Can Acne Studios Get Back on Top?


For its new Paris flagship, Acne Studios chose to open its store on Rue Saint Honoré, outfitting the 385 square-metre location in the iconic limestone material that clads most of the city’s historic buildings — an homage to the capital of luxury fashion as well as one of its most competitive markets. The shop sits just a stone’s throw from the Place Vendôme jewellery district, on a street where luxury megabrands like Balenciaga and Saint Laurent have recently been joined by buzzy names like Ami and Le Labo.

For most luxury brands, seizing the opportunity to open shop on a street like Rue Saint Honoré is a no-brainer. But for Acne it’s something of a shift: the Stockholm-based label has previously shied away from popular shopping streets in favour of more low-key destinations, chief executive Mattias Magnusson said. (Its other Paris stores, for example, are tucked away in the gardens of the Palais Royal or in the upper limits of the Marais.)

The fashion industry Acne is operating in today is wildly different from the one it started out in in the late ‘90s. In the post-Covid luxury landscape, where large brands with deep pockets command the lion’s share of consumer attention, staying relevant as a small, independent label is harder than ever.

The current macroeconomic climate is only adding pressure: high rates of inflation in the US and Europe, slowing GDP growth, and the war in Ukraine have clouded the outlook for consumer demand this year, while the current Covid-19 lockdowns in China are already weighing on many brands’ top-line growth. Acne has adjusted its sales forecast this year from €320 million to €300 million ($338.4 million to $317.2 million) to account for recent disruptions in the China market, Magnusson said.

Acne has proven it can weather a storm: in 2020, the brand’s revenues were broadly flat year on year at €260 million, when, by contrast, the outbreak of the coronavirus pandemic sent sales of personal luxury goods plunging by of 22 percent that year, according to consulting firm Bain & Co.

But Acne’s rebound has lagged luxury’s biggest players, with 2021 sales rising just 3 percent to €270 million ($285 million), while top-end, institutional players like LVMH and Hermès saw sales jump by double digits. While the company is on track for double digit growth this year, it still remains a niche business in today’s luxury market, where leaders like Chanel, Gucci and Louis Vuitton do billions in annual sales.

“The most important challenge for a brand this small is being heard. Larger brands can dwarf you with their media spend capacity. Smaller brands should be finding stratagems to get noticed, a lot, while spending relatively little,” Bernstein analyst Luca Solca said, pointing to Moncler’s “Genius” project as an example. “I am not sure Acne has been doing this.”

That’s about to change, Magnusson says, as the Acne team looks to fuel the brand’s next stage of growth by making more noise in the market. The new Paris store is only the first step: more high-visibility locations are planned to open this year in Toronto, Singapore and Miami.

Meanwhile, the brand is ramping up investment in marketing with a new global campaign shot by Talia Chetrit to promote its hero Musubi bag, due to be splashed across outdoor billboards and street-level posters, as well as exploring more special projects like the recent “sunset ceremony” staged in Malibu in collaboration with artist Angelo Plessas. The spiritually inflected fashion rave drew buzzy actors like Nico Hiraga and musicians like Arlo Parks and Lykke Li, garnering valuable awareness in the US market, which has been driving luxury’s post-Covid rebound.

Acne cut a path to success during fashion’s normcore era by eschewing large marketing budgets and elaborate influencer strategies, instead relying on guerilla marketing tactics and word-of-mouth to sell its designs. Hero items included solid-wash, straight-legged jeans and leather bombers. But if the brand is going to continue to grow in today’s hyper-competitive landscape, it simply needs to make more noise, Magnusson said.

“What I see is there is a much bigger correlation these days between size and relevance. The big groups are pushing up so much on all aspects, that in order to be relevant, we also need to push up,” he said. “It’s not that we want to be radically different from what we are. Ultimately it’s about creativity and desirability, and then making sure you give people the opportunity to see it.”

It’s not that we want to be radically different from what we are. Ultimately it’s about creativity and desirability, and then making sure you give people the opportunity to see it.

Acne Studios was initially co-founded by executive chairman Mikael Schiller and creative director Jonny Johansson as an Andy Warhol Factory-esque collective in 1996, launching into the fashion market a year later with a line of jeans. Over the years it expanded its focus from upscale denim to become a cult lifestyle brand, known for its high-end shearling aviator jackets and wool scarves. Its fusion of Scandinavian minimalism with a streetwear inflection appealed to consumers looking for a fashion take on casual basics, and the label bagged a spot on the Paris Fashion Week schedule.

“The clean appeal of their denim, ready-to-wear and accessories has long appealed to our customer,” said Liane Wiggins, head of womenswear at luxury retailer Matchesfashion, which has stocked the brand since 2005. Its knitwear and denim have remained strongest sellers for Matches over the years, Wiggins said.

Brand strategy was often rooted in gut instinct rather than meticulously crafted commercial plans, said Magnusson, but before long Acne Studios had become a brand with a strong, modern identity and a track record of profitable growth, which was financed through the cash flow generated by the business.

As the market’s interest in ultra-understated, normcore styles slowed, the brand managed to develop new categories — ramping up sales of its colourful, dad-adjacent track sneakers, selling more statement knitwear, and introducing handbags and sunglasses in candy-shoppe hues ready for Instagram.

In 2018, the company teamed with Goldman Sachs to explore a possible sale, at a reported company valuation of up to €500 million, but landed on bringing on new investors instead: China-focused investment IDG Capital and its long-standing Asian retail partner I.T Group, which also works with names like Comme Des Garçons, Simone Rocha and BAPE. (The two firms acquired a 41 percent stake in the company from previous investor Öresund, which originally came on board in 2006). It was hoped that the new partners would give the brand a leg up in Asia, a key market for luxury that already drove one-quarter of Acne’s sales before the pandemic.

The deal came ahead of some of one of the toughest years the industry has ever seen, however, as the onset of the Covid pandemic in 2020 sent sales across the fashion market tanking. And while the Acne mark has its fair share of luxury cachet, its historic focus on selling ready-to-wear at high contemporary prices made it particularly vulnerable: the middle market has struggled since the crisis as shoppers gravitated towards special, high-luxury purchases like Chanel bags, while scaling back on other wardrobe investments.

Still, Acne has been surprisingly resilient; its flat sales during the pandemic could be seen as confirmation of its go-to status in a challenging segment of the market. The company has also taken the opportunity to evolve its distribution model, shrinking the share of wholesale from 40 percent of sales in 2019 to 25 percent today. Acne is focusing instead on direct channels where it enjoys greater control over pricing and higher margins on each sale.

Going forward, it’s hoped that the new investments in its store network and marketing strategy will help the brand realise untapped growth potential, especially in accessories. Bags, for example, a cash-generative category that drives a significant proportion of business for leading luxury brands, remain underdeveloped at Acne, accounting for less than 10 percent of annual sales, according to Magnusson.

North America, a current bright spot for the luxury industry, will continue to be an area of focus for Acne, in addition to untapped Asian markets like Singapore and Taiwan.

In some fashion capitals, awareness of the Acne mark transcends cult status: after being the go-to brand for certain wardrobe staples since the early 2000s, it’s more of an institution. But in the broader market, awareness of the Acne brand is still pretty low, Magnusson has realised. The brand still has a great deal of virgin territory in which to expand.

“I speak with a lot of people both from within the industry and outside, and what becomes quite evident to me is: people who know us tend to generally like what we do. But most people barely know that we exist,” Magnusson said. “So to let a bit more people know that we exist is a good start for generating some growth also.”



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