Charles VöGele Holding Ag Business Information, Profile, and History

Company Perspectives

Vögele is the store for fashion that has already asserted and established itself in the society, and which offers an excellent price-performance-ratio. At Vögele, women, men and children can find high quality fashion at attractive prices. Production, administration and sales follow strict quality guidelines and ethic principles.

History of Charles Vögele Holding Ag

Charles Vögele Holding AG operates a cross-European chain of nearly 800 clothing stores. The company, based in Pfaeffikon, Switzerland, operates stores primarily in Switzerland, Germany, Austria, the Netherlands, and Belgium. The company also operates a store in Slovenia, opened in 2005. Since 2006, the company has begun testing its retail format in Hungary, Poland, and the Czech Republic as well. Germany remains the company's largest single market, with nearly 340 stores. In Switzerland, the company is the market leader, with 159 stores in operation. The company has been expanding quickly in Belgium and the Netherlands, with more than 150 stores in 2006. The company also operates 144 stores in Austria. Vögele designs nearly all of the clothing it sells, but operates no production plants itself. Instead, the company contracts its manufacturing to third parties. European contractors account for 40 percent of the group's business, with the bulk produced in Asian markets. Women's wear forms the group's largest sales segment, averaging more than 55 percent of sales in each of the company's markets. Men's clothing adds some 30 percent to sales, while children's clothing accounts for more than 12 percent of sales. Charles Vögele has traditionally targeted a somewhat older, low-fashion market. However, in 2006 the company launched a new, more modern store design to target a more fashion-oriented clientele. Listed on the Swiss Stock Exchange, Vögele is led by chairman Bernd H. J. Bothe and CEO Daniel Reinhard. In 2005, the company posted revenues of CHF 1.35 billion ($1.10 billion).

Motorcycle Mode in 1955

Charles Vögele (alternatively Voegele) was a successful race car pilot, who, together with his wife Agnes Vögele-Antig, opened a store selling motorcycle clothing in Zurich, Switzerland, in 1955. Although Vögele continued racing with some success through the 1960s, and even sponsored his own racing team, his real fortune came from his clothing sales. The success of the company's motorcycle fashions encouraged the company to expand its operations, and by 1957 Charles Vögele GmbH had acquired an expanded range of sportswear designs. The company then launched a new, larger store in Winterthur.

The new store was followed by a steady string of store openings, and by 1958 the company had already begun to eye operations on a national scale. Vögele's timing seemed perfect, as the retail clothing market in Switzerland remained dominated by small stores. Few large retail groups existed, and most retail clothing groups operated only a handful of stores. Yet the rising Swiss economy, and particularly the country's emergence as one of the world's wealthiest, encouraged the development of the retail clothing sector. Consumers not only possessed greater purchasing power, and more leisure time, but the spirit of the period also encouraged greater individual expression through clothing choice.

Through the 1960s, Vögele continued expanding its network of retail stores. In 1970, the company moved its headquarters to a larger facility in Rapperswil. The company had also been developing a larger, city-center retail format, launched with the opening of an eight-story store in Berne in 1969. Vögele also began experimenting with other formats, particularly a small format store. The new format not only allowed the company to enter smaller towns, it also proved the perfect fit for the newly developed shopping mall format. The first shopping mall in Switzerland opened in Spreitenbach in 1970, and included a Vögele store among its first tenants.

Through the 1970s, Vögele achieved national penetration with its retail network. The company also launched a mail order business, enabling the company to reach markets not yet covered through its retail stores. In support of its growing clothing sales, the company opened an office in Hong Kong, taking advantage of the lower production costs in the Asian region. Meanwhile, Vögele added new operations, including real estate development. In 1974, for example, the company built its own shopping mall in Pfaffikon, Charles Vögele's hometown. Pfaffikon also became the site of the company's headquarters in 1985.

By then, Vögele had already begun to look beyond Switzerland's borders. In 1979, the company entered Germany, through the acquisition of Josten-Joka, based in Sigmaringen. That acquisition provided Vögele with a base of 22 stores with which to launch its international expansion. Germany quickly became the company's most important market, and by the mid-2000s represented more than one-third of the group's total retail network.

Public Offering in 1999

Vögele began testing a new large-scale store format, dubbed Moderama, which featured selling space ranging from 4,000 to 6,000 square meters. The first Moderamas opened in Volketswil and Oftringen in 1984, and featured an extended clothing selection, including evening wear. The new format was destined exclusively for the Swiss market.

Nonetheless, Vögele's interest in foreign expansion remained strong through the decade. The company added a new Southern Germany retail group, Kurz, soon after the Josten acquisition. In 1988, the company expanded its German holdings again with the purchase of the 34-store chain of Cosmos Mode S.A. and Willy Korn AG. By then, too, the company had expanded its mail order operation, acquiring Germany's Braun & Goll in 1987. That purchase also brought the company additional retail operations based in Pforzheim.

Vögele, which had acquired an art gallery and auction house, Stuker, in the 1970s, targeted a new area of diversification in the late 1980s, founding its own travel agency, Vögele Reisen, in 1988. The company remained active in the travel market for more than a decade, before selling that business to TUI.

Retail remained the group's primary business, and in the early 1990s, Vogele, which had long targeted a relatively older, low-fashion-oriented clientele, attempted to expand its range of retail offerings. In 1991, the company bought 80 percent of the Dyckhoff Group, based in Cologne. The move was intended to bring the group into the high-end clothing sector. However, by 1995, the company had decided to abandon that effort, selling off its Dyckhoff stake in order to refocus itself on its core clothing market.

Vögele also added to its international operations, buying up Austria's Moden Muller GmbH in 1994. That purchase placed Vögele among the leaders in Austria's retail clothing sector, with a network of 57 stores. Back at home, Vögele stepped up its presence with the acquisition of rival Kleider Frey, adding 22 new stores to its Swiss network in 1995.

That year Charles Vögele also retired from the company, turning over its direction to sons Marco and Carlo. (Charles Vögele died in 2002 at the age of 79.) By then, Vögele counted nearly 330 branches, more than half of which were outside Switzerland. Under its new direction, the company decided to exit its flagging mail order business, which had become unprofitable in the first half of the 1990s. Instead, the company concentrated on revamping its retail network, revising its store design while investing in a new IT network to connect all of its branches to the headquarters.

The second half of the 1990s, however, presented a new challenge to the company. Faced with a growing number of rivals, such as H&M, Zara, The Gap, and others, Vögele recognized the need to expand its own network in order to remain competitive. For this, the company turned to Schroder Ventures, selling a majority of its shares to the investment group in 1997 in a deal worth more than $900 million. Under Schroder Ventures, the company continued to streamline its operations, selling off all non-core operations in order to focus exclusively on retail clothing sales.

By 1999, Vögele was prepared to launch its next phase of expansion. In support of this, the company went public, listing its shares on the Swiss and Frankfurt stock exchanges. The listing on the Frankfurt exchange proved only temporary, and the company removed its listing on that exchange in 2003.

New Markets for a New Century

In the meantime, Vögele had targeted new international markets. In 1999, the company entered Belgium and the Netherlands, acquiring 27 stores formerly operated by P&C Groep. The company further expanded its Benelux presence with the purchase of the Kien Group, adding 106 stores, as well as a warehouse facility, in 2001. Vögele paid NLG 126 million ($65 million) to acquire the chain from parent Vendex KBB, the Dutch retailing powerhouse. At the same time, the company added to its German holdings, buying Hannover-based Mac Fash Textil, with 40 stores, in 2000. By the end of that year, the company total retail network numbered more than 570 stores.

Vögele's rapid expansion in the early 2000s, however, cut deeply into its profits. By 2002, the company was forced to undertake a major restructuring of its operations, streamlining its organization structure, while also rolling out a new store design across its network. The new "jazzier" interior was developed in order to help the company attract a younger clientele. As part of the process, the company adopted the new store brand and logo, Charles Vögele Switzerland.

With its restructuring underway, Vögele began developing new expansion goals for the middle of the decade. With further growth limited in the Swiss market, and with its presence already well developed in Germany, Austria, Belgium, and the Netherlands, Vögele turned its attention to the developing Eastern European markets. In 2005, the company entered this emerging market, opening a store in Slovenska Bistrica, in Slovenia.

The successful launch into that market led the company to expand its Eastern European ambitions. In 2006, the company began testing the waters elsewhere in the region, opening pilot stores in Hungary, Poland, and the Czech Republic. Charles Vögele hoped to replicate its history of success in these new markets, setting the pace for its next 50 years as a European retail clothing leader.

Principal Subsidiaries

Charles Voegele Ceska s.r.o. (Czech Republic); Charles Voegele Polska Sp. z o.o. (Poland); Charles Vögele (Austria) AG; Charles Vögele (Belgium) B.V.B.A.; Charles Vögele (Netherlands) B.V.; Charles Vögele Deutschland GmbH; Charles Vögele Fashion (Hong Kong) Ltd. (Hong Kong); Charles Vögele Hungária Kereskedelmi Kft. (Hungary); Charles Vögele Import GmbH (Germany); Charles Vögele Mode AG; Charles Vögele Store Management AG; Charles Vögele Trading AG; Charles Vögele trgovina s tekstilom d.o.o. (Slovakia); Cosmos Mode AG; Mac Fash GmbH; Prodress AG.

Principal Competitors

Asda Group Ltd.; Hennes and Mauritz AB; Royal Vendex KBB N.V.; NEXT PLC; Arcadia Group Ltd.; C and A Mode KG; Vivarte; Stockmann Oyj Abp; Gruppo Coin S.p.A.; Peek and Cloppenburg KG; Cortefiel S.A.

Chronology

• Key Dates
• 1955 Race-car driver Charles Vögele opens a shop in Zurich to sell motorcycle clothing.
• 1957 The company extends its range to general sportswear and begins building a retail network throughout Switzerland.
• 1979 The company's first international expansion occurs with the acquisition of the Josten-Joka retail network.
• 1991 Vögele attempts to enter the high-end retail clothing market with the purchase of majority control of Dykhoff.
• 1994 The company enters the Austrian market with the purchase of Moden Muller GmbH.
• 1997 The Vögele family sells majority control to Schroder Ventures.
• 1999 Vögele goes public with listings on the Zurich and Frankfurt exchanges, and adds Belgium and the Netherlands to its international markets.
• 2005 A Vögele store opens in Slovenia.
• 2006 The company launches operations in Hungary, Poland, and the Czech Republic.