NEW YORK — Move over, Martha, Thalia and J.Lo. Lucy is coming.
This story first appeared in the February 27, 2003 issue of WWD. Subscribe Today.
Lucy Pereda, the hostess of the hit magazine show “En Casa de Lucy” on Galavision, does it all: decorating, arts and crafts and cooking. She even doles out fashion advice. And with the launch of an eponymous collection of lifestyle and career apparel at Sears in August, produced by Kellwood Co., Pereda is poised to become the next multitasking celebrity to churn out an array of licensed products.
Like J.Lo’s apparel collection, Pereda is expected to have some crossover appeal to the general population. And like Thalia, a Latin entertainer launching a brand of women’s apparel and accessories at Kmart in September, Pereda is eager to stake a claim to the vast consumer spending power wielded by this fast-growing demographic.
By the year 2007, Hispanics will have $900 billion in spending power. Latin consumers number nearly 37 million and spend about $6.5 billion on apparel annually. The market has been neglected to some extent by specialty and department stores; however, the mass market has long catered to Hispanic and Latino customers, either through national brands or micromarketing at the local store level.
The Lucy Pereda collection will bow in 227 Sears full-line stores in time for back-to-school selling as part of a short-term exclusive agreement with the retailer. After the holiday season, Kellwood plans to market the collection to other stores.
“We expect to show and sell the collection to Penney’s and Kohl’s,” said Stephen Ruzow, president of Kellwood Womenswear. “We also have the right to do a derivative label for the department store channel of distribution. We envision doing a Lucy Pereda collection label for Federated Department Stores, May Co. and Saks Inc.”
In addition, Kellwood pans to export the brand and is meeting with Sears Mexico in two weeks.
“We think this has real legs in terms of going around the world,” Ruzow said. “Not only is there a tremendous Hispanic community within the U.S., this really opens us up to Central and South America as well as Spain and Portugal. Kellwood has historically not done a lot of business outside the U.S. This would be a vehicle for us to launch internationally.”
Ruzow declined to discuss volume, but industry sources said the brand could do $100 million in 2004 once it’s rolled out nationally and internationally.
Kathryn Bufano, executive vice president and general manager of softlines for Sears said the retailer would like a longer period of exclusivity.
“Well, we’ll have to discuss that,” she said, hinting that Sears may have some bargaining power with the manufacturer. “Kellwood is a very important partner. We carry a tremendous amount of their different lines, ladies’, men’s apparel.”
But the launch program at Sears is nothing to sneeze at, Bufano said. “The 227 stores is definitely an aggressive launch for us right out of the box. It will contribute sizable volume.”
Bufano said the 227 stores are not just Hispanic markets, but Sears’ big apparel markets. “We have very strong apparel business in stores in suburban markets,” she said. “This is a blend between our Hispanic and general markets. The merchandise itself is so fashionable and right on trend, it’s perfect for missy/sportswear. It’s more than the Hispanic story. It has universal apparel.”
“The clothes don’t yell Hispanic,” said Ruzow. “They yell great quality, great styling, great prices. The first few months at retail will be critical” to determine the success of the brand.
Lucy Pereda is being sourced, designed and shipped by ENC, a Kellwood company, which manufactures David Meister, David Dart and Democracy.
Like other apparel targeted to the Hispanic and Latino consumer, Pereda’s collection is colorful with lots of embellishment such as embroidery and feminine detail and natural fabrics. Deliveries will be made monthly to keep the fashion fresh.
“There are so many merchandise opportunities beyond apparel, like home fashion,” said Bufano. “Her design aesthetic and fashion input can be translated into much broader categories. There’s a lifestyle positioning of Lucy in the home.”
Random House recently published Pereda’s cookbook focusing on Latin and international cuisine, so there may even be cookware in the offing.
Pereda is not new to Sears. She writes a regular column about entertainment and gift-giving for the retailer, which publishes a magazine for Hispanics with a circulation of more than 850,000.
Obviously, Sears is not new to ethnic marketing. The chain features store signs in Spanish and English at some locations and micromerchandises stores in brighter colors and extended size ranges to appeal to both black and Hispanic customers.
The spending power of Hispanic consumers is a fact not lost on mass merchants, which are becoming increasingly aggressive in wooing this consumer group. Kmart, which said that 39 percent of its customers are multiethnic, recently began printing apparel labels in Spanish and English, and the company said it is looking into other brand opportunities for ethnic shoppers.
In addition, Kmart executives have a new philosophy: shifting power from headquarters to the local level.
J.C. Penney has a director of multicultural marketing on staff, Manny Hernandez. The chain’s initiatives include Modelo Mundial, or World Model, a Hispanic model search and scholarship.
Manufacturers, such as Miami-based Perry Ellis International, which said Wednesday that it is focusing on the Hispanic market, are also keen to develop products for this customer, and it’s no wonder.
According to Mediamark Research Inc., 46 percent of Hispanic consumers surveyed said they like to dress in the latest fashions, compared with 36 percent of white shoppers.
Kellwood has already targeted market segments such as large sizes with True Beauty by Emme, which launched at Penney’s in January. Ruzow noted that 60 percent of the women in the U.S. are size 16 or larger.
The company is also eager to break into the ethnic marketing game. “A tremendous amount of Sag Harbor merchandise is purchased by ethnics,” said Ruzow. “Lucy Pereda is our first dedicated label targeting Hispanics. We will look at an Asian opportunity. We’re working on something for the African-American market, also, with a media personality.”
He declined to discuss details.
“There is a gap for the Latino woman,” said Pareda. “Most trendy changes in fashion are first taken to junior sizes. When you go to missy, it’s very conservative. I’d like to see something fun and sexy in a range of sizes.”