By  on October 6, 2009

Macy’s Inc. confirmed Monday that it has forged a strategic alliance with Ellen Tracy owner Brand Matter LLC and its sportswear licensee, RVC Enterprises, to become the exclusive department store retailer of Ellen Tracy better women’s sportswear, beginning in spring 2010.

A WWD report last week said the parties were close to signing an exclusive agreement.

In the deal, Macy’s will offer a complete collection of Ellen Tracy better sportswear focused on modern, related separates. The line will include jackets, shirts, pants, sweaters, woven tops, knit tops and bottoms. Jackets, for example, will retail from $99 to $149, and pants will be $50 to $99.

The better Ellen Tracy collection will be about two-thirds less expensive than what Ellen Tracy has historically been in bridge areas of department stores. For years, Ellen Tracy had been an anchor bridge resource in stores such as Nordstrom, Saks Fifth Avenue, Bloomingdale’s, Dillard’s and Lord & Taylor. Ellen Tracy’s move to the better department and an exclusive deal with Macy’s appears to be a double blow for these retailers.

Despite Ellen Tracy’s ups and downs, it had developed a following of Baby Boomers seeking quality fabrics and workmanship. In recent years, it competed head-to-head with resources such as Eileen Fisher, Lafayette 148, Elie Tahari, Anne Klein New York and Tory Burch.

The exclusive Ellen Tracy better sportswear collection will launch in more than 100 Macy’s stores and online at macy’ next March, with plans for additional stores over time. The launch will include new Ellen Tracy shops in Macy’s largest flagships — Herald Square in New York, Union Square in San Francisco, State Street in Chicago and Dadeland in Miami. Brand Matter and Macy’s are expected to work closely on new ventures and brand extensions in the future, although there are no specific plans yet.

The new Ellen Tracy better collection will now compete directly with lines such as Michael Michael Kors, Lauren by Ralph Lauren, Jones New York, Calvin Klein white label, Liz Claiborne and AK Anne Klein. But being exclusive to Macy’s gives Ellen Tracy the advantage of the retailer’s advertising and marketing clout, as well as in-store shops and premier positioning on the better floor. A Macy’s spokesman declined to give first-year projections for the line. However, sources indicated the exclusive partnership could eventually evolve into a $300 million annual business for Macy’s.

“Ellen Tracy is a legendary brand that is well-known to our customers and backed by an outstanding design team. In particular, Ellen Tracy delivers exceptional value to women who expect quality and want a relevant look for today’s work and on the town,” said Jeff Gennette, Macy’s chief merchandising officer.

Mark Mendelson, president and chief executive officer of the Ellen Tracy division of RVC, said the aim was to “bring the Ellen Tracy heritage and style to a more accessible price point.” When Mendelson came to Ellen Tracy in early 2008, he hired Susanne Klevorick as creative director and senior vice president of design. She was previously senior vice president of design at Ann Taylor, Nine West and Jones New York, and she and Mendelson have traveled as a team almost since they met nine years ago. She continues as creative director and senior vice president of design of the new Ellen Tracy operation.

Bill Sweedler, co-chairman and ceo of Brand Matter, said he believes the Ellen Tracy brand “will add significant accretive sales to the better sportswear floor.” Sweedler noted Brand Matter is a licensing and marketing company and this partnership with Macy’s and RVC complements the balance of its 18 different licenses. Besides Ellen Tracy, Brand Matter’s properties include Company Ellen Tracy, Caribbean Joe and Havana Jack Cafe.

Ellen Tracy’s 11 licensees in areas such as footwear, coats, suits and sleepwear, which are positioned in both the better and bridge categories, would still be allowed to sell to other department stores under the new arrangement, said a Macy’s Inc. spokesman.

Macy’s exclusive deal with Ellen Tracy joins the growing list of brands partnering with Macy’s such as Tommy Hilfiger, Martha Stewart, Donald Trump and Rachel Roy.

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