Lee’s Euro Import

Sometimes, American brands find their best ideas when they leave home.

The 92-year-old Lee brand, a pioneer in the jeans business, next week will unveil in the U.S. a high-end jeans line called Lee Authentics that was developed by its European arm. For fall, the line will be sold solely at Urban Outfitters.

Kent Pech, vice president of consumer marketing at Lee, said the company had been planning to launch a premium-priced collection in the U.S. in 2004, but pushed up its timetable after being approached by executives from the Philadelphia-based chain.

Laura O’Connor, general merchandise manager for Urban Outfitters, explained, “The Lee Authentics line is really very, very interesting and incredibly popular in Europe. We had scouted a lot of people wearing the products, particularly the women’s wear, so we contacted the Lee Co. to find out what the distribution was and found the brand wasn’t available in the U.S.”

The line includes five styles of women’s jeans and an equal number of men’s styles, which will carry suggested retail prices of $70 to $165. Lee executives refused to disclose wholesale prices, but given the standard markups of the premium denim category, it’s likely the jeans will wholesale for around $30 to around $75.

The styles feature Lee’s original branded leather back tag and S-curved pocket stitching.

In addition to being priced higher than Merriam, Kan.-based Lee’s core jeans, which retail for about $30 to $40, Pech said the styles are younger and tighter, with more intricate washes and finishes than the rest of the brand’s U.S. product assortment.

For the initial season, Lee will be importing jeans produced in factories owned by parent company VF Corp. in Poland and Turkey. Pech explained that Lee and Urban Outfitters only began discussing the launch in April, which didn’t leave enough time for other sourcing options.

For next fall, the company plans a broader launch of the brand at better specialty stores, with products developed by U.S. designers in conjunction with the brand’s European arm. Those products will likely be sourced elsewhere.“We’ll evolve this as we go into 2004,” Pech said.

Lee executives said the initial shipment of Lee Authentics would be sold in about 15 of Urban Outfitters’ 54 U.S. locations. O’Connor did not dispute those numbers.

Harton said the initial season’s distribution was limited by logistics. “It’s as much product as we could do [by importing from Europe],” he explained.

Lee officials acknowledged the irony of a brand that appeals to European customers because of its U.S. heritage drawing fashion influence from its foreign operations. Levi Strauss & Co. has had similar experiences — its Engineered Jeans and Type One styles were first developed by its European arm.

“It’s funny that it’s gone both ways,” said Kathy Collins, vice president of marketing at Lee. “The original appeal of Lee is that it’s an authentic American brand. For the young consumers to see it in a store like Urban Outfitters is a good thing.”

— Scott Malone

Glo Branches Out

Gloria Vanderbilt’s junior line, Glo, plans to reach out to plus-size consumers this spring.

The company is launching a line of sizes 14 to 24 jeanswear and sportswear, which will take its design inspiration from the two-year-old junior line. Jack Gross, president of the brand, which is owned by Jones Apparel Group, said he believes most retailers will hang the line in misses’ departments.

“Some stores are hanging the larger sizes within its junior departments,” he said. “But most are finding that it works better with misses’ since that is where these girls are already shopping.”

In addition to the large-size move, Glo is also scaling things down, rolling out a girls’ line in children’s sizes 7 to 16, which also will follow the styling of the main line.

“The girls’ line will carry the same label and a similar feeling that the junior line has. We are really looking to make this the fashion denim brand for girls as well as juniors,” Jennifer Stein, head designer of the Glo division said, adding that some of the differences in the lines will be more bright colors to capture the attention of a younger girl as well as treatments such as colorful floral embroidery on the jeans.“We want the line to feel junior since that younger girl always wants to be older,” added Gross. “It’s sort of a mini Glo.”

As an added bonus, each item on the girls’ line will come with a lip gloss hanging from a belt loop. Gross said he expects to reach $15 million at wholesale with the new girls’ brand.

To promote the two launches, the company is planning an advertising campaign, which will break in December issues of junior publications such as Seventeen, Teen People and Cosmo Girl. The advertising campaign will also be seen on billboards, bus stops and shopping malls.

The ad images feature Glo Jeans’ spring 2004 collection and were produced using product photography superimposed over translucent, magnified images of psychedelia-inspired flowers and butterflies. The product photography was shot at New York’s Bath House Studios by photographer Peter Gehrke.

— Julee Greenberg

Blue Cult Branches Out

For some hipsters, loyalty to flattering jeans borders on religion — a devotion understood by Blue Cult, which is branching out for more followers. The Los Angeles-based denim label, started three years ago by jeans veteran David Mechaly and his wife, Caroline Athias, has begun distribution in Japan through a partnership with Ipgi and in 10 countries in Europe, including France, England, Italy and Spain. Michel Faraut, Mechaly’s friend and business partner, will oversee European distribution as president of Blue Cult Europe at headquarters in Geneva.

“This isn’t an easy business, and new players come along all the time, but they create buzz and last six months,” Athias said. “The ones who last, [who] grow steadily and consistently, make jeans that fit well and feel good.”

Along with seeking new sales opportunities, Athias thinks it’s time to brand the line more definitively.

“We’re the denim company that is a secret and we think if you advertise, you’re ready for the mass market, but what’s been missing for us is a stronger connection with the consumer,” she said. The franchise is built on the company’s “butt lifter” jeans, which have strategically placed rear darts, higher-than-typical pockets and no back yoke.While she’s not ready to advertise the brand, Athias said Blue Cult is developing a more coherent message for its promotional materials sent to retailers and distributed at trade shows. An in-house campaign has developed images featuring rear half-body shots, with slogans like “Do these jeans make my butt look famous?”

The line, which has evolved from embellished, studded looks to cleaner silhouettes and darker washes for fall and holiday, has amassed a wholesale account list of 500 stores, including Barneys New York, Neiman Marcus, Bloomingdale’s, Ron Herman/Fred Segal on Melrose and Lisa Kline in Los Angeles.

“It’s one of our number one lines,” said Lisa Kline. “The jeans fit every body, whereas most denim labels don’t.”

Athias said the brand has grown its distribution selectively: “We get offers all the time, but if we receive an order that’s not good for our image, we can see the money it will bring in and it’s hard to turn down, but we do.”

Sales at Blue Cult have risen dramatically since it launched in 2000. They grew to $2.5 million in 2001, $10 million in 2002 and are on pace to hit $25 million this year. The momentum should continue next year with the help of overseas sales, the launch of Blue Cult’s eight-piece men’s line at the Project Show in New York and the debut of knit tops for spring 2004, Athias said.

The company’s wholesale prices run from $59 to $62 for jeans, though the brand expects to raise them about 22 percent for spring, because the line will include more details, such as busted seams and screen-printed pockets.

Blue Cult’s founder’s longevity in the fashion jeans business has allowed him an unusual accomplishment. Mac Keen, a skintight line Mechaly launched in 1970, appeared on the stars of the original “Charlie’s Angels” TV show. Blue Cult jeans appeared in the recent movie sequel, “Charlie’s Angels: Full Throttle.”

“The product has changed…but not the spirit,” said Mechaly “Women still like jeans that fit and want to wear what they see on the stars.”— Nola Sarkisian-Miller

Isaacs Income Soars

Tumbling costs more than offset sluggish sales to let I.C. Isaacs & Co. nearly double its second-quarter profits.

For the three months ended June 30, the New York-based maker of Marithé & François Girbaud jeans and sportswear said net income shot up 93.8 percent to $471,000, or 4 cents a diluted share. By comparison, last year the company recorded earnings of $243,000, or 3 cents.

Sales for the period, which consisted exclusively of the Girbaud brand, dipped 4.5 percent to $16.2 million from $17 million a year ago.

“The company continued to make progress in its ongoing efforts in reducing operating expenses,” said chairman Staffan Ahrenberg in a statement. “The Girbaud brand continues to be well received in the market and the company is proceeding with its plan to become more efficient in delivering its product to the marketplace.”

The strong bottom-line results rested on an 850 basis-point plunge in total operating costs to 31 percent of sales, or $5 million, from 39.5 percent, or $6.7 million, in the year-ago quarter. The greatest efficiencies were realized in the firm’s largest expense segment, as selling costs fell 498 basis points to 14.1 percent of sales from 19 percent last year.

— Dan Burrows

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