Koos Manufacturing Inc.’s continuing evolution from private-label bottoms maker to full-fledged branded jeans marketer is about to go one step further.
This story first appeared in the May 15, 2013 issue of WWD. Subscribe Today.
Koos, the South Gate, Calif.-based firm behind AG Adriano Goldschmied and Big Star jeans, has brought on Mark Wiesmayr in the new post of design director for the AG brand.
The top priority for Wiesmayr — a former design director for Levi Strauss & Co., denim director at Sass & Bide and chief executive officer and denim director at Ksubi — will be to elevate the AG assortment’s tops business, currently just 10 percent of the total but poised to grow.
“Mark’s challenge is to marry the tops and the bottoms into something seamless,” said Samuel Ku, vice president and creative director at AG. “Our biggest single opportunity right now is to build AG as a tops and bottoms collection that remains denim-focused with everything we do ‘denim friendly.’ We’re not just talking about the right denim or chambray shirt, which is certainly our biggest opportunity within tops because of their close association with jeans, but also the right cut-and-sewn knit and the right outerwear.”
Wiesmayr reports to Ku.
Unlike a number of upscale denim brands, AG isn’t rushing into tops as it races the clock against the timing of a retail rollout. In fact, the privately held company has scaled back its retail operations to 11 stores, about half the peak level, as it has weeded out unprofitable units. Its Japanese distributor operates an AG store as well.
“We’re in New York and Los Angeles, and there are a few markets, like San Francisco, Miami and St. Louis, we’d consider, but our growth has come from wholesale and we see it staying that way,” said Ku. “The easiest way to show growth is sometimes by rolling out a lot of stores, but that’s a high-risk proposition.”
Even more so for Koos, which is owned and led as ceo by Yul Ku, Samuel’s father, and dependent on cash flow for growth. With sales estimated by industry sources to be more than $100 million, Koos is believed to be the largest U.S. jeans company privately owned by a single party, the younger Ku said. “We have the operating cash to do what we want to do and all the things we feel are necessary. We’re fast moving and can make decisions pretty much instantaneously.”
For years a reliable bottoms maker best known for private-label corduroys, Koos has been gravitating toward a branded orientation for more than a decade and took its biggest step through its partnership with designer Adriano Goldschmied to market AG in 2001. However, Goldschmied himself left in 2004 with Koos securing control of the brand.
AG does about two-thirds of its business in women’s and about 90 percent of the women’s component is in bottoms, with about 60 percent of the bottoms business in denim.
“We’ll still touch on color and colorblocking and prints, but there’s no question that there’s a very big thirst on the part of consumers for authentic denim these days,” Ku noted. “We never strayed from vintage looks and have always sold them well. But the market is coming back to that now, and for both AG and Big Star, it really plays to our strength.”
While the more novelty looks will recede slightly, returning to more historic norms, there is strength in somewhat less conspicuous novelty looks, such as jacquard-weave jeans. Most of the denim in the AG line comes from Japan, although the firm outsources fabric from Italy, and in recognition of its growing importance for both higher-end basics and novelties such as coated fabrics, a growing percentage is coming from Turkey.
Production is vertical and split between owned facilities in South Gate and in Mexico, and with 10 laser machines in California and 18 in Mexico, the firm has made large investments in laser and ozone technology and water conservation in both locations. An audit showed a 30 percent reduction in water use in the past few years, and the firm remains on the lookout for procedures and hardware that can reduce its impact on the environment.
Ku, however, doesn’t see this as an especially marketable element of the AG story, even with AG’s jeans retailing in a range of $160 to $220 at better specialty and department stores.
“Consumers want to look good, and they’ll invest their dollars in products that help them do that,” he said. “As a company, we’re still not at the point where we’ve, for instance, completely gotten rid of hand-sanding, but I also don’t think we’ve gotten to the point where buyers or their consumers are all that aware of it.”
As trends develop and dissipate, Ku says he remains dependent on a three-word mantra in steering AG through a changing market. “Chic, sophisticated and class. Everything we do has to fall within those words. We aim to make clothes that you could wear five years from now without embarrassment, or look at a picture of yourself in them from five years ago and not feel like a dork.”