Karen Millen managing director Gemma Metheringham is powering ahead with ambitious international and online expansion plans for the fashion brand, despite the firm’s eponymous founder launching a legal battle for the name.
UK women’s wear brand Karen Millen has seen its international sales grow to represent 60% of the total over the past two years - a rise of 10% – and Metheringham sees further potential for the business to “at least double in size.”
But she concedes that in the current economic environment, “timescales become more flexible than maybe you would have thought”.
While already present in 45 countries, Metheringham is particularly excited about Karen Millen’s planned foray into mainland China this year, with one store set to open in Beijing, a second in Shanghai, as well as less-concrete plans for an e-commerce site here as well.
“We believe there is a big opportunity for us in China, we’re already trading in Hong Kong,” says Metheringham.”In Hong Kong we’re experiencing the biggest like-for-like growth of any market”.
Globally, the company operates a mixed franchise/owned store model, yet in China, it is planning to run the business itself. For Metheringham, the opportunity in the country is too great for it to share with someone else.
“We found out that a lot of brands that started out franchising in China are actually trying to buy the franchise back and have control of the brands. I think it’s such a big market opportunity, you want to present the brand in the best possible light,” emphasises the Karen Millen managing director.
While the company has concrete plans to enter mainland China, the retailer’s ambitions do not end there, with Metheringham adding there are “other markets we’re investigating”.
“We’re investigating quite widely in South America, we’d really like to be in Mexico, we’d like to be in Brazil.”
Omnichannel is another major focus for the company’s international growth, with the brand currently operating international fulfilment operations in both the US and Australia.
The change in shopping behaviour is one that Metheringham is particularly keyed into, highlighting the “circular” nature of shopping which sees consumers browse online before going into the store, trying things on, and then going online to make a purchase.
This shift in consumer behaviour is one that is changing the way the company approaches its stores. “What you want to think about is offering the best of the best brand experience” in stores; your “website is the window on the world, and the store is about the relationship you have with the client,” she says.
The company designs all of its clothing in-house, with a pattern room, machinists and technicians based at its Old-Street headquarters. Metheringham emphasises that design is part of the business. “It’s at the heart of our business. We make clothes, and clothes are tangible for us.”
While Metheringham says she is always looking at new sourcing options, long-term relationships with manufacturers are key to being able to deliver quality the brand requires. The company sources 50% of its products in Europe, and the remainder in China.
“We would say that it takes a couple of years to start working with somebody and get them to a quality level and understanding.” The level of complexity in Karen Millen’s garments has also led some manufacturers saying “no” to working with them.
The company’s design strategy has not been without criticism. Not least from founder Karen Millen, who is currently in a legal battle to trade under her own name again after selling it to former owner the Mosaic Group for GBP120m in 2004.
She was recently quoted in The Guardian as describing the brand as “looking a little staid”, adding that she felt the majority of the collection is “too heavily branded and overpowering”.
Metheringham, who has been with the company for 13 years, and worked with the founders (Millen and former husband Kevin Stanford) says she’s a “bit baffled by the comments,” and that she felt “they had been falling out of love with the brand long before they sold it, and that’s why they sold it”.
“From my perspective, it makes me feel really sad for the people that work here. There are lots of people who work here who were here when Karen was here, and they have worked really hard to stay true to the brand values and very true to what the clients who love the brand want. And I feel sad because it doesn’t recognise or acknowledge any of those people.”
Millen sold the business in 2004 to Mosaic Fashions, whose dominant shareholder was Icelandic bank Baugur. When Baugur filed for bankruptcy in 2008, Mosaic was taken over by the administrators of Kaupthing Bank and renamed Aurora Fashions. In early March last year, Aurora announced plans to spin off Karen Millen as an independent company.
Speaking about the spin-off, Metheringham says the Karen Millen brand was very different to other labels in Aurora’s stable, which include Warehouse, Oasis and Coast, in “pretty much every way imaginable”, with its higher end positioning and international focus.
She says Karen Millen’s needs were so different, yet being part of a larger group there was a “danger you’d get treated as one pot, and when you’re negotiating with a department store the Aurora Group would come to a deal, but that might be counter to what Karen Millen needed or wanted. So the separation for us was about being able to choose our growth internationally”.