Wednesday 13th September 2006
David Reiss: staying in control
The 1980s were boom time as the business expanded to 15 stores. But as the decade wore on, warning signs began to emerge. ‘Boom times don’t go on forever: right at the end of the 1980s we had an enormous hike in rents, at the same time as people stopped spending with no warning. We weren’t geared up for that like we are today, and in 1990-1991 we had to restructure.’Reiss decided the only way to move forward was to become totally vertical and only sell own-label goods. ‘We decided to become more aspirational and focus on the brand,’ he says. ‘We changed the whole way of approaching the business – to make a personal statement and also achieve the margins we needed to survive.’ Although the recession was a tough period, Reiss believes this laid the foundation for the company’s current success. ‘It was a pivotal point in the whole way I look at things today, and that’s no coincidence,’ he says. ‘Some of the most successful retailers today are the ones that got sucked into that recession.’ Reiss also became an early innovator in the use of offshore manufacturing: ‘I could do this because I had the manufacturing background,’ he says. ‘I started going to the Orient and looking at other places where I could produce.’ In the new retail environment of the 1990s Reiss realised that the only way to perform in the high street was to be a major player. ‘Throughout the 1990s it was a case of building the image,’ he says. ‘It wasn’t just about products any more, but the aesthetics of the stores.’ By the end of the 1990s things were going ‘very nicely’. But the high street began to change again, as innovative chains such as Zara and H&M began to broaden the options available to the fashion and cost-conscious. ‘I realised we needed to take the brand even further away, to make it even more aspirational,’ he says. ‘I didn’t want to be derivative. The whole high street follows the herd; they see a concept and try to copy at the best price. I decided that was not where we wanted to be.’ Reiss adopted a twin-pronged strategy – investing in designers to ensure that Reiss’s products were unique, while ensuring that the quality was such that they could be sold at an aspirational price. The strategy paid off when in 1997 Reiss won the Drapers’ Record award for men’s retailer of the year. ‘We had a very strong menswear niche,’ he says. ‘Our core customers were in their mid-twenties to late thirties, people who aspire to own beautiful designer clothes but don’t want to pay designer prices.’ Reiss realised that this ‘bridge’ concept could appeal to the wider and potentially more profitable women’s market. ‘Men buy clothes when they need to, but women shop till they drop,’ he says. Through 1999 the company worked on the launch of Reiss womenswear, which proved to be another turning point for the company. ‘Everybody said we were crazy, it’s such a competitive market, such a tough environment,’ says Reiss. ‘But I was determined to make it happen.’ This time it wasn’t all plain sailing, however: ‘It was one of the times when I didn’t have total control,’ says Reiss. ‘I took someone on board with all the right credentials, gave them a clear brief and thought I would get what I wanted. But as soon as the collection hit the stores I realised it wasn’t what I wanted – it just didn’t sit with the menswear.’ Reiss took ownership of the women’s line and spent the next year going up a very steep learning curve. ‘I became very hands-on because I had to,’ he says. ‘In menswear you have four collections a season – in womenswear you need new things every week. You can’t have products in the stores too long; you need newness, freshness, a level of excitement all the time. That, in turn, means you need more flexible factories.’
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