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The Rush To Better

<b>T</b>he recent dispute between Jones Apparel Group and Polo Ralph Lauren Corp. over the lucrative Lauren by Ralph Lauren line, combined with Kellwood Co.’s win of the lucrative Calvin Klein women’s sportswear license last month, has put...

The recent dispute between Jones Apparel Group and Polo Ralph Lauren Corp. over the lucrative Lauren by Ralph Lauren line, combined with Kellwood Co.’s win of the lucrative Calvin Klein women’s sportswear license last month, has put the better sportswear market in the spotlight.

The rush to invade the better market stems from a perceived opportunity in the lower-priced apparel arena, where Lauren by Ralph Lauren held enormous real estate at department stores across the U.S. for several years, representing the most successful transition of a designer label into that price point until the dispute between Jones and Lauren put its future into question.

Striking while the dominant player is regrouping from the attack —?in which Jones walked away from the line and both companies sued each other — has become the industry’s latest craze. Several companies with an eye on volume are scrambling to strike in the better market, including designers like Michael Kors and Marc Jacobs who are looking for new licenses, while Oscar de la Renta is also said to be negotiating with J.C. Penney for a new moderate-to-better line.

Jones said it will develop a Jones New York lifestyle line for the better area that will be priced less than Lauren’s collection, and Liz Claiborne, which holds tremendous real estate in stores with its $1.6 billion signature line, is gaining momentum with its City DKNY license.

“Why should fashion be barricaded by a price point?” Jeffry Aronsson, chief executive officer of Marc Jacobs, said in a recent interview. “We know it’s a huge potential opportunity for us and that it’s something that would be considered right in its own time. When you look at a jeans potential and one that would be more accessible, one can imagine what an enormous potential that would be and one wishes to be very thoughtful that the timing is correct.”

As for the better-priced Marc line, some industry sources have pointed to a launch in the latter half of 2004. Aronsson has stressed, however, that it’s not so much about when a deal might come about, but more about finding the perfect candidate for the job.

“It’s not so much about the nationality as it is the absolute best and right candidate, and it might mean different arrangements, depending on where [the company] is and how production translates into price in the location of the point of sale,” he said. “There are several choices in the world and one wants to be absolutely certain that it is the best choice.”