NEW YORK — J.C. Penney has jumped headlong into the race for exclusive brands.
This story first appeared in the December 4, 2002 issue of WWD. Subscribe Today.
The retailer has signed an exclusive distribution pact with Bisou Bisou, WWD has learned, and it is in talks with a few more companies about similar deals.
Beginning in February, Penney’s will be the only retailer to sell the Bisou Bisou collection of contemporary sportswear currently sold at better department and specialty stores, like Bloomingdale’s and Nordstrom, and at the Bisou Bisou boutiques. But in middle America, where Penney’s reigns, the label is virtually unknown. And Penney’s officials acknowledge that Bisou Bisou, a dreamy brand which in French slang translates to “little kiss,” is largely foreign to their clientele.
Nevertheless, with some industrial-strength marketing being planned, including direct mail, magazine ads, new shops to highlight the goods and a big launch party in New York on Jan. 23, “Bisou Bisou will add tremendous energy and distinction to our women’s offering,” said Vanessa Castagna, chairman and chief executive officer of J.C. Penney stores, catalog and Internet. She’s expected to announce the deal today.
“This is a big change,” Marc Bohbot, chairman and ceo of Bisou Bisou, said in an interview. “We will be fully with J.C. Penney.”
He said his company stopped shipping products to other retailers in October, although Bloomingdale’s indicated it received goods in November. By the beginning of 2003, Bohbot said, stores should be entirely sold out of Bisou Bisou product. He also said that the eight Bisou Bisou stores (at one time there were 23) will close, leaving Penney’s as the sole distributor of the collection. Bisou Bisou does have rights to distribute licensed products outside North America and is currently working on a deal in South Korea. Also, Penney’s indicated that Bohbot retained the rights to sell his Bisou Jeans line at stores other than Penney’s, but that probably won’t happen for at a couple of seasons, considering the jeans distribution has also been winding down.
For Penney’s, selling Bisou Bisou will be the first attempt at fast fashion. It will test the ability of the chain’s newly created central merchandising team to speed trendier merchandise to its stores on a monthly basis, similar to the rapid-turnover merchandising models pioneered by Zara and Hennes & Mauritz.
It’s also an opportunity to capitalize on a category that’s been the hottest in apparel at department and specialty stores across the country, which sell contemporary sportswear at higher prices, whereas Penney’s is sticking to moderate prices. Bisou Bisou has a reputation for its fit, and for often featuring the latest in fabrics and washes.
The deal parallels Target’s deals with Mossimo and Todd Oldham and Kmart’s with Joe Boxer and Martha Stewart, which are all exclusive arrangements. However, Mossimo and Martha Stewart appeal to wide demographics with a vast array of products in several categories, while Bisou Bisou at Penney’s will be sharply focused on the contemporary market, targeting 25- to 35-year-old women, at least initially.
Bisou Bisou’s volume will certainly grow way beyond it’s current $80 million, which includes wholesale, retail and licensing sales, according to the Bohbots. Penney’s declined to provide a sales projection for Bisou Bisou, but some industry estimates said the partnership could potentially be a $500 million business in three to five years, provided there is an expansion of doors and categories. Initially, the collection will include women’s sportswear, dresses, denim, activewear and swimwear. The Bisou Bisou principals will collect a percentage of sales. They declined to comment on other compensations.
At 450 doors, or roughly half the store fleet, Penney’s will open contemporary shops selling Bisou Bisou and Mixit. That seems like a lot of doors right off the bat, but Penney’s said the merchandise has been quietly tested for holiday under the Baiser Rouge label, which means “red kiss” in French. The shops will range in size from 1,200 to 2,400 square feet, depending on the size of the total store. Fixtures and advertising graphics are being developed for the program.
It’s possible that more Penney’s units will carry the goods after the spring, depending on how Bisou Bisou performs, and that the collection will expand into men’s and children’s wear. Penney’s is sourcing and manufacturing the merchandise, while Bisou Bisou designer and president Michele Bohbot will design the goods.
In the Eighties Penney’s created Halston and Mary McFadden collections. Both were dropped.
Currently, Penney’s offers only one contemporary line, Mixit, a private label that recently installed a new in-house design team for updated styling. For the past year, Penney’s has been slowly but steadily luring design talent to its Plano, Tex., headquarters. About 20 designers have been recruited so far, mostly for the denim line Arizona, Penney’s best-known brand, which now has an attitude reminiscent of such brands as Abercrombie & Fitch and Polo Jeans, with its low-slung hip-hugging jeans and bare-belly looks. More designers will be recruited to modernize Penney’s other top in-house brands: St. John’s Bay, Stafford, Worthington, Delicates and J.C. Penney Home Collection.
On the branded front, “We’re looking at maybe a couple of others [beyond Bisou Bisou],” said Liz Sweney, Penney’s executive vice president and general merchandise manager of women’s apparel and accessories. “We’re keeping our doors very open to different ideas.” However, no deal with another brand is imminent, she said. Betsey Johnson recently made the rounds, visiting Penney’s and Target, but Johnson previously said she’s decided the mass channel wouldn’t work for her in fashion. She is interested in creating home products, however.
This spring, Bisou Bisou will be the only Penney’s collection with a designer cachet, though some licensed designer product is sold. Any new deal that arises probably couldn’t be executed until the fall.
Bisou Bisou was founded in 1989 by Michele Bohbot and her husband Marc. Both are French and born in Morocco.
Their Penney’s deal apparently happened fast, despite the fact that Michele said she never visited a Penney’s store until negotiations began. At the Fairchild CEO Summit in Palm Beach, Fla., in 2001, Castagna met Marc Bohbot for the first time, but around the same time, Penney’s merchants started discussing how their stores could be more attractive to younger customers, particularly those 25- to 35-years old. According to Sweney, “Marc actually contacted us, and we had an initial meeting with Marc and Vanessa and myself nine months ago. It really went quick, for a deal. From the first conversation we connected on what we needed and on what they thought they could bring in design skill.”
Ken Mangone, Penney’s vice president and divisional merchandise manager for career and contemporary, said, “Internally, we really knew we had a void — we knew that department stores were doing well at a higher prices with contemporary and that it’s one of their stronger businesses, and at the same time, we saw how the business was going at H&M, Zara, and Express.”
What Penney’s is really counting on are the Bohbots delivering a flow of new items to its stores every month, updating seasonal collections constantly. For Penney’s and department stores in general, it would be a breakthrough getting a regular diet of trendy goods at moderate prices.
The Bisou Bisou collection for Penney’s will have between 75 and 80 items in total, with about 40 sportswear items in the first month, then between 15 and 20 items flowed in monthly. There will also be between eight and 12 dresses, about 14 swimwear items and about 15 activewear items, as well as denim. Regular prices will range from between $18 and $70, but are bound to drop, given Penney’s promotional posture. That’s about 65 to 70 percent lower than existing Bisou Bisou prices.
Michele said that while working with Penney’s, she has not experienced frustrations. “Nobody has ever removed some trim or changed the fabric,” she said. “The production is beautiful.” Asked if she toned down the look for Penney’s, she replied, “The collection is more balanced than what it used to be. There are some sexy pieces and some less sexy pieces.”
In the context of Penney’s turnaround, the Bisou Bisou brand “is a big thing,” Sweney said. “It’s all about the merchandise. We are spending a lot of time and energy on delivering to the moderate customer the right fashion….We really didn’t do this based on the name equity,” behind Bisou Bisou. “We’re not sure our customers know Bisou Bisou. It is a fun, sexy name, but the biggest piece [for Penney’s] is the design talent behind Bisou Bisou and the talent of Michele and Marc.”
Asked if Penney’s strategy is to step out with sexier, trendier merchandise, Sweney replied: “The answer is a definite yes. We need to be there, and we think we can do it as well as anyone at moderate prices. I believe we are making great progress, but we are not there yet.”
“Sometimes in life you have opportunities,” Michele Bohbot added. “And if you are a little bit smart, you need to adapt yourself to what is happening. I never went to a J.C. Penney. It was really strange to see it, but I was really open and I said, ‘why not?’ It was comfortable to stay where we were, but we were comfortable to go to the next level.”