Jason Verhoeven's Brown Label has been making steady strides in a difficult denim market since launching three years ago, a trend that is likely to continue as the brand expands its international reach...
Jason Verhoeven's Brown Label has been making steady strides in a difficult denim market since launching three years ago, a trend that is likely to continue as the brand expands its international reach and prepares to make its first foray into U.S. department stores in time for the holiday season.
The Glendale, Calif.-based company said Saks Fifth Avenue placed an order this week to carry Brown Label in three of its top performing stores, making Saks the first domestic department store to carry the brand's women's offerings. And in September, the company signed Germany's Select Trading to serve as the brand's European distributor, with first deliveries scheduled for spring.
Verhoeven, who spent 13 years with Chip & Pepper before venturing out on his own to launch Brown Label in October 2004, said the move into department stores is a natural progression for the brand.
"We never wanted to go into department stores right off the bat," said Verhoeven. "We wanted to start with the boutiques. Sometimes in the department stores it's harder to succeed unless your name is starting to get known."
Name recognition shouldn't be a significant hurdle. Over the past three years, the brand has steadily expanded its presence among the premier denim boutiques and now sells in more than 150 stores across the country, including Atrium in New York, E Street Denim in Chicago, Pittsburgh Jean Company and Fred Segal Fun in Santa Monica, Calif. The brand's profile has risen internationally as well. In 2005, Verhoeven signed distribution agreements to bring Brown Label to Japan and Canada. The brand currently sells in seven Canadian stores located in Toronto, Calgary and Vancouver, and in Japan it can be found in more than 20 stores, including the Barneys New York stores in Shinjuku, Ginza and Yokohama. The time spent gaining a solid footing with customers has also allowed Verhoeven to prepare the company to operate at a level that would make the move into department stores possible.
"We felt now we could start opening the department stores slowly," he said. "We wanted to feel our production was ready and our product was solid."
Verhoeven acknowledged the Saks order is a "small test," but he anticipates expanding to more stores for spring. The initial order consists of Brown Label's boot-cut, flared and wide-leg styles and will retail for between $189 and $200. Product is slated to hit store shelves before Thanksgiving. Verhoeven is also in discussions with several other department stores, which he declined to identify, who are interested in carrying the line.There is reason to believe the brand will be a strong performer in a new retail environment. The company's men's line started selling in Neiman Marcus, Saks and Bloomingdale's this fall, and Verhoeven said sell-through rates have been in the high teens. However, boutiques and department stores alike have felt the pinch of an increasingly tepid denim market.
"Brands are being switched out and [department stores] are trying to revive their floors, but Saks said their denim business is really strong right now," he said. "They're just fine-tuning it....They have to consistently do that no matter what the market is if they want to be one of the denim leaders."
Boutiques are facing the greater challenge at the moment, according to Verhoeven. The extended warm weather across the country has done little to spur denim sales and a slowdown in consumer spending across the board has had a greater impact on the bottom line for smaller specialty stores. Despite the troubles, Verhoeven isn't looking to move away from the specialty channel and is adamant that Brown Label retain its identity on the department store floor.
"We're still fashion, we're boutique, and the fit is great," he said. "[Department stores] are looking for something different and not just the simple product, which they're probably overloaded with. Again, it's early in our whole experience with department stores, but we're not looking to change anything right now."
Verhoeven believes the business is on pace to generate $5 million in wholesale sales this year and believes the added department store and European business could push that number to $7 million in 2008.
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