VF predicts the vertically integrated firm, which it bought last week for $110 million, can grow to at least a $350 million business from its current $57 million in annual sales, driven by opening at least 20 stores a year for the next 10 years.
Combined with its existing 50 units, that would bring Lucy's door count to at least 250 in a decade. Key areas for growth include the corridor between Boston and Washington, as well as clusters in the Midwest built out from Chicago.
"It could go faster than that, sure, but we need to prove out the model," said Eric Wiseman, VF's president and chief operating officer. "They started on the West Coast and as they've moved East, they haven't seen any stop signs. They've just seen 'go.'"
There are also e-commerce growth opportunities for the company, which was started as lucy.com in 1999 by Nike alum Sue Levin. The Portland, Ore.-based firm thrived during the Internet boom, but in 2001 shut its Web site and shed the majority of its 100 employees. The privately held company hired Mike Edwards as chief executive officer in 2004 and has been growing as a retailer ever since. Today, Lucy takes in 5 percent of its sales from its Web site.
VF, based in Greensboro, N.C., inked the deal to buy Lucy the same day it acquired Seven For All Mankind for an estimated $775 million. The two acquisitions form the foundation of the new VF Contemporary Brands division. While Lucy has the lower profile and is the far smaller of the two acquisitions, it still will get the full treatment for which the $6.21 billion apparel giant has become known.
Lucy's management team is expected to stay in place. Edwards will continue to run the business and will report to Mike Egeck, ceo of Seven For All Mankind and a former VF executive who will be named president of VF Contemporary Brands when the deals close, likely at the end of August.
"I really like the fact they allow their brands to be independent and be very innovative around their customers," Edwards said. "They've made it perfectly clear they want to retain this management team 100 percent and at the same time, they bring a host of resources and infrastructure to our company that it would have taken me years to create. So long-term we can focus on product."Edwards told WWD in May that he was open to pursuing an initial public offering or being acquired, particularly "by a strategic player with infrastructure already built." He contacted VF earlier this year and, according to Wiseman, Lucy's direct-to-consumer platform and status as a growing women's lifestyle brand appealed to the apparel conglomerate, which counts brands such as Wrangler and The North Face among its portfolio.
"We are a perfect fit for the VF portfolio," Edwards said. "We bring a certain expertise in managing better women's lifestyle brands that should help some of their other brands as well."
While the VF brand Reef appeals to the surfer, its Vans to the skateboarder and North Face to the outdoors aficionado, Lucy targets the wellness-oriented female, Wiseman explained. "Synergies with other brands was not a driver of the acquisition at all," Wiseman said. "Our focus will be building the Lucy brand through the Lucy stores, but if Mike and his team want some of our other brands for the stores, we are open to working with them."
Lucy stores already carry Reef, which saw business with the company soar more than 70 percent this year over last, according to Edwards, who added he "sees great synergy with North Face as well." More than 80 percent of Lucy's sales come from its own label, and the rest comes from Reef, Nike accessories, Splendid and Prana, which has led some analysts to speculate the Liz Claiborne-owned Prana could be another possible acquisition target for VF.
But Wiseman said VF has not discussed buying Prana, which Claiborne recently put on the selling block, nor did it look at Lululemon, which had an IPO last week. Women's brands, and specifically contemporary labels, will likely take precedence over activewear as a sector where VF is trying to expand. As always, Wiseman said, VF is open to acquiring "when the right company becomes available."
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty