Cartouche got in contact with several interesting Spanish retailchains and distributors. The program included big, well-known names such as Cortefiel, Massimo Dutti, Induyco (Tintoretto, Ametié) and El Corte Inglés, hypermarket Hipercor and also, relatively unknown, chains such as Coronel Tapioca and Etxart & Panno. According to Fred van der Steen (pictured left) those names are “golden contacts” in the Spanish market. Although he delivered to Zara for several years he has obtained a better view on the trends in the Spanish fashion sector: “It is remarkable that Spanish retailers differentiate only almost on price level. You either see a lot of competitors in the low segment or in the upper segment, with the middle segment almost untouched. This 'polarization' on just price has intensified for the past few years”. An increasing number of purchasers have made the choice between either products with an expensive design focused on the high-level segment or the extremely cheap (Chinese) products. Especially the last group, focused on the lower segment, has caused a negative price spiral which implies there is no margin left for anybody. Van der Steen especially foresees opportunities in the middle segment which, according to him, has been neglected in Spain for the last few years. The trade mission determined that chains such as Zara, Mango and El Corte Inglés are more often interested in the combination of quality with reasonable prices whereby also a total-concept is presented (combinations of several clothing pieces and fitting accessories). This offers companies such as Cartouche a chance to get in.

Perseverance pays off
The contacts gathered during the trade mission have resulted – in short time – in several interesting orders and requests for samples. Hipercor, for example, has placed an order short after the mission. Also smaller names such as Amitié and Etxart & Panno were interested in samples. In June 2009 a new collection of Cartouche belts will find its way to Zara. The deal with the purchaser of casual clothing chain Coronel Tapioca was – at first sight - a mismatch. After a second visit and a sending of samples the price level of Cartouche's products (average €8-€9) seemed too high for Coronel. After some deliberation Cartouche has sent samples of products with a slightly lower quality of leather and a corresponding lower price, which has resulted in a first order. Van der Steen: “It is obvious that you have to be very flexible as a supplier, also you have to be focused on changes in the market. Especially in times of crisis”.

Besides the Spanish contacts that were visited, also the contacts with the other Dutch participants in the mission have proven to be valuable. Van der Steen: “Contact with Dutch colleagues are very usefull, you can help each other to discuss things such as experiences which one had with certain purchasers in foreign countries and often you do business with each other. It strengthens your Dutch network in a very positive way”. According to van der Steen the individual matchmaking during the trade mission has another advantage, besides finding the appropriate partners of final customers: “It is a perfect tool to get in contact with purchasers where you normally wouldn't get an appointment. And imagine that it turns out that a certain partner or client is not the right fit for you, you save a lot of time and costs”.

Often fear for the unknown, lack of time and problems with communication form stumbling-blocks for (northern) European entrepreneurs that want to become active in Spain. This is confirmed by Mr van der Steen when he reflects on the communication with his Spanish partners: “It is important to be patient and not to want to score too soon in Spain. The fact that we frequently returned and that we were able to think along with the customer's needs was experienced as pleasant”. The fact that we still hardly speak any Spanish has not shown to be a problem yet. For some interviews we hired an interpreter and in most companies there is always someone present in the department which is able to speak English”. Wise lessons, which show that even in times of economic adversity patience and persistence gets rewarded, especially in Spain!

For more information about opportunities for your company in Spain, please contact us.
For more information about Cartouche Fashion:, Mr Fred van der Steen, +31.416.375170.