Steven Birkhold assumed the chief executive officer position at Lacoste’s U.S. business on Jan. 4 and is laying out a postrecession strategy for the French sportswear brand.
The former Diesel USA ceo’s game plan includes expanding merchandise assortments outside of Lacoste’s core polo business, opening new outlet stores to de-emphasize markdowns in full-price doors, opening a concept store for the trendy Lacoste Red collection and doubling marketing expenditures in the U.S.
“Lacoste is a brand that is overwhelmingly associated with one iconic product, the polo shirt. That’s not necessarily a negative, but we want to position ourselves as an authentic lifestyle brand associated with a wide range of sportswear,” said Birkhold in his first interview as ceo of Devanlay U.S. Inc., the U.S. subsidiary of Paris-based Devanlay SA, the worldwide apparel and accessories licensee for Lacoste. He succeeded Robert Siegel, who retired at the end of last year.
Currently 30 to 40 percent of the U.S. business is in polo shirts. “There are literally thousands of sku’s available from the Lacoste collections in France and maybe we’ve been too narrow in our editing process for the U.S. market over the last few years,” said Birkhold, who has taken steps to widen assortments for fall.
Woven shirts once accounted for 16 to 18 percent of sales, but that figure has fallen off dramatically in recent years as the business emphasized basics. Sweaters could also become a fertile business, said Birkhold. “Someday, Lacoste will have to figure out how to do bottoms in a stronger way,” he added.
Total Devanlay U.S. sales declined in the single digits in 2009, down from $320 million in 2008, a result of the difficult macroeconomic environment. Women’s sales, which comprise 35 percent of the business, were hit harder than men’s, which is 65 percent.
The fall men’s and women’s runway collections will be shown Saturday during New York Fashion Week at the tents in Bryant Park. In a preview with WWD, Lacoste creative director Christophe Lemaire showed looks featuring Eighties colorblocking and creative riffs on volume and proportion, including polos stretched into maxidresses or capelets. There are vivid melton wool coats with puffy kimono sleeves for women and deconstructed, double-face wool blazers for guys. “It’s very comfy, wooly, casual and chic,” said Lemaire.
Lemaire was particularly excited by the commercial potential of the new Red line, which debuted last spring. “It’s younger and more street, but in a very clean way,” he noted.
In July, Lacoste will convert its SoHo store in New York to a new concept shop focused on the Red collection, which is aimed at 18- to 25-year-olds.
Lacoste operates 67 full-price stores and 21 outlet doors in the U.S. There are no plans to increase the full-price store count, but the company will add nine outlets this year. The expansion of the outlet business is part of a strategy to reduce markdowns in its top full-price doors. The company has identified 11 key “A” doors in the U.S. where it will no longer sell markdown merchandise, instead moving almost all sale merchandise to its outlet network.
Lacoste sales in the U.S. are made up of 70 percent owned retail (including 6 percent from its e-commerce site) and 30 percent wholesale accounts. Birkhold would like to see that ratio shift to 65-35, in part by offering differentiated product to various tiers of wholesale partners.
Lacoste is expanding its collaborations with independent designers and top specialty retailers. A capsule collection from designer Leah McSweeney of the women’s streetwear label Married to the Mob is set to make its debut in April, and an exclusive men’s range with Barneys New York will launch in the spring. These build on existing collaborations with Jeffrey New York, as well as seasonal holiday collaborations with well-known design figures. In the next month, Birkhold said collaborations with a top U.S. specialty retailer and a “major” European women’s designer will be unveiled.
Birkhold expects total U.S. sales to return to an upward trajectory this year and Lacoste will double ad spending to help fuel that growth. Lacoste ad spends have declined over the past three years, with the brand outlaying $13.3 million in 2007, $12.9 million in 2008 and $5.9 million in the first nine months of 2009, according to TNS Media Intelligence.
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