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NEW YORK — Kellwood Co. and Phillips-Van Heusen are teaming up to make Izod a billion-dollar baby.
PVH, a leader in men’s wear, has entered into a long-term licensing agreement with women’s apparel giant Kellwood to produce a moderate-priced women’s lifestyle collection, hitting stores in spring 2004 and targeting a modern consumer who has been largely underserved, company executives said.
“The biggest opportunity is in women’s wear,” said Mark Weber, president and chief operating officer of PVH, Izod’s parent company since it acquired the brand in February 1995 from Crystal Brands Inc. — thus eliminating the Lacoste association with Izod, as well as the little green alligator from its clothing.
“We have had the opportunity to license the brand into women’s wear and have declined offers made by a number of people,” Weber said in announcing the deal to WWD at the Izod showroom. “But we chose to wait and partner with a world-class company, one that could build a bigger brand in women’s than in men’s.”
He said the association with Kellwood, “a women’s industry giant with sales in excess of $2.3 billion and with the expertise necessary in design, sourcing and marketing to grow this brand,” is the way to achieve that goal.
With Izod’s total retail sales and licensing revenue in men’s at about $500 million, including its women’s golf line doing about $50 million, Weber speculated that the women’s line overall could meet and perhaps exceed that figure — bringing Izod sales to the $1 billion level. In addition to clothing, its licenses include men’s neckwear, belts, hosiery, pajamas, eyewear, boy’s wear and home.
Hal Upbin, chairman, chief executive officer and president of Kellwood, agreed about the line’s business potential, saying: “That’s fair, I do think it’s a billion-dollar brand and women’s should do more than men’s. There are more categories and women have bigger wardrobes. This will fit a nice niche in casual, modern lifestyle for this woman.”
Analysts have pegged Sag Harbor, Kellwood’s biggest brand, to have annual sales of $500 million to $600 million. PVH had sales of $680.6 million in the first half ended Aug. 4.
PVH is also in the process of rolling out a men’s and women’s Izod footwear line, debuting roughly the same time as the women’s apparel line, in conjunction with G.H. Bass.
Weber, along with Ken Duane, vice chairman at PVH, said they feel PVH and Kellwood make a good match and share the same common goal of building Izod women’s.
“When Mr. Upbin said ‘we’ll treat this brand as if it was ours,’ that meant more to us than anything,” Weber said. “This is a long-term opportunity and one that has to be nurtured. In our advertising, we’ve been very sportswear-oriented, very active-oriented, colorful, inspirational and fun. And we think the people at Kellwood share the same vision.”
Duane added: “Everything we have done here has to do with the product and taking Izod to the modern level because it’s a modern brand.”
Stephen Ruzow, president of women’s wear at Kellwood, said he’s confident the line will be a big success in the moderate tier.
“We identified a niche in the market almost the same time we heard about the Izod name and the niche was modern lifestyle collection. We compete in this arena with Sag Harbor and Koret, but what we saw missing was more modern, stylish clothing, yet with a missy fit,” Ruzow said. “I see competition in the better market, with brands like Lauren and Polo Jeans, but what we’re going to do is have that kind of product in better at a price. I don’t see anybody in moderate as competition.”
Targeting a consumer roughly 35- to 55 years old, Ruzow said the collection will build off the Izod heritage, while focusing on clothes that are “youthful, not young.”
“The key word is modern, as well as clean, relaxed and with a really great attitude,” he added.
Izod women’s will sit at the upper end of moderate, with prices retailing from $24.95 to $49.95, and it will be targeted at better department stores like May Co., Federated, Saks Inc., Belks, Dillard’s and regional department stores. The collection will include skirts, pants, knit tops, woven shirts, sweaters, an occasional knit dress and outerwear pieces.
“It’s a lifestyle collection,” Ruzow emphasized. “We’re not going to do Izod knit shirts, but we will have polo-type shirts and rugby-type shirts, so when that buyer and that general merchandise manager come to the showroom, they see a complete lifestyle collection. Because that’s the void we have identified in the market.”
The new Izod women’s showroom will be housed at 1411 Broadway here in a 5,000-square-foot space, separate from the men’s showroom at 200 Madison Avenue. Upbin said the company will hire about 18 people to staff the Izod division of Kellwood, including a division president, vice presidents of sales and merchandising, a head designer and support personnel.
“We want to be in the women’s market and 1411 is the right building,” Ruzow said. “It’s where our customers will be. The biggest tenant is Jones, and we have a lot of Kellwood divisions in that building. So we’ve got six months of product development, six months of construction [on the showroom], so hopefully we’ll end up at the same time.”
As part of the deal, Kellwood will handle all the sourcing and distribution of the women’s line, and Upbin assured: “Our great core strengths are in sourcing, pricing and distribution, but we’ll collaborate. It’s all about the product. Izod women’s will be a major piece of the company.”
Weber added that the goal, ultimately, is to add some zest onto the women’s moderate floor of department stores.
“There’s a huge amount of business done in women’s moderate, but no energy,” he added. “If we could apply this formula in Izod to get away from more clothes and more stuff and to stand out and distinguish ourselves with great-looking product, we believe this could be an outstanding win.”