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Silver Jeans Co. is making the leap into retail.
This story first appeared in the May 16, 2012 issue of WWD. Subscribe Today.
The Winnipeg-based jeans firm with a 70-year heritage in the denim business has hired Denise Norkus, formerly of Betsey Johnson’s retail unit, as vice president of retail, and plans to begin opening stores early next year. It anticipates a fleet of 25 to 30 stores in the next five years and 50 in the course of the next decade.
The company already operates one store — a 1,900-square-foot unit that opened at Park Meadow Center outside of Denver in 2008. Subsequent stores are expected to measure between 1,600 and 2,000 square feet, according to Michael Silver, president of the company.
“When you start out in the dark and ugly summer of 2008, in the depths of the recession, we’re pretty happy that store has been able to break even,” Silver told WWD. “It taught us a lot, like that we needed to sharpen our brand message and our marketing if we were to do retail properly.”
With that task largely completed — and a brand message established that revolves around youthful fun and camaraderie — Silver said the next investment wasn’t in brick and mortar but in people.
“We were looking for a Sherpa to lead us to the top of Mount Everest,” he said. “We knew what the Himalayas looked like but didn’t know how to get there.”
Norkus, who reports directly to Silver, was vice president of retail at Betsey Johnson LLC, which last month filed Chapter 11 and closed most of its stores. She’d previously consulted for Levi Strauss & Co., served as vice president of store operations at Walt Disney Co. and worked in various capacities for Gap Inc.
Darren James, also a veteran of the Betsey Johnson and Disney organizations, has joined Silver as senior director of operations, reporting to Norkus.
Silver said that Norkus will have responsibility for the retail unit’s financial results, site selection, store design and all elements of merchandising. The company currently is in talks with a number of architectural firms, seeking a service that can “help us establish a fun, modern environment that plays to our values, including our heritage of making blue jeans since 1921.”
A division of the family-owned Western Glove Works, the Silver brand was inaugurated 20 years ago. While it’s had licensees in the past, it currently offers jeans, pants, knit and woven tops and sweaters that are sourced in-house. “Again, we stopped licensing for the same reasons we didn’t develop retail earlier,” Silver said. “We’ll open with an assortment of great bottoms and sportswear, and we plan to augment that with accessories and related items from other great brands.”
A return to licensing the Silver brand is among the possibilities under consideration, and Silver noted that certain items within the assortment could be exclusive to either the wholesale or the retail operation.
Silver’s central Canadian location — Winnipeg is about 150 miles north of Grand Forks, N.D. — is reflected in its retail distribution, which includes substantial programs with retailers well represented in the central U.S., including Buckle and Maurices. As the real estate strategy for Silver’s stores comes together, Silver envisions strong representation in malls in the American Midwest and greater reliance on freestanding locations in the urban population centers on the West and East Coasts.
“We’re at the beginning of a careful, meticulous process,” he said. “This will force us to evolve as a brand, to deal with a lot of different issues we didn’t have to deal with as a wholesaler only.”
Even with the substantial up-front costs involved in opening and operating a retail network, companies that veer into retailing from a wholesale base often point out that by removing a degree of separation between themselves and the end consumer, their merchandising and marketing skills become sharper and they, in essence, become better suppliers for their retail accounts. Silver shares that view and also sees the initiative as a test of the brand’s readiness to compete in the global arena.
“We’ll start with stores in the U.S.,” he said. “There are no immediate plans for Canada, but this very well could be a stepping stone for us as we consider Europe, Asia and South America.”
Right now, international distribution is spotty, accounting for only about 5 percent of the company’s $160 million in annual sales, with most of the global piece concentrated in Germany, Austria, the Benelux countries and Japan.
“To move into other markets, you can’t be viewed as a resource for blue jeans and tops,” Silver said emphatically. “You have to be viewed as a real lifestyle entity.”
Pressed for examples of firms that have made such a transition, he cites Guess as “a significant player that has the attributes I look up to. They have wholesale, and they have retail. They have licensing and international. They’re in mid to high price points that don’t alienate high street customers and, at the same time, appeal to aspirational ones.”
Silver considers retail as a complement to a growing wholesale business, just as he sees increases in men’s, now up to 25 percent of the business from about 15 a few years ago, as an add-on to a growing women’s wholesale business.
“We see a strong future in retail, as we do in wholesale,” he said. “We’ve got a lot of planning and work to do, but the water level is rising here.”