After a previous franchising experiment collapsed in the 1990s, Oui is now back in fashion on these shores thanks to its new model
It’s not often you come across new franchises entering the UK that have been going strong for over 50 years, but Oui, the fashion company, is one of them. “It’s a family business that started in Germany after the second world war,” says Thomas Boettger, sales director at Oui. While the sartorial powerhouse today specialises in female fashion, that was not the case when Paula and Mendel Gottesdiener first launched the company in the early 1950s. Instead, they tailored clothing for children. But even though customers loved to dress up their offspring in this garb, it was when the Gottesdieners’ son Nathan took over the business in the 1960s that Oui switched gears and began creating couture for women rather than kids’ clothes. And this would prove to be a stroke of genius as it would become the company’s dominant revenue stream for decades to come. Today fashionistas can peruse Oui’s garments through wholesale partners in 25 countries around the world. “And now it’s run by the third generation,” says Boettger. “It’s a very stable German company that is fully owned by the family.” However, the road to becoming a stable sartorial institution hasn’t been without the odd dropped stitch along the way.
For instance, while Oui is currently looking for franchisees in the UK to join its new model, this isn’t the first time that the franchisor has attempted to franchise on these shores. In fact, the company first franchised stores in Britain in the 1980s. “At its peak we had ten stores in the UK,” says Boettger. “But it was a different time.” While initially successful, most of the stores had closed by the end of the 1990s. One of the reasons was because it simply became too expensive for the store owners to stay open as Oui treated franchisees like wholesale partners. This left them having to buy all clothes from the franchisor and deal with the cost themselves if they didn’t sell enough. “We made a lot of mistakes and at the end of the day it didn’t work out,” says Boettger. As a result all franchised stores in the UK closed – save for one in Harpenden, which is still operational under the old model today – and Oui instead focused on selling its clothes through wholesale retailers like John Lewis and House of Fraser.
But that wasn’t the only thing encouraging the company to try out some new threads and rethink its business model. “Retailers, and not just fashion ones, were having more and more problems,” says Boettger. “People were starting to buy things from online retailers instead of local shops.” With the advent of online retail giants like Amazon and Alibaba as well as innumerable smaller firms there has been a clear shift towards shopping online rather than in high street stores. Depending on where they are in the world, between 23% and 37% of consumers have stopped purchasing things in stores due to online shopping platforms, according to a report from PwC, the professional service firm. And the turning tide was surely felt by Oui. “It was a lot of pressure,” says Boettger.
Fortunately franchising proved to be the answer to its worries. But rather than using the same old model that had failed the company in decades gone by, Oui decided to try out something new. “We began to invest in a new franchise model six years ago,” says Boettger. “It helped solve a lot of our problems.” In a bid to cut franchisees’ costs, ensure their profitability and the survival of the new network, Oui seriously reimagined its franchise offerings. Not only did the fashion company devote itself to sharing the costs of setting up new stores but it also changed the way it distributed products to franchisees. The new model means they only buy the things they sell. Until a customer has bought something, the franchisor owns the clothes and pays for the transportation costs. “Essentially, we stopped thinking like a wholesaler and more like a retailer,” says Boettger.
However, that was far from the only change to the old model. “Most importantly we started a new training department,” says Boettger. This new section of the business is in charge of bringing budding franchisees up to speed. “Mostly we focus on how they should handle consumers,” Boettger explains. “We train them how to make sales in a way that makes people come back to their stores.”
However, Boettger explains that Oui only bestow candidtes of the highest calibre with the right to become franchisees. “Ideally a franchisee should already own a fashion store so they know what they’re talking about,” says Boettger. “And typically, she should be the kind of Oui lady we think of when we make our collections, a woman between 30 and 60 who is fashion-oriented.” Given their affinity with the franchise’s target market, franchises can quickly get up to speed and, as an added benefit, if they had an old store they turned into a Oui shop, then existing customers would be more easily persuaded to shop with the brand. And while Boettger explains that franchisees don’t have to be female, he does believe that it is an advantage. “If you go to a ladies’ fashion store you’ll very rarely see a man selling there,” he says.
And he has reason to be confident in the strategy: Oui has established 26 franchised stores in Germany in the six years since the new franchise model first launched. “We now have stores in big cities like Cologne, Berlin and Munich,” says Boettger. “But we also have them in smaller cities with 20,000 to 30,000 people.” And given the company has plenty of people interested in becoming their business partners, this number is sure to grow.
Having announced its plans in November 2016 to roll out up to 35 stores in the UK by 2021, Oui surprisingly hasn’t signed up any franchisees to the new model yet. “We are ready,” says Boettger. “But we aren’t going to commit to anything we are unsure of. We only want to do things we’re really convinced of and that means waiting until we find the right franchisee.” But while the franchisor is consciously taking it slow, it isn’t staying idle. “We are in talks with five potential partners but it’s too early to reveal anything just yet,” says Boettger.
And given that the company has been around for over five decades, it’s safe to say that Oui knows a thing or two about playing the long game.