By  on February 13, 2008

Anchor Blue is collaborating with Heidi Montag, a star of MTV's reality series "The Hills,'' on a new apparel line and ad campaign to help redefine the retail chain.

The goal is to appeal to a slightly older 16-to-21 age demographic to capture young consumers who have more control of their purchasing power and are at an age to make more fashion-forward wardrobe choices.

"The marketing challenge was that the brand had really lost its luster; it's critical to the business to reestablish the brand," said chief marketing officer James Shimizu, who joined the Ontario, Calif.-based company five months after chief executive officer Terry Sands took the helm in January 2007. "Demographically, we were a little younger before — more 14 to 18 — and that reflected in the merchandise mix and ads. We want to be more of a 16- to 21-year-old brand now, and those few years of difference are like different planets."

Montag's Heidiwood line of junior apparel and accessories, which will make its debut for spring, ranges from $10 to $60 and consists of striped dresses, colorful tank tops, signature T-shirts, black shorts, white jean shirts and some bags and jewelry.

Montag, who attended Los Angeles' Fashion Institute of Design & Merchandising but left before obtaining a degree, said that collaborating on the line was a "learning experience."

"It was different than when I was in school because now I have a whole team to work with and bounce things off," she said.

The print, catalogue and online ad campaign featuring Montag will begin April 1 and her line will be in stores by April 15. She also will produce two more collections for Anchor Blue — the fall Heidiwood line will focus on items such as sweaters and jackets in more subdued hues.

So what makes Montag's line different from the other celebrity-driven apparel on the racks?

"I don't think anybody else has their line in a store chain like this," Montag said. "It's a good platform to launch.''

Founded in the mid-Seventies as Miller's Outpost, Anchor Blue Retail Group Inc. was bought in 2004 by Sun Capital Partners Inc., a private equity group that specializes in turning around struggling retailers. Miller's Outpost was renamed Anchor Blue in 2000 as it sought a foothold in the teen market. The initial brand re-positioning in the late Nineties moved the brand from Baby Boomers to the teen market.Anchor Blue operates 252 retail locations in 31 states and Puerto Rico. About 180 of the locations are Anchor Blue stores mostly in a dozen states, including California, Arizona, Texas and Florida, with others operated as Levi's/Dockers Outlets.

The company is spending significantly more on the reinvention — particularly the ad campaign — than it has in the past, largely on direct-mail efforts, though Shimizu wouldn't disclose specifics. "We have to do something irreverent enough that they care, but won't make fun of it," he said of the ads.

Even with a hefty marketing spend, there are challenges in the competitive junior market.

"The customer we target is pretty fickle — we need to grab their attention and keep it," Shimizu acknowledged.

Other players in the junior activewear market are devising similar tactics. Iconix Brand Group Inc.'s Bongo, for example, is using reality stars such as Nicole Richie and Kim Kardashian.

Despite macroeconomic uncertainty, Anchor Blue is hoping parents who help support their 16- to 21-year-olds won't cut back too much.

"It's going to be a much harder fight if there are fewer customer dollars," Shimizu said. "Everyone is vying for that and we want to make sure we are in there. But there are a lot of chain retailers around that need to reinvent themselves right now, so we have a great window to reestablish our brand."

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