WWD.com/globe-news/denim/kensie-expands-under-claiborne-1881488/
government-trade
government-trade

Kensie Expands Under Claiborne

It’s been almost three years since Liz Claiborne Inc. purchased two small Vancouver-based contemporary brands called Kensie and Mac & Jac.

The Macy’s Herald Square shop-in-shop for Kensiegirl opened last month.

It’s been almost three years since Liz Claiborne Inc. purchased two small Vancouver-based contemporary brands called Kensie and Mac & Jac. Today, many labels under the Liz umbrella are suffering, but Kensie is a bright spot.

This story first appeared in the December 9, 2008 issue of WWD.  Subscribe Today.

These companies may not have been considered power brands at Claiborne in 2006, but analysts agreed the acquisition would do wonders for the company’s desire to strengthen its contemporary apparel segment. They said at the time that the labels would most likely pick up steam and sit well alongside the group’s subsidiaries, Juicy Couture and Laundry by Shelli Segal (which Claiborne sold to Perry Ellis International last year).

Back in 2006, the purchase price of the labels — which included the retirement of debt at closing — was estimated to be $23.6 million, plus additional payments based upon a multiple of Mac & Jac’s earnings in fiscal years 2006, 2008, 2009 and 2010. Mac & Jac, the larger of the brands at that time, generated net sales of approximately $40 million in fiscal 2005.

Today, of course, the story is a bit different. While Mac & Jac remains strong, selling in major department and specialty stores, Kensie is rapidly gaining ground. The brand, which launched 10 years ago as a contemporary knitwear resource, is now a full contemporary sportswear brand complete with 10 Macy’s shop-in-shops, 25 shops at Dillard’s and two freestanding stores in Hong Kong, with more shops in the works. In total, the brand is sold in 1,500 specialty doors and 400 department store doors.

But that’s just part of it. Kensie’s two-year-old sister label, Kensiegirl, is also picking up steam. The junior label, which wholesales between $15 and $35, is opening up shop-in-shops, the first of which landed at Macy’s Herald Square last month. That shop has prime real estate on the junior floor, with 1,700 square feet of selling space. There are three more Kensiegirl shops planned to open in early 2009.

The secret to the success of Kensie and Kensiegirl, said Eric Karls, a founder, president and chief executive officer of the brand, is a combination of efforts — consistent on-time deliveries, providing on-trend merchandise and a low price point on the contemporary floor (Kensie wholesales for between $25 and $40).

“We have had tremendous expansion in the last year and a half,” Karls said. “We have been very fortunate to experience this in this economy.”

While Karls declined to comment on exact volume figures, he said the company has experienced between 25 and 30 percent growth over plan per week at retail with Kensie — which is pushing him to get even more product on the floor, fast. Karls said he has just signed a license with the New York-based Aimee Lynn Accessories for handbags, which will launch in the spring. There’s also a licensed line of shoes, cold weather accessories and eyewear for Kensie, and to add to the mix, Karls said he is in talks to introduce a denim line, home and swimwear. In addition, Karls has launched Kensie Dresses at retail for holiday, which he said is performing above plan.

“We’ve gone from evening to daytime with the dresses and at $120 to $150 at retail, we’ve hit a sweet spot on the floor,” he said.

For Kensie, Karls said, the biggest area of growth will be international. He is planning to open Kensie shops in Sears Mexico and is looking to open shops in Chile, South Korea and Russia and will launch in Europe next year at the Bread & Butter trade show. Stateside, Karls said he plans to open three freestanding stores next year, but has just begun scouting locations.

While Kensie and Mac & Jac were two of the 14 brands Liz Claiborne put under review last year, William L. McComb, ceo of Claiborne, said in March that the company decided to keep the firms. In mid-August, McComb called the Kensie brand a “business that has its mojo,” and one that will continue to expand.

“This is really about the Kensie brand,” McComb told WWD. “The brand is profitable and growing and our accounts like it.”