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Premium Shakeout Leaves Room for Small Brands

The rise of some of the biggest premium denim names has been spurred by retailers concentrating their assortments on a core group of brands.

The rise of some of the biggest premium denim names has been spurred by retailers concentrating their assortments on a core group of brands. With several of those labels now saturating the market, opportunity is again knocking for newer and smaller brands.

This story first appeared in the February 7, 2008 issue of WWD.  Subscribe Today.

Although owners and buyers from denim boutiques are constantly seeking the latest brands, many were burned in recent years by fly-by-night lines looking to cash in on the premium denim craze. As a result, they pared down the number of lines on their shelves and retreated to those labels that could assure consistent quality, delivery and, above all, sell-through.

Women’s Jeans Sales
2007
2006
% Change
Under $25
$814.8M
$898.5M
-9
$25-$49.99
$544.3M
$589.7M
-8
$50-74.99
$130.4M
$130.4M
0
$75-$99.99
$82M
$61.8M
33
$100-$124.99
$22.4M
$23.6M
-5
$125-$149.99
$65.9M
$82.2M
-20
$150+
$181.8M
$115.5M
57
NOTE: DATA IS FOR DEPARTMENT AND NATIONAL CHAIN STORES ONLY. SOURCE: THE NPD GROUP

In the premium denim shakeout over the last year or two, labels such as Seven For All Mankind, Citizens of Humanity, True Religion, Paige Premium Denim and Joe’s Jeans solidified their positions as bedrock brands. But premium denim continues to command consumer dollars and retailers are seeing customers with a renewed interest in picking up smaller and lesser-known labels.

The denim market has become more segmented, particularly in the more-than-$100 price ranges, according to market research firm The NPD Group. Sales of women’s jeans priced between $100 and $124.99 at department and national chain stores fell 5 percent to $22.4 million in 2007. The decline was even steeper in the $125 to $149.99 price range, with sales plunging 20 percent to $65.8 million last year. However, the highest reaches of the premium spectrum are bucking the trend and represent the fastest-growing segment of the denim market. Sales of women’s jeans priced at $150 or more soared 57 percent to $181.8 million in 2007.

Sheryl Blit, the co-owner and buyer for Havana Jeans, which has stores in Scarsdale, N.Y., and Stamford, Conn., said she understands the desire among retailers and customers to be loyal to the brands that have been proven performers. Blit cited labels such as Joe’s, Citizens, Seven For All Mankind and J. Brand as some of the top sellers to which her customers gravitate.

“If you have a woman who loves Citizens or J. Brand, she wants to see the new styles of that company,” Blit said.

She’s also aware that brands such as Seven For All Mankind are increasingly getting more exposure and will widen their distribution, forcing her to find fresh labels for customers. Blit recently brought in Earnest Sewn and already has seen signs that the label is winning with customers.

“I see making a little more room [for new brands], but it’s very competitive,” Blit said. “Everybody wanted to be in the jeans business, but I find only the strong people are still surviving it.”

Lawrence Scott, owner of Pittsburgh Jeans Co., said he has seen labels such as Anlo, Genetic Denim, Aristocrat, 18th Amendment and Bishop of Seventh claiming more shelf space in his store. His best performing newer brand has been Pierce Jeans.

“The fit is impeccable,” Scott said of Pierce. “I can give a customer one pair of Pierce and they walk out with it.”

Smaller brands tend to make their mark with one particular style, he noted.

“They either get it or they don’t, and if they don’t they don’t get many second chances,” he said.

Scott said he sees customers again looking for something different.

“A lot of the feedback I’m getting is a customer saying ‘I don’t need another one of that brand,'” said Scott, adding that this is particularly true with labels that have well-recognized logos or other details. “Identifiable details, they become a status symbol, but how many of one jean can you have.”

Helen Kim, director of operations for National Jean Co., is also seeing brands make their mark with one strong style. National Jean Co. has 13 stores and is slated to open two more this year. Anlo and Raven have been standout new lines for the chain, producing popular trouser-leg styles. Kim often looks to slowly build a brand off an initial style.

“If the company’s doing six different fits, you’ll probably take two or maybe three if it’s never been tested,” Kim said. “You keep it small and tight so you can track it.”

Like Havana Jeans, National Jean also recently brought in Earnest Sewn, which is generating a similarly positive response. Kim said that after only three weeks she’s having trouble keeping the label in stock.

“That’s a company that tweaked their fit and their washes….They made some changes at the company and made some big changes as a product,” she said. “We’re standing behind that and doing well with them.”

Kim said Paige, J. Brand, Joe’s, Seven For All Mankind and Citizens are among the chain’s top sellers, and she believes that, despite their wider distribution, retailers can still find ways to win with them by picking the right product for their customer base.

“Keep the product special, it’s supposed to be premium denim,” she said.

Kim added that the company is in talks with some of its larger vendors to provide the chain with exclusive styles and washes for fall in order to rebuild interest around the brands.

Owners of smaller brands that have weathered the storm over the last couple years find themselves well positioned for this next phase in the premium denim life cycle. Michael Silver, president of the 1921 premium label, has seen an oversaturation among the top brands.

“We were kind of waiting for the boringness of just a few suppliers to hit the consumer and I guess it’s finally happening,” Silver said. “When distribution gets so wide the premium customer gets put off by just about everybody wearing that brand that had some status to it.”