After being supplanted by retail heavyweight Terry Lundgren last year, Ralph Lauren and Giorgio Armani again sit atop the DNR Power 100 this year, in slots one and two, respectively.
Both of the design legends have helmed their preeminent luxury brands to record years in 2007. And both wield the many different aspects of power that we consider when compiling this annual survey: financial muscle, creative influence, star quality and industry stature.
Lauren and Armani are singular men’s wear figures, with deep roots and special clout in this arena. The same can be said for Richard Cohen, the Zegna veteran who returned to the men’s world—and this list—with a new job heading up Robert Talbott, after a short detour to the women’s business.
Making the biggest leap up the rankings is Eric Wiseman, the CEO-designate at giant VF Corp., whose ascent up the corporate ladder, and the DNR Power 100, has been sure and steady. Also making a big move: Claudio Del Vecchio, who has reenergized Brooks Brothers with the stylish gambit of hiring iconoclastic men’s wear star Thom Browne—an unexpected power play that has paid off handsomely for the venerable brand.
1. Ralph Lauren
It’s no secret that Ralph Lauren is having a banner year. Unless you’ve spent the last few months in media-free isolation, you have undoubtedly noticed that the chairman and chief executive officer of Polo Ralph Lauren Corp. is celebrating his company’s 40th anniversary, being flooded with tributes and landing on covers of magazines from Men’s Vogue to Fortune. His recent collections were hits, and Lauren took home not only the CFDA’s Menswear Designer of the Year Award, but also its first-ever American Fashion Legend Award.
But even these glamorous accolades should not distract from the impressive reality of a $4.3 billion machine running at full throttle. Net income surged 30 percent in the last fiscal year, thanks to “significant progress on all fronts, from opening new luxury stores to initiating steps to expand our accessories business in new categories, such as watches and fine jewelry, to taking direct control of our Japanese business and our Internet business,” Lauren said in the earnings statement. “I started this business 40 years ago with a tie and a vision about how people live. Today our brand’s reach has grown to more than 80 countries and now represents more than $10 billion in retail sales worldwide.”
This year the company positioned itself for even wider reach. It acquired its Japanese licensees. Stores launched in Moscow with much fanfare. The men’s wear labels—Polo, Purple Label, Black Label, RLX and RRL, and the golf and tennis lines—continued to crystallize.
One label still in its infancy is Rugby, which is for young men who can’t yet afford Polo. Rugby stores are strategically located near college campuses, and the entire concept is traditional-collegiate. Think rugby shirts and crested blazers in stores resembling a Harvard final club. The company this year began pushing it more aggressively—even selling it through Colette in Paris—and has plans to roll out many more, including international locations and online.
Next fall Ralph Lauren watches will debut, thanks to a joint venture formed this year with Switzerland’s Compagnie Financière Richemont, owner of such fine watch brands as Cartier, Piaget and Officine Panerai. Prices will start between $3,000 and $5,000.
But the biggest and most-anticipated debut next year will be that of the American Living collection, the first project of the company’s new Global Brand Concepts division, at J.C. Penney in the spring. The retailer is expected to devote some 5 to 10 percent of its floor space to the collection of men’s, women’s and children’s wear, intimate apparel, accessories and home goods. Last year’s rank: 2. Power prediction: American Living becomes a $1 billion brand within five years.
2. Giorgio Armani
Next week Giorgio Armani will fly to Tokyo to inaugurate his glinting Armani/Ginza Tower in the Japanese capital’s tony retail district. Spread over 12 floors, the 65,000-square-foot space will carry the Giorgio Armani, Emporio Armani and Casa collections, along with the brand’s first spa (in collaboration with his fragrance licensee L’Oréal), an Italian restaurant and a Privé bar. Not quite a year later he’ll find himself in a similar context but on the other side of the world when he opens an equally impressive, 47,000-square-foot retail destination on Fifth Avenue in New York in the fall of 2008.
At 73 years old, Armani, the original multitasker, is speeding up rather than slowing down. Practically the moment the Italian designer, who paid himself $346.5 million last year, touts the debut of a new store or product, he’s already sizing up the Next Big Thing. His retail strategy is as aggressive in historical markets like Japan and the U.S. as it is in emerging ones like China and Russia. His name appears on everything from eyewear and underwear to handmade suits to streamlined sofas to Samsung cell phones.
Giorgio Armani SpA, of which Armani is the sole shareholder, reported consolidated sales of 1.47 billion euros, or $1.85 billion, last year—up 9 percent. Armani’s full-year 2006 earnings before interest and taxes rose about 19 percent to 246 million euros, or $310 million. Net profit for the year ended Dec. 31 actually dropped 25 percent to 131.7 million euros, or $165.9 million, due to high taxes as a result of changes in Italian tax legislation, the company said. But the sole ruffle in Armani’s well-trimmed feathers was the recent departure of U.S. chief executive officer Bridget Ryan Berman after 17 months on the job. “The only limit for a fashion designer is living eternally,” Armani said. It’s a challenge he seems increasingly ready to meet. Last year’s rank: 3. Power prediction: Don’t expect Armani to follow in the footsteps of his contemporary Valentino Garavani, who will retire early next year. The designer still has plenty on his to-do list, such as finding a new U.S. CEO and maybe, just maybe, getting around to that succession plan.
3. Terry Lundgren
The last year hasn’t been the easiest for Terry Lundgren as he forged ahead with his plan to create a national brand under the Macy’s name. But despite the challenges—comps have been less than stellar and the company’s stock is languishing—the chairman and CEO of the $27 billion Macy’s Inc. remains committed to his strategy. That was especially evident at the company’s annual meeting in May when shareholders approved a corporate name change from Federated Department Stores to Macy’s, along with a change in its stock symbol.
But since moving ahead with plans to rebrand all of the former May Department Stores Co. stores to Macy’s last year, the transition hasn’t been as smooth as Lundgren had hoped. Customers of the former Marshall Field’s have been especially prickly about embracing the Macy’s moniker and have vowed to boycott the store. Although shoppers in other markets aren’t quite as vocal in their disdain for the Macy’s name, they also haven’t broken down the doors to fill their shopping carts.
One reason is that Macy’s Inc. pulled back on the number of promotions it ran in the rebranded stores to match the frequency within the legacy Macy’s doors, and customers went elsewhere—mainly to J.C. Penney and other moderate-priced department store competitors. This led Lundgren to “strengthen” the promotional calendar at the former May Co. stores for this fall and holiday in hopes of luring those shoppers back. Although the goal is to eventually bring the number of coupons back down, Lundgren recognized that the “rate of change [at the former May Co. stores] was too fast.” One way Lundgren may endear himself to the former Field’s shoppers is by reviving the store’s Field Gear name to use on its newest men’s private label, which will hit stores next month. Last year’s rank: 1. Power prediction: Lundgren sticks with the game plan and customers embrace the Macy’s brand, returning to stores with coupons clutched in their hands.
4. Gildo Zegna
The Zegna family is already preparing for the company’s 100th anniversary in 2010, and chief executive Gildo Zegna has set a goal to reach one billion euros in sales by that year. But the company has already marked a series of important milestones this year. Gildo, who took over as sole CEO in December, has secured Zegna’s role as a preeminent leader in luxury men’s wear. The Zegna family—including president Paolo (Gildo’s cousin) and image director Anna (his sister)—has elevated the industry’s notion of what a men’s-only company can do.
Just last week in Milan, Zegna inaugurated its new Peter Marino–designed global store. The New York unit is scheduled to open in March. Later this month Zegna will christen its new Milan HQ, which will be used as a sales base as well as an exhibition space. The family, after much thought, pulled out of Pitti Immagine Uomo to pursue a more individual strategy, which includes showing its collection during Milan Fashion Week. Its up-and-coming designer line Z Zegna, meanwhile, will continue to present during New York Fashion Week.
Non-Zegna brand activities reached a sizzling point this spring with the successful launch of the Tom Ford label, for which Zegna holds the production and distribution license. On the retail front, Zegna is constantly charting new ground. Never mind China and India—Zegna is well established in both of those markets. Now the company is focused on South America: Zegna recently opened a store in Buenos Aires, and a Sao Paulo shop is on tap for early next year.
Zegna’s net profit advanced 20.3 percent to 63.3 million euros, or $79.8 million, last year. Sales were roughly under 800 million euros, or just shy of $1 billion. And while Gildo is keen on improving profitability, the family has repeatedly said they have zero intentions of taking the company public. Finally, its core textile division continues to give Zegna suits their allure. This fall it introduced its first organic cashmere. Now businessmen can look sharp as well as cool by wearing green. Last year’s rank: 6. Power prediction: Expect Zegna to roll out more global stores modeled after its new Milan flagship.
5. Eric Wiseman
Come New Year’s Day, Eric Wiseman will take the helm of VF Corp., one of the world’s biggest apparel makers—and one that is racking up impressive performance figures. Wiseman, whose ascent on the corporate ladder has been sustained and steady since joining VF in 1995 as executive vice-president of its JanSport backpack brand, is taking over the CEO position from Mackey McDonald, who has guided the company for 12 years and will retain the chairman title.
Wiseman, a youthful 51, is personable, energetic and enthusiastically committed to VF’s strategy of building strong lifestyle brands—which now include 7 For All Mankind (acquired in July), Nautica, John Varvatos, Napapijri, The North Face, Vans, Reef, JanSport, Eastpak and Kipling. Additionally, the company remains a powerhouse in the denim arena, with its venerable Lee, Wrangler and Rider brands, and is a major player in the imagewear business, with licenses to manufacture for Major League Baseball and the National Football League.
With its transformation into a marketer of lifestyle brands, VF shed its historic intimates business—for which it was named—at the beginning of this year, selling brands including Vanity Fair, Vassarette and Lily of France to Fruit of the Loom for $350 million. For the trailing 12 months ended Sept. 29, VF Corp. rang up total revenue of $6.21 billion. In its most recent third quarter, the company increased earnings 4.8 percent to $207.2 million, as revenues climbed 14.5 percent to $2.07 billion.
While most of VF’s businesses are on the upswing, its domestic jeans category continues to experience sales declines and its Nautica sportswear business shrank 10 percent in the most recent quarter. However, VF still expects to post record results this year, which would be its fifth consecutive year of record financial performance—putting Wiseman in the driver’s seat of a well-oiled company aiming to maintain its winning streak through organic growth and new acquisitions. Last year’s rank: 39. Power prediction: With its recent creation of a new contemporary brands division, encompassing 7 For All Mankind and the Lucy women’s label, look for Wiseman to seek out new companies for this nascent portfolio. How about Citizens of Humanity, Chip & Pepper, Earnest Sewn, Trovata or Fred Perry?
6. Domenico Dolce and Stefano Gabbana
In the case of Dolce & Gabbana, two heads are definitely better than one. The perennial boys of fashion (though both are 40-something) have been enjoying a period of supercharged growth. For the fiscal year ended March 31, consolidated revenue shot up 30 percent to 1.05 billion euros, or $1.34 billion, making them part of an exclusive billion-euro club.
Men’s wear—a focus over the past few years—now represents more than 40 percent of sales, and the growth rate of men’s sales is outpacing that of women’s wear. The duo is capitalizing on such momentum and a hearty bottom line—net profit for the fiscal year ended March 31 climbed 38 percent to 150 million euros, or $192.3 million—to further invest in the brand. Next month the designers will inaugurate their first New York men’s-only store on Madison Avenue. In the spring they’ll unveil a 28,000-square-foot D&G shop in Milan’s San Babila. And although they were one of the later Italian brands to enter emerging markets, they’ve been quick to catch up. Last year’s rank: 8. Power prediction: Men’s keeps gaining importance for Dolce & Gabbana as the duo increase the amount of capital dedicated solely to the men’s side of their business.
7. Patrizio Bertelli and Miuccia Prada
At her spring 2008 collection in Milan this June, Miuccia Prada placed the runway and the guests seated around it inside a cage. Yet even without the bars, her audience would have been captive. Prada excels in creating mystique, awe and sometimes head-scratching wonder. At her most imaginative, she can be elusive: It’s as though she takes a perverse delight in watching onlookers struggle to decipher her unpredictable collections.
Yet no one needs to puzzle over Prada’s sales, which continue to generate the lion’s share, more than 80 percent, of Prada SpA’s revenue. In the year ended Jan. 31, net profit for Prada Group rose 63 percent to 76 million euros, or $95.8 million. Total group sales advanced 8.2 percent to 1.43 billion euros, or $1.8 billion, on a constant-currency and perimeter basis. Prada’s husband, group CEO Patrizio Bertelli, understands how to transform Prada’s intellectualism into a commercial vision.
In the past year the company bought back Church’s, left the costly America’s Cup pursuit and invested heavily in its Miu Miu brand, concentrating the majority of its efforts on Miu Miu women’s. The company says it’s plotting to build up the Miu Miu men’s side as well. Meanwhile, Prada is studying a potential stock market listing, possibly as early as the second half of next year. The recent appointment of former Gucci and Burberry executive Brian Blake as COO will surely help Prada continue to translate its sometimes abstract designs into concrete dollar signs. Last year’s rank: 9. Power prediction: Prada is said to have picked its global advisers for an IPO sometime next year. Get your broker on the phone and get in on what will surely be one of the largest luxury listings in years.
8. François-Henri Pinault and Robert Polet
PPR chairman and chief executive officer François-Henri Pinault counted two new additions this year: His family’s luxury and retail conglomerate acquired sport lifestyle brand Puma for just over $7 billion and he and his girlfriend, actress Salma Hayek, welcomed their first child, Valentina Paloma, in September.
PPR’s strategy is built on diversification as it straddles both the highbrow worlds of luxury and relatively mass-market fare through its catalog and retail holdings, including the music chain FNAC. In 2006, PPR’s net profit grew 28 percent to 685 million euros, or $860.5 million, powered by a buoyant luxury sector and improvements in the retail arm. Total group sales rose 5.9 percent to 17.93 billion euros, or $22.52 billion.
Of course it is Gucci Group, run by CEO Robert Polet, that continues to maintain the duo’s power in men’s fashion. The group’s stable of designer brands includes Gucci, Bottega Veneta, Yves Saint Laurent and Alexander McQueen. While YSL has struggled to reach profitability, Gucci continues to defy sales expectations. Out of the shadow, Bottega Veneta has emerged as a major fashion player, thanks to the sophisticated and inherently discreet collections by creative director Tomas Maier. Last year’s rank: 7. Power prediction: Look for more synergy between Gucci Group brands, with more designer collaborations like McQueen’s shoe line for Puma.
9. Bernard Arnault
France’s richest man and titan of luxury group behemoth LVMH Moët Hennessy Louis Vuitton couldn’t avoid a power standoff earlier this year with his star men’s wear designer, Hedi Slimane. Differences were aired, moves and countermoves followed, and ultimately Bernard Arnault came out on top. But he paid a significant price for that victory: Slimane left Dior Homme, and with his departure an era ended. Former Slimane assistant Kris Van Assche took over the reins of what has arguably been one of the most influential men’s labels of the current decade.
Van Assche’s debut was a marked departure from the Slimane aesthetic, and his refined, understated collection garnered mixed reviews. But Arnault isn’t crying over spilled silk. Van Assche may not command nearly as much attention as his predecessor, but the well-managed Dior brand is set for a new round of growth.
Meanwhile the captain of fine industry continues to ride a sustainable wave of luxury, and his holdings—which run from Don Perignon champagne to TAG Heuer watches to a stable of designer entities like Louis Vuitton, Dior and Givenchy—still perform. In 2006, LVMH revenue rose 10 percent to surpass the 15 billion euro mark to 15.31 billion euros, or $19.23 billion. Net profit for the same period advanced 30 percent to 1.88 billion euros, or $2.36 billion. Even with Slimane gone, Arnault’s other labels, like up-and-coming Givenchy Homme and Louis Vuitton, are beginning to flex their men’s wear muscle. Last year’s rank: 4. Power prediction: He has the cash to keep making acquisitions, but Arnault will focus on LVMH brands on the cusp of greatness, notably Fendi and Givenchy.
10. Renzo Rosso
During Diesel’s runway show at Pitti Uomo in June, Renzo Rosso looked like he was performing magic. While onstage he motioned his hands, and smoky wisps of perfume seductively descended into a bottle of Diesel’s first fragrance, Fuel For Life. The illusion came courtesy of a high-tech holographic. But no tricks are needed to keep momentum at Rosso’s holding company, Only The Brave Srl. Despite stiff competition from a slew of denim brands, its top brand, Diesel, continues to hold market share. A new Diesel mega-store—with a price tag of $11 million—is set to open in Milan’s Piazza San Babila next year.
Yet there’s much more to Rosso than five-pocket jeans and T’s. He just inked a manufacturing deal to produce a children’s line for John Galliano, and he’s in the process of constructing a veritable contemporary luxury-goods group, which counts Maison Martin Margiela and up-and-coming Greek designer Sophia Kokosalaki. Net profit for Only The Brave, which also includes Rosso’s manufacturing arm, Staff International, reached 120 million euros, or $150 million, last year. Revenue in the same period climbed 7.2 percent to 1.18 billion euros, or $1.47 billion, last year. Rosso has also set his eye on the Internet. He has begun to market several products through YouTube–like initiatives and has even hinted at the idea of launching a Diesel user-interactive site. Last year’s rank: 11. Power prediction: With the Dsquared license set to expire in 2010, Rosso will be on the hunt to find new designers to add to his stable.
11. Bruno Sälzer and Tony Lucia
Though headlines have focused on the private-equity takeover of Hugo Boss’s parent company, Valentino Fashion Group, Boss global CEO Bruno Sälzer and Americas CEO Tony Lucia have directed their energies toward one goal: boosting sales.
Like many other fashion marketers this year, Boss is increasing its reliance on company-owned stores, a strategy that helped boost its U.S. sales by 18 percent in the first half of this year. Boss’s global first-half sales totaled 793.7 million euros ($1.14 billion), an increase of 11 percent over 2006, meaning that total 2007 revenues will easily exceed $2 billion. In addition to the 27 percent increase seen in its directly owned stores, Boss’s small but burgeoning women’s business also helped with growth.
Branding-wise, Sälzer and Lucia have settled the company into its newly organized sub-brand structure, with the Black, Orange, Green, Selection and Hugo labels all addressing distinct segments of the high-end market. Although Hugo Boss is closing its expensive Fifth Avenue store, there are 113 Boss stores in the Americas, 32 of them company-owned. On the licensing front, Boss added a dual-gender jewelry agreement with Swarovski, and continues to rake in royalties from its powerful fragrance franchise. Last year’s rank: 16. Power prediction: Spurred by top-line growth as well as margin benefits from a supply chain overhaul, Boss’s stature will appreciate both in the U.S. and abroad. But will Sälzer and Lucia’s new private-equity masters cramp their style?
12. Burt Tansky and Russ Patrick
A century ago Herbert Marcus, Carrie Marcus Neiman and Al Neiman decided against investing their $25,000 nest egg on the franchise for a new carbonated beverage named Coca-Cola, opting instead to open a fashion store in Dallas. And Texas oilmen and cattle barons are glad they did. Today, Neiman Marcus is one of the country’s benchmarks of luxury, maintaining its focus on serving the unique needs of that market as it expands and evolves. The $4.4 billion Neiman Marcus Group (which includes the two Bergdorf Goodman stores in New York City) operates 39 Neiman’s stores across the U.S., as well as a catalog and online presence. There’s a clearance operation, Last Call, and a new, more-contemporary vehicle for women, named Cusp. But the gold standard continues to be the Neiman’s stores.
The chain continues to pace the industry in terms of sales-per-square-foot productivity—$611 in fiscal 2006—and manages to consistently achieve double-digit margins. Burt Tansky, who learned the ropes at Saks Fifth Avenue earlier in his career, came on board as CEO of Neiman Marcus Stores in 1994 and is widely viewed as the visionary who developed a master plan of growth for the company. He envisions operating as many as 52 stores by 2010.
Tansky was also at the helm when the company was acquired in 2005 for $5.1 billion by Texas Pacific Group and Warburg Pincus LLC. Although women are rabid in their affection for the company, men have also embraced the store, loading up on the finest clothing, sportswear and accessories money can buy (men’s was added to the mix in 1928). The steward of that business today is Russ Patrick, senior vice-president and GMM of men’s, who has overseen the division for the past three years. Patrick and his team scour the world for the finest items and collections that will elicit a visceral reaction from their customers. As he put it, “Their closets are so full, we don’t sell them anything they need. It’s always an emotional purchase.” Last year’s rank: 13. Power prediction: Neiman’s expands Cusp into men’s wear.
13. Roger Farah
Since Roger Farah became president and chief operating officer of Polo Ralph Lauren Corp. in 2001, he has helped transform the company into one of the world’s fastest-growing luxury brands. It has become a $4.3 billion powerhouse as it established a global infrastructure, brought some key licenses in-house, launched several new businesses, opened more stores and stepped up international expansion. The European business alone has quadrupled, and Farah has said the company still has expansion potential there.
In a move to enhance its business in Japan, its second-largest market, Polo gained full control of its Japanese licensees through a $370 million deal in April. “Japan is our second-largest country in terms of sales of our products after the United States and, upon the successful completion of these transactions, we intend to enhance our presence in major department stores, expand our portfolio of Ralph Lauren stores and further build the infrastructure to support a growing business,” Farah said at the time.
In August he told Wall Street analysts that fiscal 2008 would be an investment year, both financially and operationally, as the company continues to execute three main strategies: expanding its direct-to-consumer business, growing its international operations and developing new merchandise categories with distinct channels of distribution.
For all his efforts, the executive received a $12.5 million compensation package for fiscal 2007. Last year’s rank: 14. Power prediction: Polo’s endeavors in Japan mirror the success already achieved in Europe.
14. Emanuel Chirico
Phillips-Van Heusen has been on a winning streak in the past year under CEO Emanuel Chirico. The company’s star top brand, Calvin Klein, is driving earnings, with the licensing business flourishing.
Coty’s ckIN2U men’s and women’s fragrances have outpaced expectations and are on track to ring up $135 million in sales this year, and this past fall the company introduced a new Calvin Klein Man scent. During this fourth quarter PVH is opening five mall-based stores for its Calvin Klein better “white label” business, including its own sportswear and a raft of licensed underwear, denim, accessory and furnishings product—creating a “World of Calvin Klein” to showcase the brand.
PVH remains the largest dress shirt maker in the country, with three of the top four brands across all channels: Van Heusen, Arrow and Geoffrey Beene. Its many other licenses in the category include Kenneth Cole New York, DKNY, BCBG Max Azria, Sean John and JOE Joseph Abboud. Adding to his dominant position in the dress furnishings market, in January Chirico engineered the acquisition of Superba, the $140 million neckwear maker that holds a host of licenses that overlap with PVH’s dress shirt business. In February, Chirico signed a five-year deal with The Timberland Co. that will have PVH produce and market casual apparel in North America under that premium outdoor brand—adding a business that is currently about $70 million to its stable of sportswear brands, including Calvin Klein, Izod, Arrow and Van Heusen.
Currently PVH commands an 11.9 percent sportswear market share in department stores and a 12.5 percent share in the mid-tier, according to company figures. For the trailing 12 months ended Aug. 5, PVH posted total revenue of $2.27 billion. In the most recent second quarter, earnings jumped 35 percent to $39.1 million, as sales advanced 20.1 percent to $488.9 million. Under Chirico, PVH has made interesting marketing moves as well, becoming the new name sponsor of the arena at the Meadowlands complex in New Jersey, which will change its name to the Izod Center, from Continental Airlines Arena, on Oct. 31. Additionally, Chirico himself is featured in a celebrity-filled campaign sponsored by Arrow to help raise funds for Ellis Island. Last year’s rank: 15. Power prediction: If the initial Calvin Klein white label stores are a success, look for them to proliferate in top malls around the country. Chirico believes the number could hit 100 units in the next few years.
15. Millard Drexler
J. Crew has had a stellar run since going public in 2006: consistent, double-digit comp-store growth and a hike in operating profit from 8.3 percent in 2005 to 10.6 percent in 2006. And the good news has continued into this year. In the second quarter, net income hit $20.6 million compared with a net loss of $2.8 million in the second quarter of fiscal 2006 as result of interest and finance charges. Operating income rose 38 percent to $37.1 million compared to $26.8 million in last year’s quarter, while gross margin grew 160 basis points to 43.7 percent of revenues. Comp-store sales in the quarter increased 4 percent while total revenues increased 13 percent to $304.7 million. This prompted J. Crew to raise its outlook for the year to $1.42 to $1.46 per diluted share, from $1.37 to $1.41.
The strong results are not surprising given that the company is operating under the watchful, nurturing eye of CEO and chairman Millard “Mickey” Drexler. Known as being hands-on and detail-obsessive, Drexler is turning his focus to the men’s market with full force, last week revealing his intent to launch stand-alone J. Crew men’s stores. Although no timetable has been set for the men’s store debut, Drexler put the industry on notice by announcing he plans to take “a more-leadership role in men’s wear. We think it’s an important opportunity in the marketplace. We’ve done it with women’s wear and accessories, and we’re trying to make the same impact in men’s over the next year or so.”
So far, Drexler has successfully launched Crewcuts for children’s wear and Madewell for women, and continues to grow the firm’s overall retail square footage at a 7 to 9 percent annual rate. On the merchandising front, the company has dabbled in more upscale offerings: J. Crew Collection for women and Collector’s items for men, which are limited editions of more elite items, such as shearling coats or handmade blazers. Drexler, who put Gap on the map during his long tenure there, was awarded the National Retail Federation’s highest honor, the Gold Medal, last January. In his acceptance speech, Drexler emphasized continual change, saying, “Every customer is looking for what’s new and exciting. If anyone doubts that this industry is based on innovation, they are wrong.” Last year’s rank: 10. Power prediction: Drexler brings to fruition his first J. Crew stand-alone men’s stores.
16. Michael Gould and David Fisher
Although Bloomingdale’s only accounts for 10 percent of its parent company’s annual volume, it is among the top performers at Macy’s Inc. The dynamic duo of Michael Gould, CEO, and David Fisher, executive vice-president and GMM of men’s, and their teams, are taking the country by storm.
In September the $2.6 billion company debuted its 40th store in Chevy Chase, Md., which followed on the heels of its spring opening in South Coast Plaza in Costa Mesa, Calif. Over the past year Bloomingdale’s has opened three stores in the California market—a flagship in downtown San Francisco in September and another in San Diego—as well as Chestnut Hill, Mass. The firm is also said to be eyeing sites in Phoenix, Dallas and Seattle, as well as in Asia.
In all its new locations, the merchants are steadfast in their resolve to create a mix designed to appeal to each distinct community. Although the mix is similar in all stores, focusing on the upper-moderate shopper, every individual store offers its own nuances. The array is a blend of the successful contemporary apparel of the company’s Soho unit that opened in New York in 2004, and the widely varied assortment of the 59th Street flagship.
Although no new stores have been announced, the success of Soho and San Francisco has proven to company executives that “there are many different footprints” that could be successful, according to Gould. But for right now, the focus is to grow comp-store sales and EBIT while preparing for the next assault. Last year’s rank: 18. Power prediction: The Bloomie’s team continues to expand its reach by opening more stores around the country in 2008.
17. Claudio Del Vecchio
Claudio Del Vecchio knows how to generate buzz. He saw potential in one of the country’s hottest men’s wear designers, Thom Browne, and reached out to him to create a new collection for his Brooks Brothers chain. The result is Black Fleece, which hit over 30 stores in the U.S. and overseas in September. The collection of clothing and furnishings for men and women—an upscale, detail-oriented interpretation of Browne’s snug, contemporary classic tailored outfits—has apparently connected with customers. Del Vecchio reports that the hardest part of the launch has been keeping the stores stocked.
The collaboration with Browne is just one piece in Del Vecchio’s ongoing strategy to revive the venerable specialty store chain, which was founded in 1818 and is widely believed to be the oldest-surviving men’s retailer in the U.S. The Italian-born merchant, whose family runs the Luxottica business in Italy, purchased Brooks in 2001 for $225 million. Sales today are in the neighborhood of $800 million and projections are to hit the $1 billion milestone next year.
In addition to Black Fleece, which is expected to add around $10 million to the company’s coffers, other initiatives include separate Country Club resortwear stores as well as European expansion. Six Country Club stores, which are located in resort communities, are slated to be operating before the end of the year, at which point the company will evaluate the format’s success and the possibility of a rollout.
Del Vecchio has also overseen the opening of successful stores in Milan, London and Paris, which add to the company’s long-standing operation in Asia. With Del Vecchio’s track record, it’s only a matter of time before he unveils his next big brainstorm. Last year’s rank: 29. Power prediction: Del Vecchio keeps the spotlight on Black Fleece as the Thom Browne line becomes a part of Brooks Brothers’ heritage.
18. Michael Jeffries
Despite the challenges that have plagued most teen retailers over the past couple of years, Abercrombie & Fitch is managing to hold its own. Helmed by longtime chairman and CEO Michael Jeffries, the $3.3 billion, New Albany, Ohio–based specialty store chain has proven that not only does it still have a finger on the pulse of American teen retailing, but it is also a solid operator. The company’s stock has risen 34.6 percent over the past year, and earnings in the first quarter rose 6.9 percent on a 12.9 percent gain in sales. Although comps in the quarter fell 4 percent, the retailer managed to increase its gross margin rate by 20 basis points to 65.6 percent, a shift the company attributed partially to an improvement in initial markup. Jeffries credited the strong showing to proper managing of expenses and diversification both in terms of markets and new concepts.
Currently, the company’s arsenal includes 358 Abercrombie & Fitch stores, 424 Hollister Co. units, 196 abercrombie children’s wear stores and 19 Ruehl stores in the U.S. The company has also been expanding abroad recently to countries such as Canada and the U.K., and it will move into Tokyo in the fall 2008 where it envisions opening a multi-unit of more than 20,000 square feet. As of September, it operated three A&F stores and three Hollister units in Canada, along with one A&F store in London, its first foray outside of North America. “Our long-term goal is to roll out stores, and we are working on it,” Jeffries said at the London opening. “But we’re not looking for world domination. We want the business to grow naturally, and we’re humble—and cautious—in whatever we do.”
Closer to home, plans call for a multi-level Hollister flagship in 2009 in New York’s Soho district, which would mark that chain’s first flagship, and plans call for additional Hollister flagships on an international basis. The company continues to rank as exceedingly popular among its demographic, according to Piper Jaffray’s 11-city survey of 600 students, averaging 16.6 years of age, which counted Hollister and Abercrombie & Fitch as the second- and third-place favorites, respectively, for brands preferred by young men for spring 2007. Last year’s rank: 12. Power prediction: Jeffries launches a new concept centered on accessories.
19. Tom Ford
Everyone loves a comeback kid, especially one able to provoke, get naked, kneel at the altar of commercialism and, paradoxically, maintain an elitist air. After much anticipation—kept buoyant from strategic press interludes and select product launches—Tom Ford returned to the fashion fold this spring with the simultaneous launch of his sizzling haberdashery collection and the opening of his first eponymous boutique on New York’s Madison Avenue. Not since Sean Connery’s 007 days have three-piece suits look so sexy.
Those who dismiss Ford’s splashy return as mere marketing have overlooked an essential ingredient. The designer is certainly brilliant at grabbing the spotlight, but it wouldn’t be the same without great product.
In the summer he signed a multifaceted expansion plan with top global merchants that will secure prime retail space—from Macau to Manhattan—for his gray, peak-lapel, double-breasted suits and thick-knotted ties. Ford is only getting started—so far his sales are modest compared with many other designers on this list—but his foray into men’s wear has added heat and excitement to the industry as a whole. And marketing dollars alone can’t do that. Last year’s rank: 45. Power prediction: Next year’s rollout will be the litmus test of the Tom Ford brand. There’s power in hype, but it doesn’t last without sales.
20. Marc Ecko
While the apparel industry plays hot potato with long-standing urban brands, Marc Ecko remains inwardly focused. With only himself (and business partner Seth Gerszberg) to answer to—no pesky shareholders or overzealous investors—Ecko does what he wants, whether that means satiating his childhood fantasies with a collection of Mark Ecko Cut & Sew Star Wars apparel or buying Barry Bonds’ 756th home-run ball and sending it, tarnished with an asterisk, to the Baseball Hall of Fame.
Certainly his personal eccentricities don’t overshadow his well-diversified portfolio, which is anchored by the steadily performing Ecko Unlimited line, inspired by Ecko’s own predilection for graffiti. Also padding Marc Ecko Enterprises’ wallet are 50 Cent’s G-Unit line, bolstered by his “Curtis” album launch this fall; Zoo York, whose East Coast skate vibe continues to win over department and specialty stores alike; flight-themed Avirex, which has nestled into the mid-tier retail scene quite cozily; and Ecko’s grown-up Cut & Sew brand, now in the midst of a full-price retail rollout.
By the end of 2008, Cut & Sew’s store count should near 20, with similar strategies under way for Zoo York and Avirex. But don’t call Ecko just an apparel guy. His young men’s fashion/lifestyle pub, Complex, celebrated its fifth birthday this year with the launch of a VIP boutique. Last year’s rank: 31. Power prediction: It’s been more than a year since we’ve seen a new brand join the $1.6 billion MEE empire. Expect Ecko to remedy that in 2008.