The colors fade and the material crumbles. On the outskirts of Hem’s head office, near Lille, an imposing sign proclaims the brand’s historic motto: “Kiabi, fashion at low prices”. The building with its crude and unwelcoming shape will soon be ancient history. On August 7, the group’s 1,000 employees – out of more than 10,000 worldwide -, spread between Hem and the nearby Lys-lez-Lannoy site, will settle in Lezennes, on the outskirts of the capital of Flanders. , in a brand new 30,000 square meter complex. It will be divided between offices and commercial space, with a 3,000 square meter Kiabi “flagship”, a laboratory for innovations intended to supply the group’s 553 stores around the world. Two restaurants, a daycare and a children’s play area will complete the offer available on site, while family-related start-ups will be able to rent a space, with potential future partnerships with Kiabi at stake.
Patrick Stassi, its general director, makes no secret of it: this “living space” project, where employees will co-exist with customers, is directly inspired by Decathlon’s Domyos Fitness Club. He speaks from experience, he who managed the fitness brand of the leader in the distribution of sporting goods – he spent seventeen years there – when the center opened its doors in 2009, in Marcq-en-Barœul. “There will be a before and an after,” he promises. Because this new era comes at a time when the brand has been making a historic shift for two years, which is risky to say the least. While remaining a family brand and maintaining its range of very accessible products, Kiabi intends to adopt a responsible and sustainable model through a transformation plan running until 2035.
Around a hundred suppliers involved
Concretely, environmental indicators, such as carbon emissions or energy consumption, will now be placed on the same level as financial performance. On the manufacturing side, the group is supporting the transition of around a hundred foreign partners established in Bangladesh, Turkey, the Maghreb and even China. “To be able to both keep this promise of price and more sustainable model, it is essential for entry-level brands to work with their suppliers with a view to developing materials, volumes and production costs together” , explains Céline Pagat-Choain, senior partner at Kea & Partners. “They didn’t wait for us,” says Patrick Sassi, admitting his surprise. “They anticipated because, twenty years ago, we asked them to change on the social aspect, that is to say the application of the regulations, zero tolerance in terms of child labor, etc. They invest massively in controlling water discharge and carbon-free energies, because they know that if they do not do so, we – like our competitors – will look elsewhere .”
This balancing act has a cost. To be able to make this green shift, Kiabi has invested several tens of millions of euros, to the detriment of its profitability. “I could have made more figures by putting this money into Black Friday or into communication campaigns, but that would not have been consistent with the long-term vision that we have today,” continues the leader. A strategy validated by the Mulliez family shareholders, owners of the company. “We are not backed by an investment fund, so we do not have the objective of reselling the company in two or three years. This allows us to have time to take good care of our customers and our employees, while accepting the right to make mistakes”, specifies Patrick Stassi. According to him, it is ultimately a question of life and death: “If we continue to only follow a financial trajectory, we will not survive. Our shareholders will not want a brand whose model is not sustainable , we will have difficulty recruiting and customers will no longer come.” Customers, however, have not yet expressed environmental wishes. “When they buy a 4-euro t-shirt in organic cotton, that’s not why they came, but for the price. This is the first time that we’ve implemented a strategy that doesn’t does not respond to a request for our customers”, assures the general director.
Some failures in the past
If the brand can afford such investments, it is partly because it has managed to do well over the last ten years, despite Covid and the ready-to-wear crisis in France. “Kiabi is one of those players who took the digital turn very early, underlines Noria Cung, co-founder of the Pixis Conseil firm. An asset when demand increased during the pandemic. It is a company that communicates little, but which works a lot.” Notably in the sector, the group did not close any stores in 2023 and achieved a turnover of 2.2 billion euros, an increase of 1% compared to 2022.
The brand is not its first attempt at changing its model. At the beginning of the 2000s, it risked moving upmarket. A failure. “Kiabi experienced a big crisis every seven years and emerged from it grown. In 70% of cases, the causes were exogenous. For the rest, we made a small mistake by saying to ourselves that we wanted to get out of our DNA and we paid it in cash,” recalls Nicolas Hennon, boss of the group from 2014 to 2020.
The liberated enterprise method
From 2010, under the leadership of Jean-Christophe Garbino, then general director, the brand refocused on what made it strong: fashion at low prices. “This value proposition has become intergenerational and multicultural, in France and internationally,” says Céline Pagat-Choain. “I arrived from Spain where Primark had set up, and I saw how the brand was hurting the competition. This allowed us to gain a few months to find a good answer,” relates the former director general, today president of the women’s ready-to-wear brand Grain de malice. Upon his arrival, he established “the company liberation movement”, a managerial method which allows each employee to be given “the freedom to make decisions as close as possible to the customer”.
A revolution that pays off: in 2014, Kiabi became the undisputed leader in the sector and exceeded 10% market share. “Employee commitment comes from the fact that management shares the company’s strategy in complete transparency,” says Béatrice Hericourt, general director of Kiabi between 2019 and 2022. All the brand’s former bosses demonstrate extensive experience. no other like it. “The skills and level of commitment of the teams are unparalleled and we must preserve them,” insists Jean-Christophe Garbino. “I remember a consultant working in the company who told me: “Your employees give 200% of more than in other companies.”
New services coming to stores
Within the group, however, we fear the major changes to come. “We have less and less staff in the stores. It’s progressive, but we’ve been warning for a while. There are lots of things that are going to be put in place. The job will no longer be the same. How is this going to happen? What will the workload be?” asks Murielle Woldrich, central union representative at the CGT, employed for more than thirty years at Kiabi. The group wants to offer new services in stores. The future Kiabi Village near Lille should make it possible to test the new offer.
Already a pioneer in second-hand goods, the brand is testing a rental service. “Fifteen years ago, we said that digital was going to kill physical stores,” recalls Noria Cung, of Pixis Conseil. “We realize that this is not the case and that this model has a future. It remains a place where to make purchases and find services. The customer must have access to something other than their first primary need.” At the same time, even if France remains its main market, Kiabi continues its development abroad, via a franchise system. Recently, the brand landed in Uruguay and Egypt. However, despite the green lights, Patrick Stassi expects a difficult year in 2024, in a sector which should undoubtedly experience its share of new bankruptcies.
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