Dusseldorf The Düsseldorf fashion retailer Peek & Cloppenburg has been working on its new web shop for two years. The company is investing a three-digit million sum in digitization. But for customers, nothing will change at first.
Sven Bernhardt, who is also responsible for e-commerce as Chief Customer Officer at P&C, sees no contradiction in this. “If customers don’t see any change at first glance, then we’ve done everything right,” he says. However, the company has built a completely new platform on its own, which will now be rapidly further developed with new functions and services.
But now the retailer is likely to increase the pace of change significantly. Because P&C boss Edgar Hert has ambitious plans. “In 2026, our sales should be almost twice as high as this year,” he says in an interview with the Handelsblatt. That would be more than four billion euros. And by then he wants to become “the leading multi-brand omnichannel retailer for fashion in Europe”. In other words, the market leader among fashion retailers who sell both online and in their own branches.
Drop in sales and losses in the pandemic
For the trading house, not to be confused with the sister company of the same name in Hamburg, that would be no less than a complete turnaround. Because the family business has gone through difficult times. Sales in the important German home market have been falling for years. Only the constant expansion in Eastern Europe made up for this.
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The pandemic then pushed the company to its breaking point. In both 2020 and 2021, sales collapsed by 30 percent, and losses were made in both years. “It was a massive disruption to the balance sheet of our business,” Hert recalls.
The company is fortunate to have an owner family, the Cloppenburgs, who firmly believe in expanding the business. P&C has repeatedly spent a lot of money to prepare for the time after the lockdowns, Hert reports. New houses were opened again and again during the pandemic. The company has just started in Belgium.
He assumes that the turnover of around 2.2 billion euros from 2019 can at least be reached again this year across the entire group, says Hert. “That shows that our concept works despite all the headwinds.”
The head of the company’s ambitious plans also have the backing of family head Patrick Cloppenburg and his fellow shareholders. “The family is completely behind the digital transformation,” assures Hert.
The family has largely withdrawn from operational responsibility. Patrick Cloppenburg brought Hert from the car manufacturer Daimler four years ago and promoted him to an increasingly influential role against internal resistance. Hert now has a largely free hand – also because he won the internal power struggle against Stephan Fanderl, who was also said to have ambitions for the top post at P&C in Düsseldorf.
Former Karstadt boss Fanderl joined P&C at the beginning of 2021 as sales director. Three months ago, however, he was surprisingly promised away to the Swiss P&C holding company JC Switzerland. There he should take care of strategic issues and the development of new business models.
Own development instead of standard software
Hert is taking an unusual path at P&C in e-commerce. Instead of using standard software and adapting it to his own needs, he had the new platform developed himself. “It’s a bold move, but we believe it’s the right one,” he says. “In order to be better than the competition, you have to take money into your hands.”
The manager has the backing of the owner family for the digital transformation of the retailer.
(Photo: Peek & Cloppenburg)
“In the beginning it is a little more expensive and takes a little longer to develop the system yourself than to buy one off the shelf,” admits Bernhardt. “But thanks to our 120-year history, we also have many special features in our stationary presence,” he says. That’s why the retailer wants to offer customers something special online, too. “And if you want to customize standard software, it can ultimately become much more expensive,” says the P&C manager.
“We have a lot of catching up to do online,” says Bernhardt, who joined P&C just over a year ago. It comes from the competitor Breuninger, which is already significantly further both in e-commerce and in linking the web shop with the branches.
The innovations at P&C remain vague. Bernhardt announced that the retailer would like to personalize the shop for each individual customer in the future. Regular live shopping via videos is to be integrated. From the beginning of next year, customers in online retail should also be able to access every article in the stores.
The fashion retailer wants to invest more in its own brands such as Jake’s in order to set itself apart from the competition.
(Photo: Jelle Draper for Peek & Cloppenburg)
However, experts are irritated that the P&C shop, even after two years of renovation, offers little that is new apart from promises. “You compete with e-commerce platforms like Zalando, which serve exactly the same target group, but are much more advanced in their development,” points out an industry insider. The technology is not a milestone compared to the competition.
“If you come to the party too late, you have to be able to dance all the better,” warns Stefan Wenzel. The e-commerce consultant knows the requirements of the industry well: he was a board member at Tom Tailor and head of Germany at Ebay. “Wanting to be on the same playing field as Zalando and Co. means competing for the same customers,” he points out. To do this, you have to do the same thing much better – or something completely different.
Many new branches planned in Europe
The P&C boss wants to set himself apart from the competition with his own brands such as Review or Jake’s. “Our own brands are a core part of what we offer,” explains Hert. The company will invest there and position the brands more independently.
However, a first attempt to position the own brands more clearly did not work. At the beginning of the year, Patrick Cloppenburg brought in the digital expert Marcus Diekmann, who, as managing director of the P&C subsidiary International Brands Company, was to develop the area further. But after just three months he resigned from the post. With his unconventional ideas, he was not able to assert himself at P&C.
>> Read also: Unrest at Peek & Cloppenburg – Marcus Diekmann leaves the management for private labels
P&C sees the Europe-wide branch network as the second big advantage compared to the competition – also for the expansion of e-commerce in other countries. “If we start online in a market where we already have business, we have the great advantage that we are already known there and know the customers and their needs well,” says manager Bernhardt.
This is why stationary expansion is unbroken despite the digital offensive. This year, 15 new stores have already been opened or renovated, and at least ten more are to follow next year. Italy is likely to be next, followed by other markets in Eastern and Southeastern Europe.
At the same time, the new web shop is to be introduced in more and more countries. And it is precisely in the linking of the two channels that company boss Hert sees the real strength of P&C: “The aim of our transformation is for customers to be able to use everything we introduce both online and in store, so that there is no separation in between more.”
More: From a student company to a billion-dollar corporation – and then into the crisis: These are Zalando’s problems