Bon-Ton Stores Inc., which needs to find a new chief executive officer and is grappling with difficult sales trends, could use a lift. It’s turning to private brands as part of the solution.
For fall, Bon-Ton is launching Ruff Hewn Grey, a younger, edgier and dressed-up version of the store’s Ruff Hewn brand. In addition, Ruff Hewn home and jewelry collections are being launched, and Exertek, currently a women’s active private label, is expanding to men’s. The Milwaukee-based regional department store operator isn’t letting up on supporting other private brands in the stable, which includes Laura Ashley for women and LivingQuarters in home and John Bartlett for men’s wear.
When done effectively, with the proper marketing and quality level, private brands can yield healthy margins and sales gains, and give a store some exclusivity. Bon-Ton officials, while acknowledging their challenges, have no complaints about the private-label side of the business.
“This is the perfect time to be investing in parts of the business that we feel have outsized growth potential,” said Steve Villa, Bon-Ton’s senior vice president of private brands. “Bon-Ton private brands do extremely well, and we believe there’s a big opportunity to drive top-line sales in this category.” In particular, private-label activewear and ath-leisure wear has been “explosive,” Villa said, making them ripe for greater investments.
In the fourth quarter, comparable-store sales dropped 7.3 percent, and last year they were down 4.2 percent. Private brands account for between $500 million and $600 million in sales, or about 20 percent of Bon-Ton’s total sales, which came to $2.77 billion last year. The situation at Bon-Ton, which operates 271 department stores in the Northeast, Midwest and upper Great Plains under various nameplates, is further complicated by the impending departure of president and ceo Brendan Hoffman, who has decided not to renew his contract when it expires in February 2015. A successor has not been announced yet.
Hoffman’s agenda, aside from pumping up private brands, has been to further e-commerce, open clearance centers, localize assortments, personalize e-mails to customers based on their purchases, expand radio frequency identification technology and foster “depth versus breadth” so the company has less breadth of styles and focuses on bestsellers.
Ruff Hewn Grey will be available in 76 stores and online beginning in August at Bon-Ton, Boston Store, Bergner’s, Carson’s, Elder-Beerman, Herberger’s and Younkers. The collection will be merchandised with its own fixtures and signs. It will emphasize “essential” day-to-evening items, layering, hardware details and on-trend items, including moto coats, chiffon trim camisoles, sweater dresses with asymmetric hems, herringbone blazers with an ombré effect, sleeveless ruched and chunky dolman sleeve turtlenecks, denim washes and novelty leggings, among other items. Prices range from $36 to $129.
Ruff Hewn home has a rustic, casual, traditional feel, with bedding, comforters, sheets, blankets and quilts, throws, tabletop and home decor. The collection will be offered in 98 stores and online beginning in August.
Ruff Hewn jewelry is also rustic and casual and includes necklaces, bracelets, earrings and rings in burnished metals, distressed stones and leather. Prices range from $17 to $40. The collection will be available in 60 to 70 doors beginning in August. Ruff Hewn has been an exclusive private brand at Bon-Ton since the fall of 2003.
Exertek, in addition to offering men’s for the first time, will offer, among other items, a larger presentation of tunics, leggings and skeggings (skirts with attached leggings). Exertek products have characteristics such as wicking, stretch, flat seams to avoid chafing and wide waistbands to help flatten the stomach.
While private brands will be a bigger part of the overall assortment, as Villa said: “We don’t set goals for the penetration. We really let that flex based on customer response and where we see opportunities in our overall assortment. We are happy we are around 20 percent of the company’s business. We will let that grow on its own. We still are national brand driven, but we have a very well-developed private-brand business and we continue to look for opportunities to supplement or tweak the assortment based on customer trends.”
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