I guess it must be a drug – Peter Schüpbach, CEO Fashionfriends AG, Switzerland

Peter Schüpbach, CEO Fashionfriends

For all those that do not know you already: Could you sketch your business life before you started FashionFriends?

I started my first company when I was at University and quit my studies to build one of the leading ERP-Software companies in Switzerland at that time. During my past years I started several companies myself and invested as Business Angel in more than 30. So my business life was basically always driven building up something. I am a passionate entrepreneur and had always a startup aside of my business angel activities.

Before you started FashionFriends (a shopping club at fashionfriends.ch) in 2009 together with Oliver Jung and Klaus Hommels, you worked as an investor and advisor. As many successful business people drop out of the daily business life after a successful exit and become a business angel or found a venture capital company, what made you do this step „back“ into the daily treadmill?

It is my passion to build up companies. I am not good in just optimizing investments. I am more the guy sitting in the investment and try to bring in my experience and knowledge directly. The problem as a business angel is hat you are always an outsider. You do not smell the sweat of startuppers, you are not within the vibe of a team creating something exceptional: A Company! This also means daily treadmill with all the highs and the downs. But it gives me all the satisfaction of an exciting and thrilling business life. I guess it must be a drug.

FashionFriends grew steadily over the last 2,5 years, currently you have impressing 300.000 members. What have been your success factors and what has been the most efficient marketing channel?

First of all we did not grow as fast as other shopping clubs in other countries. But this was always our intention. We did not invest that much in member acquisition like others did. This led to a much higher conversion to buyers. At the end this is what counts. The success factors are the following: 1. Team, 2. Team, 3. Team, 4. Sourcing of great products/brands, 5. High performance shop platform, 6. Fully integrated logistic and warehouse management system and 7. Customer service that expresses our passion to serve our customers.

In the beginning you started the FashionFriends AG as a closed shopping club with brand sales campaigns. This year brought a big change, you introduced a new vertical strategy, which started with Brandstore, a brand online shop. As of today other verticals followed: Beautybox with cosmetics, Quaps, a toy online shop and Scoup, a local deals platform.

Why did you choose this vertical expansion instead of scaling the business by growing the number of your subscribers or applying the sales events model to other products categories: e.g. furniture?  

We do scale the flash sales model within FashionFriends. This model has a high traffic dynamic. We want to profit from that with the other verticals. Also the new verticals are independent teams that build these shops like independent projects but with the support of all back-office functions like logistics, admin or marketing. It is therefore more an overall scaling of the ecommerce competence that we have built in the past years.

De defined this strategy already end of 2009. We at FashionFriends believe that customers want to switch between flash sales or outlet and regular shops depending of the offering or the demand.

Could you shed some light on the organizational structure and the relationship between Fashionfriends AG and the newly founded Brunschwig FF AG? Which business areas are covered by Fashionfriends AG and which by the Brunschwig FF AG?

FashionFriends is covering our todays business units. The Brunschwig FF AG was founded to build a luxury multi-brand store. But both joint-venture partners have suspended the project and are focusing on their existing businesses.

Is the Brunschwig FF AG now more the operative business and the Fashionfriends AG slowly converting into a holding?

No – FashionFriends already acts like a holding fort he different business units. The Brunschwig FF AG is as I said a joint-venture that is not yet active.

The Brunschwig FF AG is a joint venture between Fashionfriends AG and „Brunschwig Holding SA“, which is also a shareholder of Fashionfriends and which operates 15 local fashion boutiques in Switzerland. Do you benefit from that relationship regarding your sourcing and getting better access to more brands?

Yes that was the reason we did this transaction. We profit in different ways from this relationship.

Jochen Krisch of Exciting Commerce (in German) recently wrote in an article that some shopping clubs would be on the verge of despair and disloyal to their original business model, because they had introduced local outlets or an open online shop. Isn´t that a rather limited view? Aren´t all shopping clubs which sell real brands sooner or later forced to integrate in other sectors for not being eaten later by other players with higher margins or a with a better access to brands?

Leading shopping clubs all have good relationship to brands. That is the essence oft he business model. At the end of the day all successful shopping clubs have one very important asset that no other ecommerce company in the fashion business has: Member and Traffic. And this generates huge volumes of sales. I see no signs that this model will be substituted. The contrary is true: The shopping Club model is still growing in all markets in all segments rapidly.

Yes we did different experimental things like offline-flash-sales and are expanding in other areas. But this means not that we believe that the shopping club model is coming to its end. It is more that we want to monetize on the success of this fantastic business model. And there is more to come. Just watch how GILT expanded in different segments and now is combining flash and regular shop sales within one platform. I strongly believe that customers want to walk through the big hip shopping mall with all the big labels for regular prizes and then go to the big outlet mall. If quality of products and services and prices are compelling – customers will like that and consume.

You introduced 4 vertical channels this year, will more channels follow in 2012 or do you concentrate on these channels? What are the next steps?

We have more verticals in the pipeline. We test these verticals first within FashionFriends and once we see that it works we build the team and start the separation process. We plan to open new verticals in the area of Home&Living and Sport in 2012. Maybe also Gourmet&Wine.

So that are your plans for business. And what are your private New Year´s resolutions?

My work-life balance was in 2011 more on the work side. I have to correct that in 2012. But I don’t make New Year’s resolutions.

 

We thank Peter for the interview, hopefully we see him at some time back again in Berlin!

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