Contemporary Connection

Whether it’s to capture a new customer or experiment with new fits and washes, contemporary designers are seeing the denim category as an opportunity for expansion.

Known for her frilly, girly dresses for more than 40 years, Betsey Johnson has taken her first step into casual sportswear with Betseyville, a denim-heavy line, ready for fall retailing.

“This is the type of clothing that people are wearing these days,” Johnson said. “My dress business is established and has become very occasion based, so it was time to do something a little different.”

Before the launch of Betseyville, Johnson tested a small selection of the line in some of the company’s freestanding stores. The result of the testing was overwhelming, said Catherine Nation, executive vice president of retail and marketing at the company.

“We had so much success when we tested the denim in our stores,” Nation said. “What we learned from this was that our customer wants more product from us. With Betseyville, we can offer her more.”

The company expects to reach between $5 million and $7 million in sales after the first year at retail.

At Alvin Valley, which launched Valley Jeans this year, the reasoning for the launch was slightly different. While Johnson launched the line to step into a new market, Valley wanted to capitalize on the fit of the pants in his designer line. After selling more pants in the stores than anything else in the collection, Valley decided to translate the fits into denim.

“The Valley Jeans line helps us to capitalize on our reputation for the best-fitting pants,” said Richard Rosenthal, chief financial officer. “It also helps to support the overall operation. Most design houses don’t make money on the higher-end pieces.”

Rosenthal expects the Valley Jeans label to boost cash flow just as jeans collections have helped drive the bottom lines of major designers, because the jeans lines are a bit more accessible for the consumer. While the trousers on the Alvin Valley line retail between $200 and $300, the jeans are priced at $152 to $175.

“It is a lower price point than the high-end line,” but higher than some other popular jeans lines, Rosenthal said. “So they are still paying more for the jeans, but are getting the designer name out of it. But the real motivation for this line is the economics of it. It has become necessary for young designers to launch line extensions in order to subsidize the core.”While the Valley Jeans line has just begun rolling out to high-end specialty retailers across the country, Rosenthal said he expects it to reach $6 million in sales by the end of its first year. He said the Valley Jeans line should be available in about 500 doors, while the high-end Alvin Valley line is in 200.

For Walter Baker, president of contemporary sportswear lines View Collection and Walter, introducing an array of denim pieces within the lines have paid off.

“Denim continues to be a big piece of the puzzle,” Baker said. “I thought it was going to slow down, but it has stayed pretty steady.”

Baker said that the denim pieces he has introduced in both collections have been a big contribution to the $25 million company over the past year.

“The appeal of denim in this market has increased,” he said. “These customers are hip and young and they want to find fashionable clothes. Denim is such a big part of that and it’s so much more versatile than it once was.”

That’s why Sergio Valente has switched gears. The company, which made its comeback in recent years, has become known quite well in the urban fashion world. Now that it has gained hold of that customer, it hopes to draw in the contemporary crowd with a refocused line.

“This customer is looking for the next big thing in fashion,” said Kristen Peterson, vice president of sales. “So we feel we can offer that through new, innovative fabrics and washes.”

Peterson said the company still will offer the jeans most popular in the urban market, but to meet contemporary standards, a larger array of washes will be offered in the collection.

“For the designer, Helene Charbonneau, washes are her specialty and she really wants to experiment with them,” Peterson said. “That’s not really happening in the urban market. They are more price sensitive and the contemporary customer will pay for the newest trend.”

—Julee Greenberg

Levi’s Countersues

Levi Strauss & Co. filed a countersuit in San Francisco last week against two former employees in its tax department who in April had sued the jeansmaker, charging it with wrongful termination. The company also asked that the suit be dismissed.In the April suit, also filed in California Superior Court in San Francisco, Robert Schmidt and Thomas Walsh claimed the company had fired them for refusing to keep financial records from tax authorities and auditors, as reported.

In its May 22 filings with the court, Levi’s denied the allegations, sued the pair for charges including breach of contract and asked the court to dismiss the initial suit. It said its tax practices in the U.S. and abroad were entirely legal.

The company claimed in its filings that the pair had “engaged in conspiracy to convert company records and property, violated their confidentiality agreements with [Levi’s] and made false, misleading and defamatory statements about [Levi’s] for the purpose of inflicting economic and reputational damage on the company and its officers and directors.”

In its response to the suit, Levi’s raised 44 defenses, including an assertion that it had “good cause” for terminating Schmidt, a tax attorney, and Walsh, an accountant. Its response asked that the initial action be dismissed and that the judge award Levi’s its costs of legal defense.

In its countersuit, Levi’s charged that Schmidt, Walsh and 10 other unnamed defendants wrongfully took Levi’s confidential documents that the company valued at $10 million and were using them to buttress their case and damage Levi’s reputation. In addition to unspecified monetary damages, the suit also seeks an order that the pair return any confidential information they took upon leaving the company.

A third, procedural filing, asked the court to declare the case “complex civil litigation,” which is handled differently from simple suits by the court.

Schmidt and Walsh were dismissed by Levi’s late last year. Their attorney, Frank Bondonno, of the San Jose, Calif.-based firm Popelka & Allard, did not respond to requests for comment.

— Scott Malone

Armani Parties On

To promote its summer “Beachdance” compilation CD, as well as its fashions, A|X Armani Exchange is joining forces with Stuff magazine for a series of summer parties in four key markets, starting this week. The events will feature performances from some of the artists whose music is on the CD, including Tom Findlay of Groove Armada, Ben Watt of Lazy Dog, Miguel Migs, Aquanote and Lisa Shaw.The company plans to host events in San Francisco on May 31, Los Angeles on June 5, Chicago on June 14 and New York on June 18. All the events will run from 7-10 p.m.

— S.M.

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