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Victoria Creatiions Reduces Prices, Expands Items in Lagerfeld Line

NEW YORK -- Victoria Creations wants to reach a wider audience with its licensed Karl Lagerfeld jewelry line.<BR><BR>Prices have been lowered substantially, and selections have been broadened, according to Pat Stensrud, president of Victoria...

NEW YORK — Victoria Creations wants to reach a wider audience with its licensed Karl Lagerfeld jewelry line.

Prices have been lowered substantially, and selections have been broadened, according to Pat Stensrud, president of Victoria Creations.

“Initially, the Lagerfeld jewelry line was priced and styled to attract a specific customer, one who shopped the very highest end of the costume jewelry market,” Stensrud said. “The line’s identity was about shouting the Lagerfeld name and image — and making a statement in a very sophisticated way.”

But now women are expressing their fashion choices in more subtle ways, she said. As a result, new groups of merchandise were added to the established collection. The new collections feature color and fashion-forward styling, while continuing the label’s signature items marked by the use of matte gold, pearls and black accents.

The new looks make up 70 percent of the line, the signature group 30 percent, according to Stensrud.

The company is also looking for wider distribution through lower prices. The wholesale price range has dropped to $11-$43, from $23-$135.

Stensrud added that the company’s goal is to double the number of U.S. department stores to which the collection is distributed by the end of the year, bringing the total to about 200.

Along with the new products, the line’s merchandising and display materials have also been updated. In the past, the line was presented mostly in cases at retail, but Victoria has added top-of-counter displays for earrings and bracelets.

Carded items, such as earrings, are displayed on new cards that can be folded into ready-made gift packages featuring a vintage Paris street map.

Even the designer’s logo has been changed from a full name written in script to a clean and bold, block-lettered logo that uses just his last name.

Victoria Creations also produces the Givenchy and Richelieu jewelry collections, as well as private label lines, including Worthington for J.C. Penney Co.

Stensrud declined to give any sales projections for the revamped Lagerfeld line. Victoria Creations has been seeing improved results on its bottom line of late. In its third quarter ended March 31, it posted an operating profit versus a year-ago operating loss, a sharply reduced net loss and a 17.5 percent sales gain.

The operating profit came to $442,000, against an operating loss of $949,000. After interest expense, amortization of goodwill and income taxes, the company had a net loss in the three months of $100,000, compared with a loss of $1.8 million in last year’s quarter. Sales rose to $10.6 million from $9 million.

For the nine months to March 31, the company had an operating loss of $369,000, compared with an operating loss of $657,000 in the same period a year earlier. The net loss narrowed to $2 million from $3.3 million and sales were up 2.5 percent, to $31.3 million from $30.5 million.

The firm noted that although there was a net loss in the nine months, cash flow from operations was positive and the net cash was used to reduce debt.

Victoria Creations is 79 percent owned by United Merchants & Manufacturers.