German fashion and lifestyle brand Gerry Weber International AG has entered into an exclusive strategic global sourcing partnership with Dusseldorf-based Techno Design GmbH, a subsidiary of global fashion infrastructure company PDS.
As part of the partnership, Techno Design will take over the existing sourcing operations of Gerry Weber from 1st June 2023 and cater to all global sourcing needs. This also includes inputs for product development, managing the selection and monitoring of manufacturing facilities as well as the capacity planning.
Techno Design responsible for sourcing, compliance, sustainability and quality requirements
Suppliers have already been informed and meetings are planned for next week, a spokeswoman said in a message to FashionUnited. Techno Design will also be responsible to fulfil Gerry Weber's compliance, sustainability and quality requirements.
“Techno Design has a very good reputation in the market and brings other key prerequisites for a successful partnership. Experience in taking over a sourcing organization, financial strength, and innovation. In addition, we quickly found a basis of trust with each other. For us, as well as for Techno Design, it is all about maximum continuity. Because one thing is clear: quality, fit and delivery reliability should remain our strengths,” commented Gerry Weber International CEO Angelika Schindler-Obenhaus in a statement.
Techno Design has more than 25 years of experience in the fashion industry and provides vertically integrated end-to-end sourcing solutions for apparel, home textiles and hard goods. It has a presence across the globe with sourcing offices in markets such as India, Sri Lanka, Bangladesh, China and Turkey. Through the company’s sourcing structure, Gerry Weber will be able to take advantage of agility and proximity to the consumer and enable retailers and brands to enhance their profitability through strategic sourcing and favourable credit terms.
“We believe in the brand and look forward to working with Gerry Weber in a true strategic partnership. Together, we are committed to provide the best product to the Gerry Weber consumers,” said Rajive Ranjan, managing director of Techno Design.
As part of PDS, Techno Design will also support the diversification of the current sourcing mix and enable Gerry Weber to adapt to the changing market requirements by offering an agile and adaptive sourcing platform.
“Over the past two years, PDS’ bespoke sourcing solutions are catering to brands and retailers with an innovative plug-and-play solution for all their sourcing and manufacturing needs. PDS curated specialised solutions including Sourcing as a Service, Brand Management Services and now expanding to take over the entire global sourcing operations for brands. We are also constantly innovating our offerings so we can stay ahead of the curve and remain a vital partner in the global fashion value chain,” explained Sanjay Jain, group CEO of PDS.
Restructuring currently underway
With Gerry Weber outsourcing its sourcing needs, this means that there will be job losses in this area, which the company calls “unfortunate” but also “unavoidable” in a message to FashionUnited. Currently, about 50 employees work in the sourcing department at the company’s headquarters in Halle, Germany, and about another 50 in offices in sourcing countries.
“We are very aware that there are many questions about this. As of today, we are not yet able to make any statements on concrete figures in view of the ongoing talks and negotiations with trade union and the workers’ council, and out of respect for all those affected,” said the spokeswoman. “We want to strengthen our position in the sourcing markets and use synergy effects.”
Just last month, Gerry Weber had filed for the initiation of proceedings of a financial restructuring process so that it can achieve a sustainable balance sheet restructuring of its liabilities and a capital reduction to zero, which would also result in the delisting of the Gerry Weber shares.
The restructuring project is a result of complex challenges posed by multiple corona-related retail closures in Germany and shifts in customer behaviour - triggered, among others, by the Russian war of aggression in Ukraine, high inflation and lower real disposable incomes.