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Oscar Goes Casual: Penney’s and Kellwood Deals in the Works

Oscar de la Renta is getting ready to branch out into yet another facet of his widening fashion domain, this time in lower-priced sportswear.

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NEW YORK — An Oscar de la Renta denim and casual sportswear line is on the horizon — and it could be with J.C. Penney Co. Inc. and Kellwood Co.

While the de la Renta name evokes luxury apparel — as evidenced by his spring collection shown Monday — the designer said a moderate-to-better-priced line is a natural progression for the brand and told WWD he is developing a denim and casual lifestyle collection that will likely launch at J.C. Penney stores. De la Renta also said he is in talks with Kellwood. to produce the line, which market sources said could be done through Kellwood’s ENC division.

Calls to Kellwood seeking comment were unreturned by press time, but Stephen Ruzow, president of Kellwood women’s wear, was reportedly spotted Monday at the de la Renta show.

Meanwhile, Vanessa Castagna, executive vice president of J.C. Penney and chairman and chief executive officer of stores, catalog and Internet, confirmed that the chain is talking with de la Renta.

“These are strictly conversations at this point,” she said. “We always look for opportunities that our customer would relate to and where we can integrate design into a moderate price point because we think the consumer does not have as many opportunities at the moderate price level.”

The potential deal makes Oscar de la Renta the latest designer brand with its sights set on a lower-priced market and will join Calvin Klein, Marc Jacobs, Michael Kors and Nicole Miller, looking for a bigger share of the $38.8 billion women’s sportswear market. Much of that figure comprises moderate- and better-priced sportswear, according to STS Market Research.

De la Renta stressed there was no signed deal with Penney’s or Kellwood, yet, and industry sources said they are not the only firms with which he is pursuing a partnership. De la Renta did, however, hire a new member for the design staff who has experience working in both the high and moderate ends of the apparel spectrum. Kibwe Chase-Marshall, who started last week, is a veteran of Michael Kors and most recently was with Isaac Mizrahi, where he worked on the Isaac Mizrahi for Target line.

“Everybody is doing lower-priced collections — Ralph Lauren, Calvin Klein and Donna Karan,” said de la Renta at a recent trunk show at Neiman Marcus in Dallas. “My collection is the most important thing and I don’t want to jeopardize it. But this [would be] for a completely different consumer.”

Some of those consumers could be of Latin American descent, since de la Renta hails from the Dominican Republic and is regarded as a celebrity in many Latin American countries. That exposure could be used as a platform for a new line, since there is currently a Hispanic population of 39 million in the U.S.

Regardless, the decision to launch a more moderately priced line comes at a time when the brand is enjoying considerable success with its designer-priced collection, the in-house accessories line and a burgeoning collection of licensed businesses. Currently, the line represents an estimated $50 million in collection sales, plus an estimated $600 million at retail with licensed products.

However, those figures could be increasing. The collection business is up about $5 million to $6 million over 2002 — it’s up 38 percent at Bergdorf Goodman alone, de la Renta said — and the accessories line that launched in 2001 is the fastest-growing division in the company. Last month, to further support the growing business, de la Renta hired Alexander Bolen as director of corporate development and promoted Rachel Barnett to chief operating officer. Further, Blanche Napoleon, formerly president of Via Spiga, was brought on as executive vice president of accessories.

In addition to the in-house businesses, de la Renta’s successful home furnishings line that launched last year — Oscar de la Renta for Century Furniture — has spawned other licensing ventures in the home arena. Most recently, the company signed a licensing deal for decorative fabrics for home use with Bombay, India-based ANK Ltd., which has been a longtime apparel fabric supplier to the company. ANK will produce the fabrics but they will be distributed through Fonthill Ltd. in the U.S., which has a showroom in New York’s Decoration & Design Building, as well as about a dozen other showrooms across the country.

A license for bedding products also recently was signed with a firm called Rose Tree under the Oscar de la Renta and Oscar by Oscar de la Renta labels. The latter carries the same name as the firm’s licensed bridge apparel line, which will begin offering outerwear next year through a recently formed licensing agreement with Fleet Street Ltd.

Other deals in the home furnishings world are likely on the way, according to Bolen.

As for the potential Penney’s pact, it could not be learned whether the de la Renta line would remain exclusive to the retailer for a designated period of time or permanently. In January, Penney’s signed an exclusive distribution deal with contemporary brand Bisou Bisou and a similar deal followed several months later with BCBG Max Azria Group for its Parallel contemporary brand.

On the flipside, the retailer only has a one-year exclusive deal to sell the True Beauty by Emme plus-size collection, though it has the option to renew. That line, coincidentally, is being produced by Kellwood’s Halmode Apparel division.

Other brands licensed to the $2.2 billion Kellwood Co. include the CK Calvin Klein women’s license, which was finalized in June, XOXO for junior apparel and dresses and Izod women’s wear. Calls to Kellwood seeking comment were not returned by press time.

Designers who have recently said they plan to go after the better market include Michael Kors, who will terminate his licensing deal for the Kors line, with Onward Kashiyama USA following holiday deliveries, as reported. Instead, he will launch Michael in-house for fall 2004 retailing, with a goal of eventually reaching $1 billion in sales.

Earlier this year, Marc Jacobs said it plans to launch a lower-priced line. Industry sources said Kellwood and Jones Apparel Group are the main contenders, but that the Jacobs company was proceeding cautiously into the arena. Also, Nicole Miller will launch a better sportswear line next spring.

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