WOOLRICH
OUT OF THE WOODS

Byline: Dianne M. Pogoda

WOOLRICH, Pa.--No more than a couple of years ago, Woolrich was lost in the woods, but found a compass. Now it seems to be headed in the right direction, capitalizing on its heritage of the rugged outdoors.
Leading the way is H. Varnell Moore, president and chief executive officer, who detailed his strategy in an interview at Woolrich headquarters here in the hills of north-central Pennsylvania.
Moore, who came to the 165-year-old company in July 1993, said that when he joined, he saw a company that had drifted from its roots and was producing a collections-driven line that was under enormous pressure from too-frequent deliveries.
Moore, formerly a group vice president at VF Corp. and an ex-president of Wrangler brands, said his immediate goals were to rekindle discipline in production, refocus the product line and streamline sourcing.
Al Zindel joined as executive vice president of sales in May 1994, and he and Moore embarked on a two-pronged approach to slimming the company, which now has a volume of around $200 million. Zindel was executive vice president of sales and marketing for Vans Inc., and prior to that, was president of the women's division of Jantzen Swimwear and Sportswear, also a unit of VF.
The women's share of overall business grew to 35 percent from 25 percent last year, and the executives estimate that the balance will be 50/50 by 1997.
Initial results of the editing efforts began to be seen at stores this year.
First, Woolrich eliminated about a third of the sku's as well as a line that was strictly geared to hunting and fishing. Then they balanced sourcing to take advantage of cheaper labor overseas or Quick Response domestically, depending on the needs of a particular garment.
The line devoted to hunting and fishing was called Woolrich Classics, and is an example of what Moore characterized as repetition and waste. Hunting and fishing apparel generates about 5 percent of Woolrich sales. The Classics line duplicated many numbers from the main collection--chamois shirts and buffalo plaid jackets, for example--or went overboard with particular items. Once, it offered 34 different fishing vests.
"We got rid of it because 80 percent of those items should be in a core product line," Moore said.
In its regular line, Woolrich was "doing cutesy clothes, in canned presentations earmarked for four-week deliveries," he explained. "If you misjudge what the retail customer wants for just one of those delivery periods, you're throwing up obstacles that can hurt your business. It's a great burden to fill those deliveries, and there was no product continuity from one delivery period to the next."
Moore said the fundamental change was establishing separate merchandising groups for women and men, and going back to the company's basic strategy of developing a core product line by classification around three to five themes of silhouette and coloration.
"That's how you get that khaki short or pant that keeps working for you all year long," he said. "And, you can put those products into an EDI program and just keep selling them."
He explained that under the old system, if items from a certain delivery did not sell in four weeks, they had to be closed out to make room for the new delivery. There was no staying power. Also, when a store had a hot item, it could not be reordered because of time constraints.
"In the Southern tier, for example, shorts are sold 10 months a year. Woolrich offered them for four months," he added. "Now we offer the core all year."
"Core product flows through all deliveries," said Zindel. "We had deviated from rugged outdoor to casual, where we were just another in a long line of casual sportswear resources. We felt we could be number one in rugged outerwear, so we repositioned our product to address that need."
There are about eight women's styles on Quick Response, Zindel explained. These are done totally in an EDI mode, supplying floor-ready stock and doing all invoicing electronically. The company has come up to speed in the past year or so.
"The core line is where we make our money," Zindel said. "Fashion colors and prints are developed around that to add the sizzle."
The core includes khaki, navy and earth tones in outerwear and some basic separates, but the focus remains tight on the heritage of the rugged outdoors.
"Not cutesy, not Seventh Avenue, not Liz [Claiborne]--that's not what [our consumers] want," said Moore. "They want outdoors, but with a touch of femininity, which means a softer hand, slightly lighter-weight fabric, maybe some embroidery."
For spring, Woolrich is launching a gardening theme line for women, with embroidery of garden tools or seed packets.
Moore and Zindel also addressed pricing. By cutting overhead, closing five plants in the U.S. and balancing sourcing between the U.S. and overseas, Woolrich was able to trim costs on outerwear by 15 to 20 percent, on women's bottoms by 10 to 15 percent, and on tops by about 10 percent.
"You can't be competitive in price and run plants half empty," Zindel said. "An example is our wool-lined mountain parka, one of our all-time bestsellers. We were selling a lot of these and not making any margin, yet the price kept inching up. This was a result of plants not being fully utilized. You have to be globally oriented in today's market."
By moving production offshore, the wholesale price on the parka dropped to $50 from $82.50 in one year.
By freeing up sourcing, the company was able to free up its fabric choices. Formerly, in an effort to be more efficient when operating in one plant, the company compromised and used one fabric for men's and women's product, he said. The result was that the choice was "wrong twice--unisex doesn't work in this market."
Woolrich, which is the oldest American mill and apparel maker in continuous operation, was founded in 1830 by John Rich in Plum Run, Pa. He took his line of woolen fabrics, socks and blankets to logging camps throughout the area, serving the needs of local lumbermen. The mill was expanded in 1845 and moved to the town now called Woolrich.
The company maintains domestic production on outerwear with newer, innovative fabrics and minimal labor. They have been able to achieve a five- or six-day turn on coats.
The plants are also making the outerwear closer to need. Previously, they were making coats five or six months ahead of need and, as Moore said, "Making wool coats five months early means you've made them wrong, because you don't know what size or color to produce and you've used up your raw materials. Now you have omelets and no eggs."
To address the problem of filling orders close to the need--a particular concern for fall 1995, since orders are coming in very late from all stores--the company has stocked some core product in inventory, and the other items can be put into the plants that turn in six days, Zindel explained.
The executives' next mission is to improve distribution, which is undergoing the biggest expansion.
More than half of Woolrich's distribution is to "outdoor" stores, like Galyan's and REI; about 15 percent is to sporting goods stores, like Herman's, Sports Authority and Sport Mart, and about 15 percent goes to department and specialty stores. About 5 percent is through catalog houses.
The goal is for about 35 percent department and specialty stores, 25 percent sporting goods stores and 40 percent true outdoor stores, said Moore.
The company's in-store shop concept is also an integral element in its marketing strategy. It has about 450 fully furnished in-store shops--100 of which are women's--plus about 600 minishops, with signage but no fixtures.
Volume doubles in the shop concept; sales per square foot are between $400 and $500 in a shop, against $150 to $200 when sold elsewhere in the store, said Zindel.
The shops are generally 200 or 300 square feet, furnished with armoires, shelving units and tables of refurbished barn wood. Accessories, like model canoes, lanterns or gardening tools, freshen the displays periodically.
The firm owns 18 outlet stores and three freestanding first-line stores, but it has no plans at this time to launch a direct-mail retail business.
"There are others out there that do the catalog business very well," Moore stressed, "and that's a business that you really need to decide you want to be in full time."

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