High-End Brands See Room to Grow

NEW YORK — There’s still a core group of denim devotees who don’t shy away from spending $150 on a pair of jeans.<br><br>At least, that’s what some denim makers are saying. While the country is still struggling to pull through...

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NEW YORK — There’s still a core group of denim devotees who don’t shy away from spending $150 on a pair of jeans.

This story first appeared in the December 19, 2002 issue of WWD.  Subscribe Today.

At least, that’s what some denim makers are saying. While the country is still struggling to pull through rough economic times — and despite some signs that the category as a whole is starting to slow after several hot years — high-end jeans vendors are not singing the blues. Their products are still selling, and they contend the reason is that women who can’t lay out the really big bucks for designer sportswear will still pay triple-digit prices for top-name jeans.

According to Marshal Cohen, co-president of NPDFashionWorld Consumer, out of the $11 billion denim industry, 3 percent of the sales in the market are for jeans over $75. While that is still a large portion of the denim market, high-end jeans makers should have some concerns going into the new year, he said.

“Their biggest challenge is how do they continue this uniqueness when there are so many inexpensive fashion jeans brands out there?” Cohen explained. “The majority of the people shopping for these jeans are teens and teen wannabes so with the high-end labels it has to become about branding, getting the name out there.”

Andrew Pollard, director of sales and marketing at the New York-based Sixty USA, said there were reasons to believe the category can hold up.

“We are lucky in times like these because we are getting that kickback customer from the designer market,” he said. “If they have to cut back spending on the more expensive labels, they see value in a $150 pair of jeans. To them, that isn’t expensive.”

That may be the case, but according to Pollard, the secret to success in the jeans business is to make sure that jeans are not the only product a company makes. Miss Sixty offers an array of tops, jackets and accessories that work well with denim. This has worked for the brand so far and Pollard said Sixty SpA Worldwide (which includes seven labels for men, women and juniors) is expected to reach sales of $500 million by the end of the year.

“It’s imperative for longevity to not just be a denim company,” he said. “In the beginning, there were very few companies around that offered what we do. Now, there is so much competition out there, so many companies selling jeans for more than $100. So if the customer loses interest in jeans, then the company that makes only jeans will be out of business. Even though jeans are a large part of our business, that is not all we offer.”

Charles Jebara, president of Jill Stuart Jeans, agreed with Pollard. He said that while denim jeans have been the company’s main focus since the beginning, the company recently began offering items to work well with the jeans, such as printed cotton and silk chiffon tops for spring 2003. Jebara said this is a concept that works well with the Jill Stuart brand since many of the prints it uses on the tops comes from Stuart’s archives.

“Our stores started asking for more from us,” Jebara said. “They do well with the jeans, so they wanted to see a full collection. So, for spring we are offering things to go with denim.”

Jebara said he believed the Jill Stuart Jeans business will continue to expand since there is a growing demand for designer jeans.

“We are such a new business right now, so we’ve only seen increases,” he said. “But also, we are not a brand of pure luxury. Jeans for $140 are not so bad to our customer. Maybe she won’t be able to buy that new Cartier watch that she wants, but she will buy the jeans. They aren’t a big purchase.”

At the two-year-old, Los Angeles-based Seven For All Mankind, executives are maintaining a fast-growing business, as well as thinking of opportunities to offer its customers something new. According to Michael Glasser, vice president, the firm plans to launch a knitwear line to work with the jeans styles, and continue with its men’s wear line, which just began shipping to stores.

“I think that we have really created a market for this type of denim,” Glasser said. “It’s a great alternative to designer clothes and they really are not that much money.”

Seven, which has only been shipping to stores for 25 months, is now available in about 800 stores.

When it comes to fashion, Patrick Guadagno, president at IT USA, the licensee for jeans brands D&G, Just Cavalli and Gianfranco Ferré, said customers will pay the price. This is true, especially, he said, with a new pair of jeans.

“Fashion denim is driving this business,” Guadagno said. “They no longer look for what’s basic. The customers look for novelty. We are having great sell-throughs on anything embellished, especially jeans trimmed in suede and leather.”

Guadagno said IT USA hasn’t been really hurt by the tough economy. He said that while he knows the designer brands are suffering, the customer who buys a pair of D&G jeans is getting the designer name, but at the jeans price, and spending a couple hundred dollars rather than a couple thousand dollars.

“Our customer is still open to shopping and there are so many young people who dress for recognition and find that in a brand name,” he said. “Their social life dictates how they dress and do not see a problem paying $185 or $265 for a pair of fashion jeans.”

The high-end market, which was pioneered in the U.S. by Diesel and other firms in the Nineties, isn’t the sole domain of niche brands. Levi Strauss & Co., now sells its Levi’s Red and Levi’s Vintage Clothing collections to specialty retailers including Barneys New York and Sharon Segal at Fred Segal. Jeans in those lines retail for as much as $265.

A small SoHo shop, R by 45rpm, a 25-year-old Japanese company, has offered high-end jeans in its Japanese stores since it started and in April will begin a customized jeans service in its only U.S. store. Located at 169 Mercer Street, R by 45rpm has been open for two years. But after a successful run in its more than 30 Japanese shops, head designer Yasumi Inoue and chief executive Taka Hushi have decided to bring the custom trend to Manhattan. But this doesn’t come cheap. Customized denim pieces will start at $1,000 retail. Executives expect first-year volume of about $500,000 to $600,000 from the new service.

This is the company’s first venture into customization in the New York store, but it has consistently offered one-of-a-kind pieces that can retail for up to $365. Inside each garment is the personal trademark of one of the five artisans who worked on the denim.

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