By  on June 22, 1994

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.

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