ShowroomPrivÃâs David Dayan says event sales group was lagging behind in premium segment

ShowroomPrivé’s David Dayan says event sales group was lagging behind in premium segment

Translated by

Nicola Mira

French event sales group ShowroomPrivé recorded a downturn in fiscal 2022, but recently reported a 17% growth in business volumeDavid

David Dayan – ShowroomPrivé What is your take on the start of the new fiscal year?

David Dayan: We had a good [first] quarter, proof that the initiatives we put in place are working, and our strategy is paying off. We have been growing for three quarters in a row, thanks to some of the policies we have deployed, notably premiumisation, as we aim for a more attractive, upmarket product range, with more desirable brands. Currently, 70% of our range falls within what we call the ‘gold/platinum’ category. These are not luxury labels, but very desirable ones like Levi’s, NikeAubadeFaguoLacosteVanessa Bruno

FNW: Which growth drivers?

DD: Beyond event sales, the idea was to consider that there were many things we could do, like the marketplace, which is now a driving force for the group. It enables us to have a more up-to-date, consistent assortment, so that we have both an opportunity range and a permanent one that integrates it. What is also working are the services we introduced, which allow labels to take advantage of our metrics, traffic and audience. Our audience is highly specific, and consists of women who love fashion and online shopping. We generate traffic for labels’ e-shops and their stores.

FNW: What about developing markets [outside France]?

DD: We neglected the international side of the business to some extent in the last few years. We are now exploiting this growth driver, and the business is accelerating significantly in Spain, Italy, Portugal and Belgium. Showroomprivé’s assortment is very attractive for French consumers, and had to be made available internationally. So we made our voice heard again, marketing-wise. We know that Europeans love French brands, and not just those. There is an appetite for international brands and value for money. In the context we’re familiar with, we’re seeing our international business growing faster than in France.

FNW: One year , what is your assessment?

DD: It’s moving in the right direction, the results are confirming that it was a good acquisition. Sales increased by 33% in [Q1], proof that there is a strong potential among millennials. They are a strategic target for us, and for brands too. This means that The Bradery’s vigorous growth is additional to ours, giving us a well-diversified, varied range.

Le Village is ShowroomPrivé’s high-end section

FNW: How do these elements fit into the roadmap you recently unveiled?

DD: Our goal is to continue to be profitable. We have a roadmap defined by the acronym ACE: “to adapt, consolidate and expand.” ‘Adapting’ notably means listening to the market, and responding to the demand for attractive brands, for products that are “sustainable,” and sell at prices that are consistent with consumers’ declining purchasing power. The services and permanent collections [we have introduced] are part and parcel of this adaptation.

‘Consolidating’ is based on the premise that after 16 years in business, we have 26 million members and 3,500 partner brands. This means we can improve our operations, profitability and customer service, but also our ability to handle large product flows.

‘Expanding’ hinges on deploying all the growth drivers that I mentioned. For the time being, this is simply a roadmap, on which we will provide more information at a later date. For this, we have strengthened our executive committee since the departure of Thierry Petit

FNW: Will this necessarily mean expanding the product range?

DD: Diversifying the range makes sense in conjunction with our marketplace and the premiumisation drive. These are consumer expectations. A marketplace allows us to bring in many vendors and in-demand products. The ‘Le Village’ section in our site, which we launched last year

FNW: Zalando, Europe’s leader in fashion e-tail, is taking the opposite path, and plans to streamline its range. What does this say about the market’s evolution?

DD: Zalando

However, we too are becoming selective about the products we sell. Zalando will hold on to major brands, and move away from lesser-known, more distant ones, with a less clear range. Showroomprivé too has greatly reduced its fashion assortment. We have discontinued plenty of anonymous second-tier brands, removing them from our catalogue. Especially on the marketplace, which was a little too open at the beginning. We stopped working with many vendors that weren’t up to our standards. At the same time, to be frank, our business was lagging behind in the premium segment.

Collection IRL

FNW: As you restructure your range, will womenswear remain at the core of ShowroomPrivé’s DNA?

DD: Of our 22 million members, 75% are women. Fashion and ready-to-wear are in our DNA. They are also the sectors that have the highest volume of unsold inventory. So it’s quite natural for us to have significant volumes there. Fashion now accounts for 55% of Showroomprivé’s business. But we’re also growing in sectors that appeal to other audiences. Even though we’re keen on having more male customers, we’re getting there step by step, by expanding the range.

For example, the home decoration business has become significant, accounting for 20-25% of our revenue. The market is bouncing back, because people in France have done a lot of home improvements during the pandemic. Our beauty business is expanding. The sport-lifestyle sector is doing especially well right now. And of course, there is a future for fashion. I keep hearing about labels that are disappearing. But these are usually companies that haven’t been able to invest in logistics, e-commerce and marketing tools, because they were managed by investment funds that probably pushed them to adopt too short-term an outlook. On the other hand, groups like InditexBa&sh

FNW: You have a womenswear label called IRL. What are your plans for it?

DD: The goal in launching IRL was to have our own brand to complement the opportunity range. IRL currently generates a revenue of approximately €10 million for us, showing that there is room for this kind of additional brand. Our site visitors looking for bargains or specific products are also keen to find some of the latest items. This is why a so-called ‘permanent’ range makes sense. We would like to extend this private-label strategy, we’re thinking about introducing other categories, like lingerie. It will never be a huge part of our business, but if it’ll be complementary and relevant, we’ll do it. Even in sectors we’re less knowledgeable about, all our tests have worked.

FNW: What are your estimates for the rest of fiscal 2023, which is plagued by inflation?

DD: We see that the purchasing power of French consumers is under pressure, and special attention is paid to price. In our partner brands’ stores, footfall has decreased and purchases have shrunk. In this context, we think we are a good partner for brands, giving visibility to their products and allowing them to quickly dispose of large inventory volumes, our primary business. We have noticed recently that we are signing up many new members and customers, because our range ticks the boxes of those who aspire to small pleasures in times of crisis, when people are reassured by well-established brands, but also by brands with values, especially sustainable ones. So we feel our business is headed in the right direction, although, to be frank, it is difficult to make forecasts for the coming months. We remain cautious.

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