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Brooks Brothers Faces Challenges With Millennials

Paulette Garafalo admitted that there was still a disconnect with younger consumers in their 20s and 30s.

NEW YORK — Brooks Brothers opened its Flatiron Shop — a store concept skewed to a younger customer — in 2011.

Three years later, the company is still finding its footing with the Millennial consumer.

At a presentation at the Retail Marketing Society Thursday, Paulette Garafalo, the retailer’s president of international, wholesale and manufacturing, admitted that there was still a disconnect with younger consumers in their 20s and 30s. “We are not where we want to be,” she said. “We are at the beginning.”

For fall, Brooks Bros. will offer a full collection for the first time under its Red Fleece label, a line with a fit and sensibility designed to appeal to a younger shopper. The Flatiron Shop in New York carries mainly Red Fleece, and Brooks Bros. also operates two Flatiron Shops in Italy. In Japan, five Red Fleece in-store shops are expected to be added and the company is looking for a flagship in South Korea.

That aside, Garafalo stressed that the retailer’s domestic and international brick-and-mortar stores remain extremely profitable. In Japan alone, sales in 2013 were $180 million, up 15 percent. The company will continue to open 30 to 40 flagships across the globe for the next four years, but that pace will begin to slow as Brooks Bros. focuses more on e-commerce.

Garafalo said there was a clear understanding within the company that e-commerce will inevitably grow and requires attention. Right now, brooksbrothers.com generates 15 percent of the company’s business.

Last August, the firm hired Vivien Kronengold as its chief marketing officer to ramp up the digital business.

“We believe she is going to be a powerhouse,” Garafalo said. “Social media is one of her major challenges and how to build that. Her first challenge will be how to build the brand and give it an emotional tie to the customer. We are spending a lot of time and money in the marketing of the business.”

In the past few months, Garafalo said the company also hired social media community managers for its Milan, Hong Kong, Japan, South Korea and Latin America markets.

Today, Brooks Bros.’ Twitter handle had more than 49,400 followers; its Instagram had more than 36,570.

“The digital strategy is very complex, and there’s a lot of difficulty with it but we’re continually having meetings about how to approach it,” Garafalo said. “We don’t even have our app done.” Noting that the mobile application market is forever changing, Garafalo said Brooks Bros. will look outside the company for help. “Outsourcing the app will be critical as we cannot develop these internally,” she said.

Though Garafalo acknowledged the company’s uphill battle, she maintained that in order to succeed, the company will capitalize on its 196 years of history.

“Brooks Bros. has one opportunity that is still unique if we can hold our place with our classification business,” she said. “We do classification product very well. A lot of brands want to be lifestyle. We’re not ashamed to be the polo, chino, the shirt [expert], and even the 25-year-old buys our traditional non-iron shirt. Brooks Bros. is an American tradition but we can lose the positioning if we don’t do it right.”