MERRIAM, Kan. -- At Lee's headquarters here in a placid suburb of Kansas City, the work day gets started early. Or, as Lee Brand general manager Gary Dawson said, "There's nothing like getting to work at 7:15 a.m. and seeing the parking lot already...
MERRIAM, Kan. -- At Lee's headquarters here in a placid suburb of Kansas City, the work day gets started early. Or, as Lee Brand general manager Gary Dawson said, "There's nothing like getting to work at 7:15 a.m. and seeing the parking lot already half full."
But Lee has a lot of work to do. The billion-dollar apparel division of VF Corp. is in the second phase of a repositioning that started last year when it pulled distribution from the mass market retailers.
That move came after parent company VF decided it wanted to get into the moderate jeans market with a strong core brand -- an area that none of its denim holdings addressed. Lee, with its recognizable and marketable name, was the best candidate, particularly because VF was already well established in the mass market with the Wranglers brand.
After the decision was made to pull Lee, the company had to approach its mass accounts and explain the repositioning without alienating the stores -- which, executives hinted, was a rather touchy process. Lee developed a new brand, Riders, as a replacement to offer the mass market.
On April 1, 1993, Lee stopped shipping to the mass market -- and, according to the firm, exited $300 million worth of business. The next step was to aggressively court the moderate and upper moderate tier of retailers, informing them of Lee's new direction, and convincing them that the brand -- which offers both basics and some fashion -- would be a profitable addition to their denim offerings.
In doing this, Lee is abandoning a fairly secure position and entering into territory that's been held by big-name brands such as The Gap and Levi Strauss, the company that Lee executives only half-jokingly refer to as "the other L brand."
But these are very considered moves. Behind the repositioning is a long-term strategy that includes changing Lee's internal structure, increasing the number of doors it sells to and its presence on the selling floor, and upgrading the consumer perception of Lee through advertising. There's also a new women's line -- Lee Legends -- that was introduced this month for the better department store tier. Priced at $17 to $19 wholesale, and using premium goods and more forward styling, "it could easily compete with Guess and Pepe," said Timothy A. Lambeth, Lee Apparel's president. Lee Legends will be shipped to 25 handpicked accounts this fall, leading off with the County Seat chain of denim stores.Starting with holiday shipments, all of Lee's products, from children's to misses' to men's, will be backed up by advertising, marketing and a new and much hipper in-store point of purchase display that will become mandatory for retailers carrying Lee product.
Lee and VF executives are predicting that the moves will result in Lee brand dominance in the misses' and juniors' moderate jeans market, as well as a 10 percent increase in earnings per share this year, according to Lawrence Pugh, chief executive officer of VF Corp.
Pugh said that the driving force behind the repositioning was that "we had Lee and Wrangler [also owned by VF] competing for consumers as well as retail space, and we had a void in department stores." Now, Pugh said, the corporation has all its denim bases covered.
As for profits through 1995, Pugh said, "We have told the street that from a corporate standpoint we hope to increase earnings per share by 10 percent, and jeans are roughly 50 percent of that." He added that the product approach is to do exactly the same thing in Europe, where VF has the Lee and Wrangler brands, and had introduced a brand called Maverick to the hypermarket tier of distribution.
Lambeth said that Lee Apparel did "well over a billion dollars, including juniors, casual, fleece, Lee and Riders in 1994. About three-quarters of that is the Lee Brand."
"We were talking about how this could be done in 1986, when VF acquired Wrangler," said Lambeth, who joined the company from Wrangler two years ago. "We were saying that if these brands were properly managed, we can handle almost every tier of distribution."
"What we're doing now is to continue the evolution of the brand as we see it, and also do some internal restructuring," said Dawson.
As Dawson walks through a large conference room in the company's Merriam headquarters, he points out newly designed point-of-purchase displays and signs.
"We set up this room as a laboratory to experiment with various product mixes, and to see how we're communicating the product," he said. "We bring consumers in here and ask their impressions. They'll take a look at the point of purchase and we'll say, 'What does this word mean to you?"' We also bring in key retail customers here for partnership with retail presence, to go through our advertising, and so forth."Before the current Lee changes could take effect, Dawson said, the Lee brand had to leave its established distributors.
"The initial phase was to remove the Lee brand from the discount channel and reposition it in a moderate channel with anticipation of capturing a larger market share in the moderate and upper moderate base," said Dawson. "The company provided an additional brand -- Riders -- for the discount channel."
Lee made its own determination as to what was discount and what was moderate, based on advertising, promotion and merchandising. Dawson declined to name names because, he said, retailers who consider themselves in one category might be annoyed to find that Lee considers them in another. However, the Lee brand did pull out of stores such as Bradlee's and Target.
"We stopped shipping what we classified as discounters on April 1, 1993," said Gordon Harton, newly appointed vice president and general merchandise manager for jeanswear. "But we had started having these discounters in meetings six months prior to that, to explain how we were going to split the equity of Lee with Riders. When we left the discounters, we exited $300 million of wholesale business. As we implemented that, and since that date, we have continued to evaluate accounts we do business with, and we have exited another $70 million in that mass market area."
Harton said that radical business change ultimately did not affect Lee's bottom line, because the company made up the difference in the remaining nine months of 1993 with new business.
"We did start expanding our product mix with other accounts, in most cases in the moderate level distribution," Harton said. "During the last nine months of 1993 we were able to ship the same volume, at the same price and the same number of units. That was due to increased distribution in the moderate base, some new accounts with upper moderate stores and the Riders business picking up some slack."
"So at the end of 1993, we said to ourselves, 'OK, what are the strategies we need to effect to realize our goal?"' Dawson said. "If we are not able to sell to the mass merchants, how do we merchandise ourselves to the retailers who only know us as a discount or moderate brand?"Lee developed a six-point strategy and created a new post, general merchandise manager, for areas that the firm felt were strategic business categories: jeanswear, youthwear and casualwear. Harton, Marcia Griffith and Peter Keene, respectively, have taken those posts.
"Previously we only had one vice president of product development," said Dawson. "We've empowered these positions beyond product development to include marketing, packaging and so forth. Each one of these individuals will put together the entire package for that unit. It's a more comprehensive business responsibility."
Next came the job of convincing retailers to take a more serious look at Lee as a brand that could offer value as well as profitability, with a dash of fashion.
"We decided our mission was to be the premier brand in core casual apparel in moderate and upper moderate marketplace," Dawson said. "We went to a lot of retailers and explained that Lee could be a profitable brand for them. We saw a niche in the upper moderate marketplace that was being filled by chain specialty stores -- the Gap, Banana Republic, Structure -- but not at the department store."
Because Lee's products are fairly consistent, the company is able to set up its factories so that products can be churned out rapidly -- one plant in Lebanon, Mo., produces 25,000 pairs of jeans a day. This in turn lowers production costs and, in conjunction with electronic data interchange or EDI, increases turnover and results in a higher margin for retailers.
Then Lee turned its attention to its own product. Using focus groups and customer responses, Dawson said, the company partitioned its customer base more clearly and developed products for each of those groups.
"For example, we targeted the 20-to-30 upper moderate female as one of our primary targets for the five-pocket jeanswear product," said Dawson. "We decided it had to be in the $30 to $35 range, it had to have fashion and detail, and that we had to have the product in the showroom Jan. 1. We are introducing four new fits in misses' and juniors, two new fits in men's and two in the youth area.""We will also continue to pursue the shorts market," said Harton. "That has become a year-round business for us."
"We are introducing an incredible amount of new fits and merchandise for fall 1994," said Dawson.
New fit offerings include the Easy Fit, which sits lower on the waist, is relaxed through the hip and thigh but comes down to a straight leg, and Super Slim jeans in the juniors line, following the trend toward closer-fitting jeans. In fact, juniors is an area that Dawson said Lee has its eye on.
"We realized there was a tremendous opportunity in the junior area," Dawson said. "We redid everything from fit to packaging. We'll be making a real move into the junior marketplace."
"We also opened up the tops division in a fairly major way for 1994, especially in the wovens area," said Harton. "We want to be seen as a fairly forward tops line but still working off the denim and casual pants line. We will also be introducing some new fashion knitwear for spring 1995, which will allow us to expand the product assortment in every area."
Aside from the six-point strategy, there were some areas that Lee felt it could relax in -- EDI, for one, and marketing and advertising for another.
Lee has been working EDI into its distribution network for several years, to the point that, now, "about 75 to 80 percent of our business in shipping is through electronic data interchange," said Harton.
And Lee's highly acclaimed TV commercials will return to all four networks this fall during season premieres of popular series, according to director of marketing and communications Mike Robertson.
"We'll have a very good presence from Sept. 15 to Oct. 15," said Robertson, noting that he and Lee's ad agency, Fallon McElligott, have bought spots on shows such as "Frasier," "Grace Under Fire," "Melrose Place" and "Home Improvement," as well as a few newcomers such as "Me and the Boys" and "Models, Inc."
"We'll basically be blocking a night, because we'll be able to run three spots on one network in an hour and a half of viewing."There will also be a new print campaign, using a double-page spread format. Called the "Lee Jeans Fit Check," it features women in real-life situations: stretching to paint a window frame, reaching under the bed to find a shoe or getting off a bike. Each situation is given a name, such as "The Painting Mantis" or "The Shoe Finder." The ad campaign commences in late August and runs through the end of the year in Cosmopolitan, Cosmo Life After College, Glamour, Mademoiselle, Vogue, New Woman, Self, Seventeen and Us.
But Lee won't stop with denim: Lambeth added that the firm will make a big push with wrinkle-resistant fabrics for women's bottoms in the spring. In addition to the basic wrinkle-resistant cotton twill, there will be a linen-look fabric and a sueded twill, in both shorts and pants. And with the rising price of cotton, Lambeth said, he foresees blends making their way back onto the selling floor.
"We intend to be a player in women's casual bottoms," he said. "We've put together a business unit whose whole reason to be is this casual business. We think the growth for the next couple of years will come from the jeans business, but three or four years out we believe that casual slack and top business is a huge growth opportunity."
Lambeth said that in the search to continue to add value to its brand, Lee won't stop scrutinizing its internal workings, although he's quick to add that he doesn't foresee any layoffs or major hirings.
"We've spent a lot of time this year learning to do various processes faster and better," he said. "Now we're going to look at everything we do, and if it doesn't add value to the product, we're not going to do it at all."
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)