By  on August 12, 2009

NEW YORK — The bridge category just can’tget a break.

After seeing heavy markdowns and few profits in recent years, the market now is about to lose one of its premier names and major anchors: Ellen Tracy.

Under a new operating license with RVC Enterprises, Ellen Tracy plans to morph into a better sportswear player, taking its prices down considerably and competing with firms such as Michael Michael Kors, Lauren by Ralph Lauren, Jones New York, Calvin Klein white label, Liz Claiborne and AK Anne Klein. Sources indicated that Ellen Tracy is talking with several major retail groups, namely Macy’s, Dillard’s and Lord & Taylor, about an exclusive sportswear arrangement.

A spokesman for Macy’s said, “We’re always talking to all of our vendors about opportunities,” but declined to comment on any discussions. Liz Rodbell, executive vice president, merchandising, at Lord & Taylor, noted, “We’ve certainly let the management know we’d be interested in pursuing opportunities with them.” Dillard’s declined to comment.

William Sweedler, co-chairman and chief executive officer of Brand Matter LLC, parent company of Ellen Tracy, declined to comment on the brand’s plans. But, he admitted, “We are in the process of evaluating a better line.”

Ellen Tracy’s licensees, in areas such as footwear, coats and suits, are already positioned in the better category, and an exclusive sportswear deal with a major retailer wouldn’t impact those licensed businesses with other retailers, said sources.

The company’s plan to exit the bridge floor has put major real estate in limbo at key accounts such as Bloomingdale’s, Saks Fifth Avenue, Neiman Marcus, Nordstrom, Dillard’s and Lord & Taylor — and is a further blow to a brand that was once the undisputed leader of the category, with sales of more than $170 million at wholesale at its peak. It also represents yet another hiccup in retailers’ attempts to reinvigorate the bridge market — which have included calling it anything but bridge.

Yet for labels such as Eileen Fisher, Lafayette 148, Elie Tahari and even Tory Burch, the departure of Ellen Tracy could present a significant opportunity to further increase their market share.

Ellen Tracy, which has a following among Baby Boomers for its versatile separates, has been an anchor brand on the bridge floor for decades, and its departure next spring will require not only a shifting of real estate, but also the addition of some new resources to fill the gap. The company’s problems with retailers have been further compounded by the fact that its fall deliveries were about four weeks late as it transitioned from one operator — Fashionology — to another — RVC. Fashionology, which had manufactured Ellen Tracy’s bridge line, is being wound down and liquidated. Sources said there were several million dollars worth of unpaid bills to Chinese suppliers, part of which stemmed from a dispute over the quality of the merchandise with one company, which refused to take it back or reduce the price. Sweedler declined to comment.

RVC has purchased Ellen Tracy’s fall inventory and, going forward, will manufacture and distribute the better sportswear line. Ellen Tracy has moved out of its corporate showroom at 1400 Broadway, let many people go, and the brand is relocating within RVC at 1384 Broadway.

After a year of bringing the Ellen Tracy brand back to life and stores seeing an uptick in sales over the past few months — with further improvements expected for fall 2009 — retailers are clearly disappointed the company plans to vacate the bridge area.

Lord & Taylor’s Rodbell said, “We certainly have had a nice run with the return of Mark [Mendelson, Ellen Tracy president] to the brand. We’re just getting the business going with Ellen Tracy and we’re disappointed with the situation.”

However, Rodbell added, “I do think the brand will have tremendous opportunity in the better zone and look forward to seeing it. The brand means so much to our customer. I think there’s a consumer interest in great product.”

She believes Ellen Tracy sportswear, positioned on the better floor, will reach customers it hasn’t served previously. Rodbell noted L&T also does business with Ellen Tracy’s better licensees, including shoes and coats. The better floor at Lord & Taylor is dominated by brands such as Lauren by Ralph Lauren, Kors by Michael Kors, Calvin Klein white label and Jones New York. Its bridge floor includes brands such as Eileen Fisher, Lafayette 148, Anne Klein and, new for fall, Elie Tahari. Rodbell sees a big opportunity for Tahari’s line, which is going into a handful of stores.

One retailer told WWD that he was disappointed Ellen Tracy was leaving the bridge floor and was planning the next few seasons without the brand, even though the store hadn’t received any definitive word.

Ellen Tracy’s decision to depart bridge departments has prompted other companies in the category to take a hard look at their own businesses. Several firms interviewed said they’re staying the course, and many have lowered price points. They feel they have a clear identity and a strong relationship with the bridge customer.

“It [Ellen Tracy] was such a dominant and big company in the bridge market. They were an anchor, and stores will have to find other people,” said designer Elie Tahari. He believes it’s tough in the bridge market, and he doesn’t feel his line has any crossover customers with Ellen Tracy. The Ellen Tracy customer “is much older; we border on contemporary,” he added.

Elie Tahari is a top vendor on the bridge floors of stores such as Saks Fifth Avenue and Bloomingdale’s, and is positioned on the contemporary floor of Bergdorf Goodman and Neiman Marcus.

Tahari believes firms such as Eileen Fisher and Lafayette 148 will take the Ellen Tracy business, as well as some new resources that are being put on the bridge floor. In fact, Saks Fifth Avenue is adding several new vendors on the bridge floor this fall, he noted.

Earlier this year, Saks set up a new department called Wear in all 53 units in an effort to instill new life into the stale bridge category. (Bloomingdale’s was first to do so four years ago, renaming its bridge floor “The New View” and rejiggering the vendor mix.)

Wear at Saks puts the focus on less distributed labels such as Lavia 18, Aquascutum and Natorious, as well as Elie Tahari, Tory Burch, Eileen Fisher, Lafayette 148, DKNY, M Missoni and the private label Clothes (real). Suits and head-to-toe dressing previously drove bridge sales, but Saks decided to focus on items and less formality, as well as color and mix and matching to create outfits using different labels.

“It’s very tough to be profitable in bridge,” said Tahari. “Between the markdown money and the amount of sales the stores run, you have to pay so much.” Tahari believes department stores need to revamp the bridge floors to bring in more traffic and more excitement and to make it more contemporary.

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