The addition of women’s sportswear in 2000 rounded out Kenneth Cole’s offerings and has bolstered its lifestyle positioning.
When Kenneth Cole Productions entered the women’s apparel arena three years ago, it marked a return home.
“We really began to build our business with women’s categories,” said president Paul Blum, who joined the firm in 1990. KCP started out in 1983 in women’s footwear and has since expanded into men’s footwear and apparel, as well as accessories.
The move into women’s apparel through a license to Liz Claiborne Inc., he said, completed the brand’s circle and strengthened the firm’s lifestyle positioning. Cole’s men’s wear licenses are held by Paul Davril Inc.
Lifestyle brands help consumers put together a whole wardrobe, said Blum, and those multiple contact points with the customer is what makes broad brand placement so important to fashion marketers. “The customer knows what to expect from the brand in different parts of their life. They know the quality will be there. They know the price will be there.”
The customer also knows what to expect on the fashion front, which, he said, is particularly important in apparel. “The women’s business especially benefits from having a brand behind it.”
KCP is developing its women’s apparel offerings through a three-pronged approach with the Kenneth Cole New York, Reaction Kenneth Cole and Unlisted labels.
Kenneth Cole is the most developed of the three brands and carries dressier offerings and prices nearing the upper end of the better range. The brand caters to customers with “a really clear sense of fashion,” as well as an “urban aesthetic,” said Blum.
Kenneth Cole-branded women’s apparel launched in fall 2000 in 200 department store doors and has since expanded to slightly more than 300 stores. Initially, the goal was to hit 500 doors with the collection in five years.
“We’re about a year off that plan,” noted Angela Ahrendts, executive vice president at Liz Claiborne. “The first year was very difficult. We started out a little too expensive and a little too career. We have been on a wonderful growth curve ever since.”The business has been planned to grow by 20 to 30 percent each year. So far this year it is beating plan by a percentage in the single digits and is up double digits against a year ago.
Reaction, which the firm is now licensing out to many of the same manufacturers that make the Kenneth Cole collections, is also urban inspired, but more casual, with lower price points, though still in the better range. Reaction is usually coupled with Kenneth Cole in stores and was launched in 2001 with the intention of eventually reaching 750 stores. It currently is in 200 department store doors.
Unlimited, which is primarily a men’s shoe business, has yet to be developed into apparel. The brand targets a younger customer with lower price-point goods.
In addition to producing the women’s offerings for Kenneth Cole and Reaction, Claiborne plans to expand Unlisted into apparel within the next three to five years. Unlike the other labels, Claiborne has the option to produce both men’s and women’s.
“Our design is really from the street,” said Blum. “It’s for the contemporary customer’s wardrobing needs and we create affordable product using that modern sensibility.
“There’s a consistent theme to the design and the aesthetic,” he continued. “It’s not overly optimistic. It’s not embellished without functionality or reason.”
KCP has taken a measured approach to expanding its women’s business. “If you sell in too much, too early before you have the right customer base built, it creates a lot of markdowns and a lot of liability,” noted Blum.
A take-it-easy attitude has given KCP an opportunity to grow its business naturally, he said. “There isn’t one category that has launched big in our company. We always launched small.”
The women’s business is still small compared with the competition and with what it could be, said Blum.
“We really want to modulate our growth over a long period of time,” he added, noting the firm overall is plotting an expansion across product categories and distribution channels. “The next 20 years are more important than the last 20 years.”Last year, KCP raked in net sales of $404.3 million and royalty revenue of $28.7 million, some of which comes from apparel. Earnings hit $26.1 million. In all, KCP products are distributed to more than 1,700 wholesale accounts for sales in more than 4,500 locations in the U.S. The firm’s own retail operations include 50 specialty and 33 outlet stores.
Over the past decade, the company’s sales have managed a compounded annual growth rate of roughly 24 percent.
Claiborne also sees good things on the horizon for the KCP women’s apparel businesses, and is putting its best foot forward to meet what is turning out to be a very competitive spring season in better.
“We love this brand today as much as we did when we did the licensing deal roughly three years ago,” said Ahrendts.
The firm’s affection is made clear by the fact that Claiborne owns all of its businesses except for Kenneth Cole and DKNY, which it also licenses.
“It targeted a younger customer with a much more modern attitude,” noted Ahrendts of the manufacturer’s attraction to the Cole brand. “Kenneth stays in his lane. He has kept his brand so pure from a product and marketing [standpoint].”
Few brands today can make such a boast, she said. When the label launched, it also filled a void in the better area of the department stores. Better has now exploded with a slew of new and revamped names vying for space in spring. Among the companies in the fray are Polo Ralph Lauren Corp., Jones Apparel Group, Tommy Hilfiger Corp. and Kellwood Co.
“We have no choice but to get this product absolutely as perfect as it could be,” said Ahrendts. “For spring 2004, we have pulled out all the stops.”
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