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What to Watch: The Young Ones

In the past ecade,a trio of independent jun- ior jeans brands rewrote the rules of the mod- erate segment.<br><br>By aggressively chasing fashion trends and offering retail prices below $30,LEI,Mudd and Paris Blues developed products and brands that...

In the past ecade,a trio of independent jun- ior jeans brands rewrote the rules of the mod- erate segment.

By aggressively chasing fashion trends and offering retail prices below $30,LEI,Mudd and Paris Blues developed products and brands that were highly desired by teens.While teens are brand-conscious,they proved they ’re not above trading own from status names if they can get two pairs of jeans for what they ’ve been paying for one.

They attracted a score of competitors, including Bongo,Zana-di,Gloria Vanderbilt ’s Glo line and Angels. Angels in particular has gained ground in the past year,find- ing the right trends to catch the attention of fickle teens.Its sales this year are expected to come in at $70 million and management has set $100 million as next year ’s target.

But the competitive landscape changed in July, when the $4.1 billion Jones Apparel Group Inc.acquired LEI in a $385 million deal.That move has given the trendy brand — which had 2001 wholesale revenues of $248 million,with another $100 million worth of licensed products sold —added muscle in everything from sourcing to istribution to eal- ing with hassles like retailers ’chargebacks.

Looking to keep its position with the marker leaders,Mudd Inc.,with wholesale volume of $300 million including licensing royalties,this December launched its first TV ad campaign to increase its brand ’s profile.Mudd management acknowledged the move in part was intended as a bit of corporate muscle-flexing to set it apart from smaller competitors.

But Jones ’move likely has other major appar- el companies looking more closely at the prof- itable moderate branded junior jeans category.A key question on the minds of many who watch that market,as well as the executives at the head of companies like Mudd and Angels,will likely be wondering who will prove attractive acquisi- tion options to some of Jones ’brawny rivals.

“Not us,”said Lisa Engelman,president of sales at Paris Blues,which this year expects sales of about $140 million.”This is a family- owned business and the family works here.”