Scotch & Soda’s Next Chapter

Fashion retailer Scotch & Soda is relaunching with a new strategic focus. After a period of retrospection and organisational assessment, its new owner Bluestar Alliance is looking to drive growth through a major strategic overhaul, hiring a new chief product officer, formerly at Acne Studios, restructuring teams and introducing new categories and lines. This includes a capsule menswear collection, launching today, co-created with Scotch & Soda’s new ambassador, musician Joe Jonas.

Initially founded in 1985 by Laurent Hompes in Amsterdam, Scotch & Soda was originally known for producing affordable menswear, later introducing womenswear, accessories and denim ranges, with a brand heritage championing the spirit and lifestyle of the Dutch capital. During the Covid-19 pandemic, Scotch & Soda, like many independent brands, fell victim to unpredictable market conditions, exacerbated by high inflation and a squeeze on consumer spending. In March 2023, the company filed a bankruptcy request to Dutch operations.

Scotch & Soda was purchased in April 2023 by American brand management company Bluestar Alliance — the group that counts the likes of Hurley, Bebe, Elie Tahari, Brookstone, Justice and more among its brand roster — which is overseeing a new era for the Dutch label.

The Scotch & Soda brand is also focusing on signing new licensees and franchisees to increase brand awareness and seeking to reinvigorate its retail ecosystem, with new locations across key international markets, including a newly opened flagship on Carnaby Street in London.

Now, BoF sits down with Bluestar Alliance CEO Joseph Gabbay, to understand more about how the company is strategically preparing Scotch & Soda for intentional growth and product category expansion while retaining its heritage as a label from the heart of Amsterdam.

How are you restructuring for success while preserving brand identity?

One of the ways that we are restructuring is by identifying the design, sales and marketing talent that was in place and layering on additional talent to those teams to position them for success. We have kept the team that was already at the headquarters in Amsterdam and built upon it as we plan to expand and grow the brand.

Our consumers outside of the city love the fact that Amsterdam is at the core of Scotch & Soda’s identity and its heritage — it’s one of our strengths. Our campaign photo shoots take place in Amsterdam and we have a team of marketing members based there and across our markets that our head of marketing oversees from the US.

There is an incredible archive at the Amsterdam headquarters where the design team is based. So that team, which is made up of people that have been with the brand for years, along with new people who have come onboard to offer a fresh perspective, have access to this archive, which ensures that the heart of the brand is beating strongly.

We are not looking to change the brand’s identity or make it US-based — the heritage is clearly part of what our consumers value. The leaders who were retained also know the brand well. With them in place, they are building teams to continue our strong market share in Europe, Australia, New Zealand, the Middle East and more.

Which markets is Bluestar Alliance focusing on for Scotch & Soda and why?

Both in the US and Canada, where we were originally pretty weak, it’s grown in leaps overnight, so we are expanding our retail footprint there and opening up standalone Scotch & Soda stores. We are opening outlet stores as well to help facilitate our end-of-season product. We have grown the business in the US by 50 percent since we acquired the company last year — it most likely will supersede sales generated this year across the rest of the globe.

The second-biggest market for us that we are targeting has been Asia — specifically, China, Japan and Korea. Initial leads have been strong, with the two stores in China we opened recently performing well. In Korea, we have approximately 15 proposals from very compatible franchise partners. We are looking to pick the best in class that are going to help us expand in these markets.

Our global retail footprint will aim to be 20 percent of our business model. We currently operate over 250 stores globally and we plan on hitting $1.4 billion in sales by the end of 2025.

At the same time, we are still looking to grow in Europe. While there was turmoil in the UK market prior to our acquisition, it rebounded really well. We re-opened our Carnaby Street flagship recently and we have a few more stores in the pipeline over the next 12 months in the UK, with our wholesale business growing there too. We also announced recent expansion in Belgium and France, and are about to announce additional expansion in Austria.

What are the plans for Scotch & Soda’s retail footprint expansion?

It really depends on the market — we are still trying to test the markets. Our global retail footprint will aim to be 20 percent of our business model. We currently operate over 250 stores globally and we plan on hitting $1.4 billion in sales by the end of 2025. By the end of 2024, we are looking at hitting about $900 million in retail sales, so brick-and-mortar is definitely part of fulfilling that expansion plan.

Aside from our own stores, having the best partners in place and the right relationships with the right department stores — like Saks Fifth Avenue, Nordstrom, Neiman Marcus and Bloomingdale’s in the US — has been really positive and that is where we are seeing a lot of growth.

We also have a new pricing structure. We had to bring pricing back down to where it was in its best day to make it more affordable and work properly for the brand because, in part, it was the pricing model which wasn’t working.

What is your strategic focus on licensees and franchisees?

Our core business is licensing. Once we got our arms around the brand, we had our partners come in and take over certain aspects of the business. We have a licensed partner that handles all of the menswear business globally and we have a licensed partner that handles all the womenswear business globally: United Legwear and Mamiye Brothers respectively. Although they are separate organisations and separate teams, they are collaborating together in the same office in Amsterdam, so everything stays consistent.

Our main focus in the beginning was putting those partners in place; breaking out men’s and womenswear separately so that we could grow the womenswear business.

We have had many calls from licensees to get into perfume and women’s handbags too, for example — particularly accessories categories. We held off on everything until we were ready and prepared, which we are now, so we will be expanding into those categories.

I think a strong marketing strategy is what had been lacking under the previous company ownership and we are strong believers of, and investors in, businesses where there is heritage to market.

We are also looking to enhance the franchise model and we are looking to enhance our brand image in those territories I have mentioned. We are announcing the opening of an additional 20 franchise stores — franchisees are very important for us. In New York and Amsterdam in particular, there are a number of franchisees who want to work with us and we are choosing them now.

Which product categories is Scotch & Soda looking to expand into?

By the end of 2025, we plan to have expanded into a host of categories as we head towards becoming a lifestyle brand for the home as well. Fragrance is top of mind for us — we produced a fragrance called Barfly for a while and consumers still demand it, so we are still producing it. It is not what we do best, but we are doing it through the same factory to keep the consumer happy. You don’t want to let anybody down.

It is really driven by retail demand. Retailers request that we have women’s handbags displayed among our offerings, whether it be in Saks or other wholesale partners. Bloomingdale’s, for example, asked us to consider branching into homewares, which is something we are now looking into. So we are engaging with that demand but it has to make sense for the brand.

What can we expect from Scotch & Soda in the near to mid-term?

Now that the business has stabilised — and I would say we finally stabilised about a month ago — what is really going to be changing a lot and driving the brand forwards is our marketing strategy. I think a strong marketing strategy is what had been lacking under the previous company ownership and we are strong believers of, and investors in, businesses where there is heritage to market. The first collaboration, which we signed right off the bat, is with Joe Jonas and we have about five new, very strong collaborations coming out over the next 9 to 10 months.

This is a sponsored feature paid for by Scotch & Soda as part of a BoF partnership.