NEW YORK — The little Lizzes are getting together.
In an effort that is more strategic positioning than cost-cutting in nature, Liz Claiborne Inc. is consolidating its namesake’s subbrands into one master label.
Lizsport, Lizwear, Liz & Co. and Collection will be merged in spring and sold simply under the Liz Claiborne label. Lizgolf, which is relatively small, focuses on performancewear and is a useful branding tool at golfing events, will remain distinct.
A new marketing approach is also planned, and while many of the details are still to be worked out, it will include national advertising. The firm will also be employing a new in-store concept, called LizWorld, which will have a more residential feel.
The various subbrands, said Fritz Winans, group president of Liz Claiborne brands, were a holdover from the days before department store consolidation whittled the industry down to just a few key players and Americans took a more casual approach to dressing.
Although the subbrands were at one point situated together on the store floor, they drifted apart, particularly the more formal Collection line. Claiborne tested moving the subbrands back together in 69 doors this past spring and saw a 10- to 15-point sell-through improvement.
“At first retailers were somewhat hesitant just because they didn’t want to disrupt the apple cart in terms of the career zone versus casual,” Winans said. “But it has actually played out quite well for them and is going to for us. It kind of opens the gate and sets the platform.”
Retailers were told of the change during the September market. In all, the brand is sold in 2,000 doors domestically.
The move comes at a time of significant upheaval for the better-price zone in department stores, with several new and revamped lines vying for space or a greater piece of the action. Stores’ private label offerings are also becoming a greater force.
“Competition is very healthy,” Winans said. “The timing for moving to the one-brand strategy couldn’t be better for us.”
Liz Claiborne carries 97 percent brand recognition among customers, he said. However, the subbrands, which haven’t been marketed for six years, all had brand recognitions of 11 percent or less.Underlying the competition between the new lines is an increasingly fierce fight between major players within the department store sector for market share and survival. The embattled segment is also going toe-to-toe with powerful moderate chains, such as Kohl’s and even Target. It is a confrontation that has forced an upward migration in product and price point at the department stores.
“From a brand standpoint, we are very much dependent on department stores’ growth and our ability to grow in that channel because our relationship is built in the bricks and the mortar, and that continues to be the channel that we play in,” Winans said.
Sales of products bearing the Liz name produce roughly 42.5 percent of the firm’s revenues, representing about $1.58 billion last year. While Claiborne is looking for acquisitions and its smaller businesses to provide much of its expansion going forward, the headlining brand is also expected to grow, although not as quickly.
“We have to make the department store successful,” he said. “So, by us making it successful, it gives us the opportunity to grow within that sector. The better pie has gotten bigger and bigger.”
Rising to meet the increased competition, the department stores have striven for products that would set them apart from the rest of the pack. Moving to one Liz brand makes it easier for the company to offer its retail customers differentiated product. Winans said up to 25 to 35 percent of the product going to major chains will be tailored specifically and exclusively.
To do this, Claiborne has shifted some of the people who used to develop and support the subbrands over to producing the differentiated piece of the business in conjunction with major clients. This is particularly important for the firm, given the flexibility for which its customers have now become accustomed with their proprietary brands.
“It’s not just Liz, it’s Liz and the differentiated product that allows us to compete with the private label sector,” said Winans, noting the last five years has seen significant growth of better-priced private label product.
In all, fewer than 10 people, a small fraction of the brand’s overall workforce, lost their jobs in the shift to one brand, he noted.A central design team will also smooth out variations, such as slightly different color palettes, that existed between the subbrands, making mixing and matching easier for customers and opening the door, Claiborne hopes, for more purchases per visit.
“It really gives us the opportunity to reduce styles and [stockkeeping units],” said Winans.
Already, sku’s and number of styles are down double digits compared with a year ago, but should level off going forward, when the differentiated product is included as separate styles.
“It also affords us the opportunity to have greater clarity on the retail floor from a vision standpoint,” he said.
Despite the reduced sku count, Winans said the brand will “for the most part” maintain floor space. “This is a very big brand,” he added. “We spin off a lot of sales and margin dollars for retailers.”
A merchandise manager at a major department store chain noted, “The concept is very smart. The customer shops for Liz Claiborne as a total and to have all those different divisions is confusing to the customers.”
The move will also simplify the task for buyers, who in the past have had to go and see several different lines.
“It can mean less floor space in particular stores, but overall it’s just pulling the whole package together,” said the merchandise manager. “It’s still a very large line and will require the same square footage or somewhat less in some doors.”
While the varying pieces of the brand are brought in around one whole, Liz is also endeavoring to move forward.
“We need to evolve the brand to attract and reach new customers,” said Winans, noting a percentage of the line will be aimed at a “more modern and evolved customer base.”
In that vein, he added: “Look at the play that Wal-Mart today has played from an apparel standpoint versus where they were 15 years ago. From a business standpoint we need to evolve and that’s really what moving to the one-brand strategy is all about. It’s moving forward and creating a model that will be much more dynamic.”
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