NEW YORK — The Joseph Abboud brand is heading east.
Parent company JA Apparel, boldly pushing forward with its plans to turn Abboud into the next global lifestyle brand, has inked master licensing deals in China, Malaysia and Indonesia, and expects to have agreements in place with a total of 75 countries by year’s end.
The deals, which include an ambitious retail rollout—30 stores are slated to open in China next year—are expected to generate $400 million in sales by 2010 and will mark the next step in the evolution of the Joseph Abboud label. Currently the company’s international business is around $100 million.
“In men’s apparel there are few mega-brands and we aspire to be one,” said CEO Marty Staff. “The next step in our growth is through international licensing.”
Growth has been the battle cry at Abboud since J.W. Childs Associates, a private equity investor, bought the company from GFT in 2004. Since then, Staff has added classifications such as denim, sportswear and luggage, and broadened distribution with a boys’ business, as well as a younger clothing label, JOE. A women’s line is also said to be in the works. The company has nearly tripled sales since the takeover, topping $300 million last year, and licensing revenue has grown 500 percent.
At the center of the new initiative is China, where the company expects to open 30 stand-alone stores in the next year, including two 5,000-square-foot flagships, through its local partner, Judger Group. Staff expects the flagships, slated for Shanghai and Beijing, to be open by the start of the Beijing Summer Olympics next August.
Plans include a minimum of 100 doors in China by 2012, including 50 department store accounts. The rest will be stand-alone units.
“We’re tapping into the rise of the consumer in China,” said Kenton Selvey, senior vice-president of licensing for JA Apparel. “The preference for quality U.S. product [in China] is strong.”
The stand-alone stores will be the first for the company outside the U.S. The units, which will average 3,000 square feet, will take a lifestyle approach, offering tailored clothing, denim, boys’ wear and luggage.
The company is also exporting its U.S. market strategy, targeting the 35- to 54-year-old with price points commensurate to its domestic business. There are, however, some key differences. Tailored clothing will be “more forward,” according to Selvey, with a leaner fit and fashion details, such as pocket treatments and whipstitching. The importance of accessories in China will affect the merchandise mix as well. “Handkerchiefs are big [in China]” said Selvey. “We’ve had to develop a line.”
Abboud is the first Western brand for Judger, a large manufacturer of Chinese tailored apparel and shirts. The company produces 750,000 suits per year.
Under terms of the deal, Judger will produce and distribute Joseph Abboud apparel for the Chinese market under supervision of the parent company. In turn, JA Apparel will use a portion of the royalties to market the brand in the region.
Staff has also inked deals with Parkson in Malaysia, where Abboud will be distributed in up to 15 department stores in 2008, and PT Ricky in Indonesia. He said the company is also close to penning agreements in India, Korea and the Middle East, as well as Europe. “In the 3 1/2 years since I’ve been here, this is the most exciting time for this business,” he said.
The brand has had some international distribution for 10 years and the Joseph Abboud label is currently sold in Japan, through a license with Onward Kashiyama, as well as Taiwan and Canada. Last year the company announced deals with Mexico, and Central and South America.
Japan, where Abboud is in more than 70 doors, served as a testing ground for the brand in Asia, where the business has continued to grow between 8 and 10 percent a year. “Japan taught us that we could expand to the rest of the region,” said Selvey.
The company estimates $100 million in non-U.S. sales this year and expects that number to quadruple by 2010. Licensing agreements vary, but the company said royalty agreements will range between 10 and 12 percent of sales.
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