UPDATING OLD-TIMERS: NEW PRODUCT IS KEY

Byline: Amanda Meadus

NEW YORK--In the accessories business, some old names are getting new leases on life.
In the last 2 1/2 months, two brands with long histories and once-prominent standings, Ciro and Vera, have been taken over by new management. Other firms have undertaken similar missions over the last several years, rebuilding long-established names and bringing them up to speed with the current market.
Companies that have been working to rejuvenate these brands are convinced the opportunities are as ripe as ever, even if the luster may have worn off the name. The key element, they say, is to update the product first, then develop the market. In other words, cook the steak and then sell the sizzle.
"Yes, the Ciro name did get a little tarnished by what had happened under its previous management, but in no way was its reputation completely destroyed," said Nat Hyman, president and chief executive officer of The Hyman Cos., Allentown, Pa., a fashion jewelry retailer with 72 N. Landau Hyman and Landau Collection stores in malls around the country.
As reported, The Hyman Cos. took on the license for the Ciro name in June, following the Ciro operation liquidation in January. Investment firm Merchants T & F Inc. purchased most of Ciro's assets and subsequently put the name out for license. Last fall, four former senior executives of Ciro were charged by the Securities & Exchange Commission with fraud and falsifying annual and quarterly reports to hide the company's collapsing finances.
At the time of the acquisition, Ciro was posting annual sales of about $40 million.
Hyman noted that despite this somewhat troubled recent history, his firm has been going full speed ahead developing the Ciro name. There are plans to open five new Ciro stores within the next year and convert several Hyman stores into Ciro locations.
"There have been one or two cases where we wanted to convert one of our N. Landau Hyman stores into a Ciro store and couldn't because the landlords in question felt the Ciro name had been damaged," Hyman noted.
However, he said he expects a mostly positive reception due to the reputation of the Ciro name.
"Throughout most of its history, Ciro had great products and reasonable prices, and that's the perception we intend to return to," Hyman said. "The company has been around since the Twenties, and it still has a lot of cachet. Most people still associate it with elegance and high quality. "The previous management neglected these aspects to some extent and were more focused on finances than operations," Hyman pointed out. "But we already have this quality orientation in the stores we run, so we don't see any problems in delivering it with the Ciro brand."
He added that ultimately his firm plans to open several hundred Ciro locations in the U.S. and abroad. He said his company will start developing the wholesale side of the Ciro business soon.
"One thing we absolutely do know is that consumers are far too savvy now to just buy a product based on the name," Hyman said. "I think this was a mistake that the previous management at Ciro ran into."
Honey Fashions took on the Vera brand name in May via a licensing deal, because "we found that the name was still extremely viable with consumers," said company president Michael Klein.
As reported, in March the Salant Corp. discontinued the Vera Scarf division and put the name out for licensing. As part of the licensing agreement, Honey Fashions has the option to purchase the name. At the time Honey Fashions entered the agreement, chief executive officer Norman Elowitz projected wholesale volume of $16 million to $20 million for the first year of the "new" Honey line. In 1994, Salant did $5 million in sales in its Vera division.
Klein said the key to reviving the business would be harnessing the name's widespread recognition to a product line that is more focused than it had been in recent years.
"Vera Neumann, the founder and creator of the Vera line, took a high-visibility approach from the time she started the business 50 years ago," he pointed out. "She did textiles and home products as well, so that broadened the exposure even more, and the company also did a lot of advertising.
"What we're concentrating on is returning to Vera Neumann's original product strategy, which was to show a very focused and tight new collection at every market," Klein added. The first Vera for the Honey Collection group will make its debut this week for the August market and will be called "Vera's Garden."
Other companies that have set about rejuvenating longstanding brands have taken a similar approach, focusing on the merchandise and then basing the marketing on it.
"The accessories business is totally product-driven now and if you aren't giving retailers the merchandise they want, it doesn't matter how good the name is," said Frank Fialkoff, president of Haskell Jewels Ltd., which produces the 70-year-old Miriam Haskell jewelry brand.
Fialkoff, who purchased the firm in 1990, said he has been working since then to preserve the integrity of the brand and yet keep it current.
"Every piece of jewelry is still made by hand, as it's always been, and still has the very vintage, delicate look that Miriam Haskell, the company's founder, created," he said. "But we do not ignore what's happening in the market, either. If small earrings are what's in demand, then we're going to do our own version of small earrings."
Eyewear giant Ray-Ban, which is almost 60 years old, found itself in a jam about two years ago because it had failed to freshen its product line, said Norman Salick, vice president of marketing for the eyewear division of Bausch & Lomb, which makes and markets Ray-Ban.
"We've learned that new products are absolutely crucial in maintaining the business of an established brand," Salick said. "We lost sight of that a little while ago and got our heads handed to us."
The company's bestselling styles are and always have been the Wayfarer, which was introduced in 1952, and the Aviator, which came out in 1937.
"Many people still think those are the only styles we produce, and that really started to hurt us badly," Salick said. "So, for the last year, we have been flooding the market with new merchandise groups, and this strategy has been working remarkably well. We've literally turned our entire business around."
All the company's new advertising features the new styles, Salick noted. The Wayfarers and Aviators, while still the classic backbones of the company's business, won't be showing up in ads anytime soon.
Etienne Aigner, the accessories and footwear brand, is getting a similar shot in the arm with a one-two combination of revitalized merchandise and new advertising.
"Etienne Aigner has been around since the Fifties and, over the course of time, became perhaps a little staid and dull," said Robert Chavez, chief executive officer of the firm, which was purchased by the Hartstone Group in 1992. The name in accessories is known particularly for its handbags and small leather goods. Last year, the company did about $115 million wholesale volume in footwear and accessories.
"We've tried to reposition by attracting new customers with the types of looks not necessarily associated with Etienne Aigner," Chavez said. "As a result, we've introduced some very contemporary pieces, some of which are shown in the new advertising campaign we've done this year. "But we've also kept some of the basic, core items the line has always offered, and we have even gone back into the archives and resurrected some items from the past," he noted.
Timex, which has been around for more than 100 years, is an example of a firm that has become an old hand at reinventing itself.
"As far as product goes, the idea is to update, restyle and refresh as often as possible, even if it's in a subtle way," said Suzy Watson, spokeswoman for the company.

To Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus