By  on October 30, 2007

For some mature brands, reinvention is the only source of survival. For others, it's an impossibility that no amount of financial resources and design talent can accomplish.

Companies such as Burberry, Coach, Gucci, Lacoste, Dior, Diane von Furstenberg, Guess and J. Crew are textbook cases of brands that have reinvented themselves and enjoyed tremendous success in a second life. They could offer lessons to others such as Gap, Liz Claiborne, Anne Klein, Bill Blass, Halston and Tommy Hilfiger, all of which are currently in the midst of trying to reinvent themselves. These labels had overwhelming success during their heydays, but have matured and lost their way over the last few years.

Marketers caution that reinventing a brand can't be done overnight because the company can lose its loyal customers before winning over new ones, as was the case at St. John several years ago, which dramatically changed its fit and target customer with disappointing results. After several painful seasons, it has since returned to its original designer, Marie Gray, and traditional fit and is experiencing a comeback at retail.

Hiring the right designer is often viewed as the critical component to reengineering a brand, and total attention must be paid to the brand in an effort to return to its essence and reason for being successful in the first place, said experts. They also say it's easier to reinvent a brand when it's out of the spotlight (i.e., not a public company) and Wall Street isn't demanding improvements every quarter. But sometimes brands achieve tremendous success because they hit the market at the right time and no amount of reinvention can resuscitate them, nor can they flourish in the same channels as they had previously. These brands often need to consider different channels of distribution, or a time-out, so to speak.

WWD surveyed brand and marketing specialists about what it takes these days to reinvigorate a mature brand. Is it a new designer, an infusion of capital, a completely overhauled product line, a new channel of distribution, or a different business model?

"Brands, like people, have cycles," said Marc Gobé, co-founder, chairman and chief executive officer of Desgrippes Gobé. "There's the genesis, the maturing, the brand ages, then you have to consider rebirth and reinvention. Some have a hard time to make that jump."Often what causes a brand to become irrelevant is that the competition gets too severe or the consumer becomes too mature. "The mature brands lose the younger generation. The younger generation gravitates towards brands that are culturally relevant to them," said Gobé.

He pointed out the best reinvention story is that of Dior. "It had aged with its customer and completely lost the excitement and energy. Dior was a revolutionary brand when it started. People would attack women in the street in 1947 when they wore it. Then it became mainstream and when Bernard Arnault bought the brand, he went back to the essence of the brand, and [John] Galliano completely reinvented it."

Gobé also feels Estée Lauder has been able to stay relevant throughout the ages by returning to the essence of the brand and offering innovative beauty products. He noted Estée Lauder in the Seventies and Eighties was a very imaginative and inspiring woman. "She believed in the American luxury brand for a beauty brand. She broke the rules to make her mark. She convinced millions of women and was the right voice for the brand. The brand today has the same kind of spirit and innovation. The reinvention of the brand has been successful."

Several years ago, Gobé worked with Abercrombie & Fitch on its reinvention and discovered there was a market that hadn't been appropriately tapped into — college-age kids.

"They were a traditional brand like Brooks Brothers, and they were selling fishing equipment, and it was a different type of store. They identified the market that was completely untapped. There was a 19 million-people college market, and no one was addressing them as a niche," explained Gobé. "We found in this environment the lifestyle of the student was a real connection to the outdoor heritage of A&F. We changed the brand from a traditional Ralph Lauren type of brand to one that was sexier, with graphic vocabulary inspired by the old catalogue. They had deep down values that could be reinterpreted to a new customer," he said.

Often a brand can be reinterpreted for a new generation that never had the product before, such as the strategy Diane von Furstenberg took in reintroducing its successful wrap dress from the Seventies, which resonated with today's young consumers. Today, DVF is as relevant as it was 40 years ago, if not more so.Lacoste, for example, was able to have another life by bringing in a new designer [Christopher Lemaire]. "They brought an incredible designer — a young Parisian designer who suddenly reinvented the expression of the brand without losing its value to fit new customers. Iconic brands, such as Abercrombie & Fitch, Dior and Lacoste, have the potential to reinvent themselves by translating the power of their value to a new generation," he said.

Meantime, some brands can't seem to get over their identity problems.

"Gap is an iconic brand. I think they've watched as the world passed them by, like Levi's," said Gobé. "Gap stayed too generic. When the market was becoming more individualistic, instead of focusing of differences, they offered everybody khakis."

Some market observers believe a total overhaul of the product and the in-store experience could do wonders for Gap.

But often the pressures of Wall Street won't allow a brand the luxury of starting over, going down a different path and taking on a new identity. "It's a hard play today. [The Gap] really has to take a risk and not be afraid to make changes. Wall Street won't let them do it. If they miss a season...you're trying to repeat what you think will work. You think about business not as a retailer, but as a brand manager," he said.

In an effort to reach younger customers and counter sliding profits two years ago, St. John dramatically changed the product's fit and its advertising campaign and began a new image campaign featuring Angelina Jolie. The sudden changes created too much of a jolt, hurting business and alienating longtime customers.

"The misconception is advertising is going to fix all the problems. That's not happening. You really have to get your product right," said Gobé.

Gobé believes that Hilfiger has the ability to reinvent itself because of its name recognition and connection to music. "It's a huge opportunity. Tommy is a great brand," said Gobé, particularly with its "dynamic connection to music."

But he said Liz Claiborne, for example, needs to think about itself differently. "Liz Claiborne is a mythical brand. Martha Stewart has reinvented how the American woman looks at aesthetics through the catalogue, magazine and TV. They're creating a voice that's the new American voice," said Gobé."Liz Claiborne needs to look at it that way. Martha Stewart created a cult. Liz Claiborne needs a great designer. Someone who's charismatic and can expand the brand to be more of a lifestyle brand in a Martha Stewart way. The quality of the voice and imagination of the voice is so relevant today. She has a bond with women."

Anne Klein is a company that seems to have nine lives. It has struggled with identity crises and has had a slew of designers spearheading the creative direction of the brand over the years. Today, it is once again in the midst of reinvention.

"It's been about five years since the acquisition [by Jones Apparel Group] and we have taken our time to do everything that needs to be done, evaluating the brand and retail opportunities, and finding the right designer," said Stacy Lastrina, executive vice president of marketing and creative services at Jones. The company hired Isabel Toledo, who presented her first collection for the brand in February, and so far, it's off to a good start. The company went back to past collections and built on that. "I tried to invoke it with innovation, with good cuts, things that I have felt you owned forever," said Toledo, who is also working with the designers in other Anne Klein divisions to give the overall brand aesthetic consistency.

Marketing professors agree that it's difficult to reinvent a brand that has lost its way.

"It's a truism that it's hard to effectively position a brand, it's even harder to reposition it," said Steve Hoch, professor of marketing at the Wharton School of the University of Pennsylvania and director of the Baker Retailing Initiative.

He pointed to two brands that were totally left for dead — Lacoste and Puma — which successfully made a comeback. "Puma decided not to be so athletic and Lacoste repositioned itself." He pointed out that some brands simply come back into style, but that's called nostalgia. "Look at firms such as Frye Boots and TopSiders," he said. "They've managed to reinvent themselves."

He said when a brand is hurting, it needs to figure out how to reposition itself. But often the brand comes with a lot of excess baggage that goes deep. He said Levi's is in drastic need of reinvention, but there's a strong nostalgic feeling for the brand, which makes it difficult.Hoch said the Gap is in need of a jolt. He thinks that perhaps some private equity player will come in and close a lot of stores to get it humming once again. He said it needs more than a Band-Aid. He believes that Gap has tried really hard "but just hasn't done enough to make it work."

Marketing experts point to Burberry as a classic case of reinvention.

When Rose Marie Bravo took over Burberry in the Nineties, the company revamped its brand image, hiring new designers who took the signature plaid from raincoats to bikinis. "It clearly held on to its heritage and repositioned itself, too. It stretched out and said, 'we have the right to put our brand on more types of product,'" said Hoch.

Regarding Tommy Hilfiger, Hoch explained, "There's a brand that really got huge, but lost control of itself. They live and die by the sword." It's the case of a brand that's doing well in Europe, but having problems in the U.S., he said.

Some retailers have also been able to reinvent themselves but it's more difficult with multicategory retailers. He said J.C. Penney is one of the few. "They said, 'Kohl's is kicking our brains in,' and Federated and May are trying to work things out, and saw an opportunity. Kohl's borrowed brand equity from people who have it. They cut out department store amenities and charged lower prices," he said. Years ago, Jay Baker [of Kohl's] couldn't get people to sell him a brand, but now companies have gotten over that hump, he said, noting that designers such as Ralph Lauren and Vera Wang have deals with Kohl's.

"Brands are more sophisticated," Hoch said, pointing to Lauren and Clinique that have done lines for Kohl's, without the parent identification. "It's subtle enough, without screaming the main brand."

But in department stores, Macy's Inc. is having its problems absorbing its acquisitions and carving out a new identity for itself even as it chases exclusive brands, such as its deal last week to be the exclusive store for Tommy Hilfiger apparel.

"No matter what, you have to absorb some pain before you have some gain," said Hoch. He said he respects Terry Lundgren, chairman and ceo of Macy's Inc., and what he's doing with Macy's. "But as a public company, it will be interesting to see how committed to the course of action he'll be, or will they have to backslide. If they change too fast, that could be a problem," he said. "How do they make the commitment to brand-based advertising if they have to run promotional ads?" he asked.Harry Bernard, executive vice president and chief marketing officer at Colton Bernard Inc., a San Francisco-based consulting firm, said Mickey Drexler has been reinventing J. Crew brilliantly. "He understood and read the market. He began to move forward with the kind of product, image and message that made sense to that customer," said Bernard.

Since J. Crew was a private company when Texas Pacific Group owned it, Drexler was able to reinvent and reposition the retailer without dire repercussions. His strategy was to invest in the right product and inventory and reinforce the merchandise the company believed in. The chain completely turned itself around and had one of the most successful initial public offerings in retail history.

Since it went public at $20 a share in July 2006, J. Crew's stock has appreciated to as high as $57.17, and closed Monday at $37.10. The company, with a market capitalization of $2.3 billion, continues to show impressive improvement year-over-year, with a sales increase in fiscal 2006 of 21 percent and operating margins up 2.6 percent.

Tim Calkins, professor of marketing at Northwestern University's Kellogg School of Management, said, "You continually see in the world of branding that some stay relevant and some really struggle and fall flat." He believes there's no simple solution to reinventing a brand that's gotten tired.

He said there's a delicate balance when it comes to reinventing a brand because you can lose the core customer and you're not credible for new people. "The challenge is to stretch a brand while remaining true to its essence."

He pointed to Coach, which had become tired and successfully reinvented itself with an upgrading of merchandise, more contemporary designs and a slew of new products. Under Reed Krakoff, Coach's president and executive creative director, "they've been able to stretch that brand and make it interesting too. It's important that the brand is still relevant to consumers," said Calkins.

"Every brand ebbs and flows. There are times they do really well and times they struggle. Great brands continue to keep themselves relevant," said Calkins. "Nothing says a fashion brand can't live for 20 to 30 years. I don't think a brand can grow forever. Eventually you run out of space to be who you are. You're spread too far. You inevitably trade down in pricing and go into licensing deals that stretch the brand too far. What a brand needs is energy investment and an understanding of what makes it different."

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