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Building the Franchise: With Help From Saks, Designer Nancy Heller Ups Her Stake in the Southeast

ATLANTA -- Nancy Heller must have nine lives. Although she closed her 22-year-old sportswear company in 1992, she immediately signed an agreement with Saks Fifth Avenue to open in-store boutiques and freestanding franchise stores. So far, the business...

ATLANTA — Nancy Heller must have nine lives. Although she closed her 22-year-old sportswear company in 1992, she immediately signed an agreement with Saks Fifth Avenue to open in-store boutiques and freestanding franchise stores. So far, the business is thriving.

The decision to close the sportswear line was difficult, especially since Heller had watched it grow until it hit $34 million in sales. “Because of the economy, things were becoming more difficult,” said Heller. “Stores were going out of business, reorders were becoming smaller. It was a matter of go out of business or change.”

That change materialized in the Saks agreement, which allowed Heller to cut expenses dramatically. By selling directly from the factory to Saks, prices are down 30 to 40 percent from the wholesale line. As a result, Heller notes, “I’ve gone from a staff of 85 to eight and we don’t have to pay warehousing, security or computer costs.”

As of now, there are 28 boutiques and 10 Nancy Heller for Saks Fifth Avenue stores, including the location just opened at Phipps Plaza here. The March opening of a Charleston, S.C., location will bring the store total to 11, and the Southeast total to four. Two Florida outposts, in Miami and Naples, average 2,000 square feet, with annual sales typically between $1 million and $1.5 million. Sales for the Atlanta store are projected at $1 million for 1994.

“The Sunbelt is a natural choice, because the region had a strong identification with the Nancy Heller wholesale line,” said Joseph Moore, senior vice president, specialty stores, Saks Fifth Avenue. “And the Southeast customer seems to like the more casual feeling offered by a California-based designer.”

“I’ve always had a very casual, nonconstructed approach,” said Heller, speaking by phone from Los Angeles. “I design clothes for hanging around the house, but also for the working woman. Some of our better cashmere works for black tie events.” She currently does six collections a year, with goods rotated in the stores each month. “We can carry the entire line in the freestanding stores,” said Moore. “The in-store shops have the same atmosphere on a smaller scale, with about half of the total line represented.” Both concepts feature light wood and stainless steel fixtures, with merchandise both folded and hung on racks.

Retail prices start at $60 for a T-shirt and go up to $300 for a cashmere sweater, with the bulk of merchandise between $100 and $300. Separates include easy silhouettes, such as pull-on pants and tunic sweaters, in linen, silk, cotton and cashmere. A best-selling item in Atlanta has been silk and linen-blend drawstring pants, which sold 20 of 30 units over a three-week period. For summer, the collection includes stretch terry cloth, pinstripe shirting in shirts and pajama pants, as well as ethnic prints that go forward into transition.

“One of my goals is to have buy-now-wear-now goods in the stores,” said Heller. “We want to carry clothes closer to season.”

That’s not Heller’s only goal, however. Next up is an accessory line, hopefully for fall 1994, that will include scarves, belts, handbags, hats and jewelry, priced from $75 to $300 retail. They’re expected to add another 20 percent to the designer’s bottom line.