Denim Dish: Tommy Trades Up…Mavi On the Move…Planning a Comeback…
Tommy Jeans is moving to higher ground.The junior jeans line this week unveiled its new revamped look, which is due to start shipping in June. But the biggest change at the Tommy Hilfiger Corp. unit is its new pricing strategy that raises the lowest...
Tommy Jeans is moving to higher ground.The junior jeans line this week unveiled its new revamped look, which is due to start shipping in June. But the biggest change at the Tommy Hilfiger Corp. unit is its new pricing strategy that raises the lowest and highest prices by $10.
“We’re using a good, better, best approach,” said executive vice president Leslie Singer, explaining that those terms corresponded to $49, $59 and $69 retail price points. Previously, the jeans had retailed for $39 to $59.
“There is a feeling that there is an opportunity to upgrade, to offer better fabrics and more detailing,” she said.
The jeans also include new brand insignia details, like a “T” subtly stitched into a line that flows across the rear pockets. Most styles are made of 11-oz. denim, primarily stretch fabric, and the top-priced looks feature details such as 3-D whiskers and heavier leather brand tags.
Singer, who joined the company in December, said she believes the subtle logo effect provided by the stitching will play well with shoppers.
“A good sign is that we have cropped jeans out with the Tommy signature on it…that is doing very well,” she said.
Christa Michalaros, president of women’s wear, said in an interview Wednesday at the company’s New York showroom that the upgrade played into a growing realization among retailers that raising average ticket prices — and commanding a fatter margin — might be a better way of driving profits than focusing too intently on markdowns.
“They’re looking to upgrade and raise their average prices,” she said.
She noted that with solid sales through the last month —?a time when new spring merchandise was hitting retail floors and when most holiday clearance was complete — “they’re seeing that regular-price sales are possible.”
The suggested retail prices are based on a 2.2 multiplier markup; wholesale prices average from the mid-$20 to mid-$30 range. Michalaros said the brand will continue to target Tommy Jeans’ existing retail distribution, which includes more than 1,300 department stores and specialty stores around the country. Executives declined to provide sales projections.For the nine months ended Dec. 31, the full corporation reported net income of $105.3 million on sales of $1.37 billion.
Beyond the changes in price point, Michalaros said the unit has changed the way it operates.
“We used to work on a better women’s wear calendar; now we’re operating as a true junior brand,” she said, explaining that the line will now go to market six times a year rather than four times.
That means only selling two months at a time, which gives designers more time to react to fashion trends and allows buyers to make decisions that more closely reflect recent sales performance. She said the change in calendar required many shifts through the company.
“It was a significant partnership with the production team and the distribution center,” she said.
Much of the jeans line is now produced in the Western Hemisphere, which allows quicker deliveries than Asia. But to keep up with the shorter cycles, she added, “We’ll air goods more. We feel that works for us,” as opposed to shipping by sea, which is typically cheaper but much slower.
The line also includes knit tops and some leather pieces. Even with the higher prices, the jeans are still occupying market territory well below the rarefied $100-and-up market that has attracted much attention with contemporary shoppers.
In early previews with retailers, Singer said one item that has met with strong response has been cuffed jeans with skinny legs.
“I’m starting to see girls just turning up the cuffs,” she said, adding that she thought that look had a chance to become a major trend.
In a market where vendors have been looking for a major but accessible new trend since the low-rise look took off in 2000, Singer said the cuffed look might be the next big thing.
“She doesn’t have it in her closet,” Singer said of the consumer, “so she’s going to have to buy it.”
— Scott Malone
Mavi On the Move
Since its launch in Turkey in 1991, Mavi planned to expand globally. Now, the plans are in full gear as the company celebrates the opening of two German flagships in Frankfurt and Berlin and plans for an opening in Montreal in the spring.“In the course of Mavi’s international growth we felt it was the right time to open flagships to support some of our top markets,” said Ersin Akarlilar, global chief executive officer of Mavi.
The 1,830-square-foot bi-level Frankfurt Mavi store is located near the city’s stock exchange, at Schillerstrasse 3. Mavi found the city attractive for a store opening because of its blending of traditional and modern styles. Frankfurt houses more than 40,000 university students, as well as numerous bistros, shops and theaters, which are also draws for the jeans company.
Mavi Berlin is a 3,014-square-foot bi-level store at Neue Schönhauserstrasse 3-5. The sublevel of the Mavi store will be used as a gallery space for local and student artists, which follows the example set by the Mavi flagship in Manhattan. The gallery incorporates art, fashion and interaction to encourage people to visit the store for a more-than-shopping experience.
Montreal is Mavi’s second-largest market in Canada, next to Vancouver, where a freestanding store already exists. The new 3,300-square-foot store will be located at 1241 St. Catherine Ouest, a street that attracts young Canadians.
Modeled after the Manhattan and Vancouver flagships, the Berlin, Frankfurt and Montreal stores are constructed with natural elements in mind. From fixtures to materials, the accents reflect the attention to detail and craftsmanship, as well as the use of natural, raw and high-quality materials that are important to the brand. The three new stores will carry the full Mavi collection, which has expanded to include a full line of sportswear, as well as men’s and women’s accessories.
The opening of these three stores bring the company’s total to 90. Mavi runs 85 stores in Turkey, one in Manhattan, one in Vancouver and now two in Germany and one in Montreal.
— Julee Greenberg
Planning a Comeback
Scott Morrison has left Paper Denim & Cloth, but that doesn’t mean he is finished with jeans.
Morrison said in an interview that he had stepped down as vice president of marketing and sales at the brand as a result of a disagreement over its future. Dick Gilbert, president of Mudd Inc., which owns Paper, named his son Chris to head the brand as chief operating officer.“This is really a sad day for me, but there were a lot of issues which led to this,” Morrison said. “Dick has been fantastic, it was just the right time.”
Head of sales Lori Jacobs and director of public relations Eleanor Lembo exited concurrently with Morrison.
Morrison said the trio is planning to create a new high-end jeans line. He plans to spend the next several weeks setting up a design studio for the new collection and moving quickly into the manufacturing and sale of the line.
In addition to the younger Gilbert, Paper is now operated by Ken Girouard — a veteran of Cone Mills and Gap — who takes on the role of creative director, and Bob Murphy, who is overseeing wash development and research.
Morrison had held his position at Paper since its founding in 2000.
The Gilberts also described Morrison’s exit as related to disagreements over the future of the line.
With wholesale prices ranging from $60 to $72 and 2003 volume of around $36 million, Paper occupies the narrow but highly visible market segment of premium jeans targeting hip shoppers.
It’s a segment where consumers are constantly looking for fresh new brands, and as a result, dozens of companies have squeezed into the business in recent years.
“It was a good time to depart. I wish nothing but the best for the company,” Morrison said. “I’m particularly proud of the fall 2004 collection. Of course, I’m looking forward to working with Lori and Eleanor. We have a lot to do.”
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