Reframing the future of an iconic skiwear brand

When Willy Bogner Sr. founded his sports apparel business in 1932 in a Munich warehouse, skiwear was driven by function, not fashion. A Nordic skiing champion and Olympian, Bogner Sr. broke new ground by marrying design with performance materials to create a luxury winter sportswear brand. His innovative approach quickly won a following among aspirational leisure skiers, as well as the franchise to design the German Olympic ski team’s ski suits – an association that lasted for more than 80 years.

Willy Bogner Jr. took over the business in 1977. An elite sportsman like his father, on retiring from alpine skiing he pursued a career as filmmaker and cameraman. His role as a ski stunt coordinator for no less than four James Bond films added to the BOGNER brand’s allure.

Over its 90-year history, BOGNER has demonstrated agility, responding to the demands of an increasingly technical sports sector through R&D into performance materials. At the same time, it has diversified into fashion apparel to extend sales beyond the ski season. By 2019, the company had grown to 70 retail shops, concessions and partner stores in Europe (particularly Germany, Switzerland and Austria), North America and China, and employed more than 700 people worldwide.

At the beginning of 2020 EY-Parthenon was mandated by BOGNER to help stabilize and reshape the business. Working closely and collaboratively with the leadership team, the EY-Parthenon team developed a performance improvement program aligned to a three-year business plan.

This plan was central to BOGNER’s recovery. “With a round of refinancing scheduled for the summer, the plan had to be robust to withstand the intense scrutiny it would receive from the financing parties,” says Andreas Porstner, Director, Turnaround and Restructuring, Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft. “We acted as a trusted advisor, stress testing the plan and identifying further opportunities to strengthen the business.”

With a clearly defined three-year roadmap in place, BOGNER could increase profitability and build a foundation for sustainable growth:

• The first year was focused on stabilizing the company, with revenue and cost management as the main priorities. Securing a refinancing package at this stage was crucial — with this in place the company would have financial stability and scope for future investment.
• With the company on a more secure financial footing, the second year concentrated on reshaping the business. This involved the relocation of BOGNER’s Munich headquarters and reducing headcount, developing a new brand strategy and outsourcing logistics.
• With the first two phases completed, in the third year the company would be well-placed to push further into international markets, enhance its brand positioning and strengthen its online presence. Put simply, it would be investor-ready.

Securing finance at the start of a pandemic

In normal circumstances, the refinancing round would have been standard procedure. But when the first wave of the COVID-19 pandemic struck in March 2020, lockdowns forced many stores to close temporarily. It quickly became apparent that, in the face of stalled sales and increasing uncertainty about the 2020-21 ski season, more drastic measures were necessary. The need to secure finance to manage the fallout from the COVID-19 pandemic suddenly became urgent.

“The scope of our engagement with BOGNER changed,” explains Frederik Drescher, Partner, Turnaround and Restructuring, Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft. “The situation now demanded a major transformation effort in parallel with the performance improvement program that we were brought on board to help deliver. The team had to seamlessly switch between more performance-oriented situations and hardcore structuring.”

In addition to the syndicated loan, the refinancing package included a state funding element. Through the summer of 2020, the EY-Parthenon team worked closely with financing parties and with colleagues internally who had experience bringing in state aid.

Building consensus around the solution was crucial. The EY-Parthenon team was able to instil confidence in the BOGNER stakeholders through their deep sector experience and their credibility with BOGNER’s finance partners.

The refinancing agreement would underpin the transformation of the business and drive forward the performance improvement program.

“The EY-Parthenon team played a crucial role,” explains Frank Wiesner, CFO, Willy BOGNER GmbH. “They supported us all the way through our negotiations with the banks, helping us clarify issues and respond to questions raised by our financing partners.”

As Drescher explains, EY-Parthenon’s role in the refinancing was multi-faceted. “There is the conceptional part, developing a refinancing plan. Then there is the communication part, convincing the lenders that the plan is achievable. And then, once the refinancing is done, there is the reporting and monitoring part which involves frequent status updates to the lenders to create trust and transparency.”

With vital finance secured, BOGNER could move forward with the restructure.

Navigating complexity

Turning a business around is challenging, more so when it takes place in the middle of a pandemic. Much of the work is technical; when necessary, the core EY-Parthenon team of six were able to tap into the vast EY-Parthenon ecosystem and consult with EY-Parthenon professionals with experience in IT, tax and legal structures, HR and workforce management.

The EY-Parthenon team was always hands-on, working closely with the BOGNER leadership team to develop the restructuring concept and get their buy-in. “This meant that ideas were sense-checked with people within the business and implemented together with them,” says Drescher. “And in the midst of all this complexity it was important for us to maintain a strategic perspective.”

Reducing headcount as part of the restructuring was one of the most sensitive challenges. “Personnel reduction must be handled fairly and delicately,” says Drescher. “Good communication and preparation, coupled with taking a collaborative approach with the workers’ council were key.”

By September 2022, all three phases of the performance program had been completed. It was the ideal time for BOGNER to make the move to its new Munich headquarters – an environment that will promote leading-edge work processes in a collaborative, creative space.

Pivoting from a performance management program to a major turn around and transformation scenario in mid-pandemic, was, in Drescher’s words, “like skiing at very high speed on a very bumpy slope in total darkness.” But as he points out, “a crisis situation is also a catalyst for building teams and relationships based on mutual trust.”

It was this one-team approach, coupled with active management and transparent processes that kept the project on track. Says Drescher: “Tangible results are only achieved by a very detailed breakdown of a program into individual measures and action steps. Financial or other KPIs need to be tracked and very actively managed. While this sounds and actually is very technical, it is an extremely important success factor.”

In a remarkable turnaround, BOGNER has outperformed its ambitious transformation plan. In the financial year 2021-2022 the company’s performance exceeded pre-COVID-19 levels, with sales of €166.3 million and EBITDA of €19.4 million, more than €8 million above target.

Most importantly, the company is on a firm footing and its workforce’s future is more secure. In the face of multiple challenges, the BOGNER brand name has proven to be extremely strong. It’s remarkable heritage endures; now, through refinancing and restructuring, the company is ready for the next expansion phase.

“The EY-Parthenon team’s outside-in perspective helped us to benefit from existing best practices, find the right approach and arrive at a tailor-made solution,” says Schneider. “The result clearly exceeds our own expectations. We are efficient and lean, clear of debt and we have the right strategy to continue our sustainable growth path. That is something that BOGNER can be very proud of.”