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New Label and Stores on Tap for Aioli

Aioli Co., a $100 million South Korea apparel maker, is revving up its U.S. profile in a prelude to an initial public offering.

TORRANCE, Calif. — Aioli Co., a $100 million South Korea apparel maker, is revving up its U.S. profile in a prelude to an initial public offering.

Less than two years after opening an office in Los Angeles and launching Stateside contemporary brands, Plastic Island and McGinn, the Seoul-based company this month debuted its first Plastic Island store in the U.S. at the Del Amo Fashion Center here, and plans to open more on the West Coast and in New York.

Aioli plans to kick off a third contemporary brand, Egoist, in the U.S. next spring. Set to debut at the Intermezzo Collections trade show in New York on Aug. 5, Egoist bundles Lurex thread, accessories complementing looks and thigh-high hems in party-ready outfits wholesaling from $50 to $300.

These steps are intended to build momentum for 10-year-old Aioli as it prepares for an IPO in Korea in 2009. Egoist generates half of Aioli’s sales, Plastic Island accounts for 30 percent and McGinn for the remainder.

“Our company has a chance [in the U.S.],” executive director J.C. Song said.

Aioli comes full circle with the U.S. launch of Egoist. The company introduced Egoist in South Korea in 1999 after obtaining rights to produce the line under license outside of Japan from Tokyo’s Egoist Co. Ltd. Five years later, Aioli bowed McGinn in Korea, and followed with Plastic Island in 2006.

For the U.S. market, however, Aioli decided to wholesale Plastic Island first for spring 2006 and make it the center of a retail push because as the lowest-priced of the company’s three brands, it’s the most accessible in terms of price points and design, said Kyutae Kim, marketing manager for Aioli’s U.S. wholesale business.

Aioli adopted a cautious but steady approach to expand Plastic Island’s retail base in the U.S. It aims to open three to five units for Plastic Island on the West Coast in the next two to three years, followed by at least one location in lower Manhattan. Aioli operates 45 stores for Plastic Island in Korea and another five in Taiwan.

In Torrance, located 20 miles south of Los Angeles, Plastic Island’s whimsically designed boutique is in a new outdoor section of Del Amo Fashion Center, which is owned by Chevy Chase, Md.-based Mills Corp. Trend-driven retailers such as Forever 21, Anthropologie, Lucky Brand Jeans and Urban Outfitters surround Plastic Island’s estimated 5,000-square-foot store in what Mills calls the “lifestyle wing.”

Kim said Aioli chose Torrance because “we have so much distribution in larger cities, and we didn’t want [the store] to come into contact with that.”

The boutique’s ultrafeminine decor evokes both Marie Antoinette’s boudoir and a modern art gallery. Just inside the all-glass facade, mannequin vignettes incorporate chartreuse-colored ceramic statues of lions. Mauve-hued ceramic stag heads are mounted on the bright white walls, and two towering sculptures of a “fantasy animal” — part giraffe, part horse — inhabit opposite ends of the boutique. Huge plastic scrims printed with graphics depicting silhouetted nature scenes with rabbits and flowers hang from the ceiling.

“We tried to create a surreal shopping environment,” said Kim, adding that the boutique is more elaborate than the Korean stores, with more moldings and custom-made furniture, including curvy, built-in shelves and display tables resembling black-lacquered dressing tables.

Plastic Island-branded handbags and jewelry, which are available only in the Torrance store, occupy their own spacious corner, next to private label footwear, which Aioli began wholesaling for this fall. Handbags retail from $70 to $150 and shoes cost from $150 to $200.

The boutique also stocks a more sophisticated line called Demi Couture by Plastic Island, which costs between 20 percent and 30 percent more than the signature group. “We launched Demi Couture because we wanted something a little special for the customer who’s looking for things to go out in,” Kim said.

For the customer who wants more flash, Egoist fits the bill. Among the 80 styles that Aioli will unveil for next spring are white denim HotPants featuring a double waistband and gold buttons, and white Edwardian cotton shirtdresses with lace detailing on the sleeves and neck.

Kim said Aioli wants to place Egoist in the same specialty shops that sell Plastic Island. Dismissing concern about a conflict because the two labels promote different aesthetics, she said Aioli set a first-season wholesale sales target of $600,000 for Egoist, to match what Plastic Island achieved in its U.S. debut.

Wholesaling for $30 to $250, Plastic Island is sold at specialty shops such as Planet Blue in Santa Monica, Calif., Hillary Rush in Los Angeles and Neiman Marcus’ contemporary unit, Cusp. McGinn, on the other hand, arrived in the U.S. last summer with wholesale prices from $60 to $500. Incorporating rich fabrics such as silk and mink, McGinn is carried by specialty retailers including Los Angeles’ Inago, in addition to Nordstrom’s Via C department, which ordered it for this fall, Kim said.

Translating South Korean style for American women isn’t easy, said Barbara Fields, who travels regularly to Seoul, London, Tokyo and other world capitals as the head of her namesake Los Angeles company, which forecasts fashion trends for retailers. She pointed out that women’s bodies in the two countries are vastly different. In general, Korean women are thin with narrow hips and small chests. They wrap themselves in multiple layers, donning styles such as bubble knit tops and elongated hoodies that might not flatter curvy Americans, she said. And they aren’t shy about accessorizing their outfits with pom-poms and other attention-grabbing doodads.

“The Korean style gets very cutesy and very sweet,” Fields said. For the U.S. market, Korean companies “have to keep it more cleaned up,” she said.

To accommodate U.S. customers, Aioli made some tweaks. At Plastic Island, it designed woven tops sold here to be a little larger than what is offered in Korea. It also hopes to enable American consumers to develop a knack for sprucing up outfits by including mock patent leather belts and other accessories with about one-third of Egoist’s wares. For instance, a long chain necklace adorned with plastic navy beads is threaded through loops bordering the neckline of a knit dress with silk blouson sleeves. Plus, all the sheer dresses and tops are sold with slips and tanks to assist dressing and give a perception of more value. Made primarily in South Korea and China, the garments can be shipped to the U.S. two months after an order is placed, Kim said.

“We’ve had a pretty good ride so far,” Kim said. “We’re growing here really fast.”