Realizing that it costs money to make money, brands are beefing up budgets and devising creative strategies to make the best of trying times.
This story first appeared in the January 7, 2009 issue of WWD. Subscribe Today.
For instance, marketing is key for Hudson Jeans, a premium denim line based in City of Commerce, Calif. Peter Kim, Hudson’s president and chief executive officer, said he intends to increase sales by 30 percent in the new year from more than $66 million last year through “an aggressive sales pitch.” At the same time, Hudson will cut costs on back-end operations, including shipping, production and inventory.
“We’re still spending on sales, marketing and p.r.,” Kim said. “The ‘touchy-feely,’ intangible stuff [like branding] is as important as the product.”
Mek Denim Inc., a Los Angeles-based producer of jeans retailing between $135 and $210 at stores like The Buckle and Nordstrom, will kick off the New Year with its first consumer ad campaign. This push is part of a cautious approach to promoting the brand. The three-year-old firm began advertising in trade publications last June, and this year plans ads in magazines including US Weekly, Lucky, In Style, Maxim and Details. But the company noted the ads will be focused and strategic, appearing in denim-centric issues.
Three Dots, a knitwear company that employs more than 200 workers in its 70,000-square-foot factory in Garden Grove, Calif., hopes its growing portfolio of products will boost sales in 2009. Known for its T-shirts and dresses cut out of cotton and Modal, Three Dots intends to offer more pants and skirts in heavier knits like ponte, and reclaim its stake in the men’s market and maternity category next year. While it stopped producing men’s in the U.S. in 2007, maternity wear is available domestically at certain specialty stores, and the company wants to widen its scope.
Three Dots also caters to price-conscious customers with a large selection retailing under $100. For example, it lengthened several of its tanks and T-shirts, turning them into dresses, without significantly raising the price. “We’re really trying to offer our customer the best price possible,” said Sarah Angell, Three Dots’ executive vice president. “We’ll hopefully continue to make our brand recession-proof.”
A healthy work environment also is important for eco-friendly T-shirt line Multeepurpose. Founded in 2006, Multeepurpose decided to stop embellishing its tops with velvet flocking because the trim was made of petroleum-based microfibers that can float in the air and be breathed in by the workers. Instead, the company invested in expensive technology to do water-based digital T-shirt printing.
Multeepurpose also searched for alternatives for retail distribution, such as linking with large social networking sites and selling merchandise at music festivals. It also plans a store in Los Angeles’ Little Tokyo neighborhood. Designed as a cross between Urban Outfitters, Starbucks and Kinko’s, the shop will allow customers to sip tea, surf the Web on a WiFi connection and print T-shirts.
“Obviously, we know that [traditional] retail is hemorrhaging,” said Jeff Toolan, co-founder of Los Angeles-based Multeepurpose. “In our mind, there are a lot of points of sales.”