Swedish sneaker label Axel Arigato is expanding in Germany and internationally. With the help of social media, the brand first took off digitally in the direct-to-consumer business before growing via wholesale and through its own stores in recent years.
At the opening of its newest store in Berlin Mitte, the two founders, creative director Max Svärdh and managing director Albin Johansson, explained why they value their physical presence despite starting out as a digital-native brand. They also spoke on the state of the business of fashion, future plans and what brands need to do to stay relevant.
What has been your recipe for success in social media marketing in three words?
Svärdh: Timing, dialogue and humour. We started early with Instagram, speaking like a friend to our customers using humour.
You started in 2014 as a direct to consumer brand and then expanded. How would you describe your business model now?
Johansson: I would say like an all-established retailer almost, we had to be where our customers are. Sometimes it’s best to open our own stores like here in Mitte, sometimes it’s best to work with our wholesale partner. Sometimes we do online, sometimes we do marketplaces, it’s a complicated business model but that is what everyone is doing in this industry.
We started as a direct-to-consumer brand, but I don’t think that is the only way to do it today, and maybe it will change going forward. We want to be a brand and what is best for that brand today and tomorrow?
Axel Arigato in facts and figures
- Founding year: 2014
- Investor: private equity company Eurazeo acquired a majority stake in the brand for 56 million euros in 2020
- Collection size: ca. 300 sneaker models per season, ca. 300 styles in menswear and womenswear combined
- Instagram followers: one million
- Drops: Axel Arigato releases one new style every week
- Production: in Europe, with majority based in Porto, Portugal
- Points of sales: seven stores, 11 shops in department stores, 250 point of sales, available in more than 134 countries online
- Retail prices: 220 to 250 euros for a pair of sneakers to 650 euros for a down parka
Your current investor is Eurazeo, a private equity fund that has also invested in luxury outerwear brand Moncler and still has a stake in Vestiaire Collective. What has changed for Axel Arigato since you got investors?
Svärdh: From my perspective very little. I guess from yours as well?
Johansson: Yes, they’re not directly involved in what we’re doing but of course we have a tight relationship. They have been on a lot of growth journeys. We are a growth brand, but of course neither of us worked in such a big company. They are helping us with what could happen that we haven’t thought of yet, so we can work on it proactively.
The current retail landscape is challenging, many fashion brands are also closing stores. Why have you decided to open another store in Germany?
Johansson: Both of us love retail. This is our way of connecting with the customers in a totally different way, which is not possible through the digital channels. We want to have a lot of energy in the brand and for us it’s a lot about the physical connection, the community, the experiences.
Svärdh: It’s about the feeling. You can create feelings to a certain extent digitally but not to a full extent like in a physical space. Based on our philosophy, when it comes to building a brand, it’s very linked to a physical space.
Do you plan to open more stores in Germany?
Johansson: We’re open to opening more stores in Germany. We think it’s an important market, an interesting market. We obviously want to increase our presence here, but we’re still in the beginning of our journey.
Which cities could be interesting after Munich and Berlin?
Johansson: There are several cities we’re looking at. Hamburg, of course, Frankfurt, the Ruhr Area...
Svärdh: Also, overall in Europe. We started to penetrate the European market and we still have a long way to go. It could be a country where we already have a story, or even a new country like a store in the Netherlands. We have been looking into Amsterdam, was that during the covid pandemic or after?
Johansson: Both. We have been looking at Berlin for five years maybe, we have been looking into Amsterdam for several years as well. Great spaces will not appear in front of you when you’re starting to look, it’s important to have ears and eyes pointed towards the market. Everything is changing, you see it with covid now and people working more from home. How does it affect how they’re moving, how does it affect where they want to spend their time? We want to be a relevant brand in relevant locations.
Speaking about staying relevant, what is important for a brand right now in your view?
Johansson: I think this goes for everyone in the fashion industry: the willingness and the speed to change. If you’re not doing that, you’re not going to be relevant. Also, lots of long-term thinking. Will you be here next year or the next ten years? Risks are key, if you’re not going to take risks, you’re dead in my opinion. If we’re looking at brands that have been around much longer than us, they’ve taken risks, but calculated risks. Without the willingness to do that, it’s hard to be relevant long-term.
What was the last situation where you took a risk that you’re proud of right now?
Svärdh: Risks can be applied to everything – from our product to trying a pop-up to a new concept within design, when we’re trying new spaces. It can be applied to all parts of the business, so risks can change.
How is the brand doing in Germany?
Johansson: Germany is one of the countries that is performing best for us now. Why? If you’re just looking at the economy, it would probably not be one of the best, due to energy prices and all that’s happening. But it’s doing well and all categories are progressing well. Ready-to-wear is growing faster than shoes, but shoes are still our big thing. We feel like what we did in Munich and now in Berlin, increasing our presence with events and content, is also resulting in a higher brand awareness.
Through which kind of events do you try to appeal to consumers?
Svärdh: We’re doing a lot of different events, from big to small. Yesterday we had our second course on how to DJ in Paris – like a music academy. You can sign up online and attend for free. That is different from the party you will see [at the store] tonight.
Johansson: We also have an event in Stockholm tonight. With a really good artist.
Svärdh: The mentality of being more than a transaction is what we have been focusing on a lot. And then space. Space is luxury – not having products everywhere. It’s the retail experience we want to give.
Is everything you don’t have in the store available online?
Svärdh: We have omni-screens by the entrance, so if we don’t have the size or colourway here, you can go to the website through that screen and somebody in the store will help you to place an order and have it shipped to your home.
How is business going for you in general? There are some worries about what the future holds. How do you see fashion retail right now?
Johansson: Exciting. Some people might find it tough and hard, but it also creates a lot of opportunities. Not every brand or company might survive this, but the ones who go to their roots - who their customers are - will come out of this stronger. That’s our hope and what we’re working towards as well. In the third quarter, we had more than 70 percent of growth.
Svärdh: That’s a big question. Product-wise, we’re expanding, we’ve hired more people within design from much bigger brands, of which we will see the outcome next season. Next to the assortment, we’re working with the purpose: Who is the product for, what purpose is it serving?
And for the business side?
Johansson: Europe is our home market where we built up the biggest awareness and the biggest distribution. We really want to become a more global brand. Even though we’re present, we need to get deeper into North America but also Asia. Growing is fun and looks good, but it is also painful the bigger you get, if you don’t have things under control. That’s what we feel. We’re eight years into this journey.
Svärdh: Feels like 20 (laughs).
Johansson: It’s tough but a lot of fun. It’s not just the two of us and then some friends. No, we have 220 employees today and we want to grow more but it needs to be done the right way.
Svärdh: It’s a different type of machine than four years ago, or just two years ago.
This article originally appeared on FashionUnited.DE. Translation and edit by: Weixin Zha.