Interview with Harel Wiesel, Co-Founder & CEO of FOX

22/01/15

Everywhere you go around Israel, you are likely to meet people wearing Fox clothes.

The FOX chain has approximately 140 stores in Israel and over 268 points of sales in 15 countries worldwide.

In addition, the FOX group has developed retail operations for additional leading brands - such as:
FOX Home, American Eagle Outfitters, Aerie, Laline, Sack’s, Billabong, The Children's Place, Marcha Ballerina, Disney, Yanga and Charles & Keith.

Last week we had the pleasure of interviewing Harel Weisel - Co-Founder & CEO of Fox Wizel Ltd - to learn more about the various transformative changes in the clothing industry.

As a global retailer and distributor of private label apparel products for men, women and children, what do you think are the major factors that will drive changes in the clothing industry worldwide?

The major factors which will drive changes in the clothing industry are:

Increase in purchasing power of lower segments of the population, which will result in more consumption circulation, especially in the lower and middle segments of the clothing business. At the same time, we will also witness faster mobilization inside the social casts.
Using new and advanced fabrics and technology will lower the production cost and it will also allow the industry to rely more on technology than on manpower.
Mobilization of production from country to country and closing the professional gap between them

The Fox Group is now an exclusive franchise for leading brands in the US, UK and Europe. How do you look at the prospects of expanding your business to Asia and Middle-Eastern countries? What are the reasons?

Fox Group is a franchise for apparel brands from the US and Australia as well as a leading manufacturer of its own garment brand ‘FOX’. We intend to add more franchisees with real time concrete knowledge of the retail arena in the countries apart from those we are in. We are already operating our stores in places such as the Philippines, Thailand, Singapore, India, etc.
For that manner, we offer the best partnership and real ‘know how’ of franchise operation and brand management.

Emerging technologies are changing the entire supply chain in both subtle and transformative ways. What further developments do you foresee in the apparel supply chain in the next few years?

I think, clothing brands around the world will try to diversify their supply sources and they will also try to cut the lead time of the supply chain. At the same time, apparel makers will try to be more flexible with the production in order to provide fast as well as quality solutions to the buyers and to deliver emerging trends in shorten time to market.

With continuing potential for labor disruptions at the ports, disruptions from natural calamities and other factors, how important is contingency planning within the supply chain operation? What are the keys to an effective contingency plan?

We are managers but not prophets :( so what we can do is narrow the proportion of relying on one single source, both in production and transportation. For instance, we can try to have more ports in the country of origin; we can also try airways and roadways.
But at the end, we are also limited to what we can do; general strikes or major disasters will impact us like all the others.

While consumers have come to expect a seamless experience across all channels, delivering on that promise can be very complex. What are the keys to overcome such challenges and be successful?

From our experience, this seamless trend is more visible in innerwear and sportswear segments. These segments are very small in our business. We have not seen it yet in the high-end and casual fashion segments, that's where we are mainly focusing our business.

How do you see bricks and mortar stores competing with e-commerce and m-commerce companies coming in? Is it viable in textile and garment sector?

I’m not an expert in internet business but it seems that the garment business has a long way to go as it is still in the single digit market share.

The main reason is that customers still want to feel the fabric and to try it on prior to the purchase.
On the other hand, I’m sure that the trend of digitalization will increase in the clothing business with supportive technologies.
For instance, we have already seen mannequins representing the size and color of individuals. So the gap between brick & mortar stores as well as online shops will become less over the next few years.

Let me ask you this, the global travel retail sector is expected to reach US$ 60 billion by 2015. What do you think is the share of garment shops in international airports and on-board shopping in flights)?

The airport business is in a loop, on one hand they have massive consumer traffic, on the other hand imaginary rent, so only high-end apparel businesses with a very high gross margin can sell there and the sales are not high.
What they should do is to go all the way with the "percentages from the revenue" scheme, this could bring a lot of other brands which could generate massive sales, and both sides could be satisfied, the consumers, the brands and the airport authorities, wherever they are.
But nobody is brave enough to think outside of the box, and it is not happening.

Countries like China are now in a transition stage and are moving to high-end apparel manufacturing. How will this impact the current production and marketing of high-end apparel segment?

From our experience, even after ten years, China will still remain the major garment sourcing destination of the developed and developing countries.

Can you let us know about the increase in demand for organic cotton garments globally?

This trend is rapidly growing in countries like Japan and Australia and rest of the world is sharing only a fraction of market share in organic cotton garments.

Being a global firm, what would be your message for companies’ aspiring to become truly global?

First of all, if you would like to play in the global market you must conduct an ’open business environment’ both in your company and outside of it.
You must be open to the local trends and integrate them with the DNA of your brand. You must have a thorough knowledge about the tastes and preferences of every country.
You must show your presence in the markets as early as possible, in order to let them pick whatever styles they like and to consolidate the orders early enough to maximize your global supply chain advantages.
You have to monitor global trends, cost of rent, cost of labor, etc. for each country.
In a nut shell, the new buzz word is “Glocal” you must have global thinking with local solutions,

Finally, to be successful in today’s world, a company must have their finger on the pulse of the marketplace. Is there any technique for this?

There is no one technique for feeling the market pulse, However if you have the following - you'll be on the right track:

You must integrate the best technologies,
You have to know the DNA of your brand
Be consistent with your message
Use the best tools to analyze your sales,
Always investigate your wins and your failures,
Hire brilliant people for key positions,
Keep them in your company, while they improve their knowledge and experience.

These ingredients with a systematic work environment will provide you with the secret formula to getting where you want to be.

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