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WWD Milestones: Southpole Stays True

Retailers point to a key-item focus and value pricing as critical to the brand's success in stores.

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There aren’t many brands in the urban space that can boast a 20-year history and $1 billion in annual retail sales. But that’s just what Southpole has built by maintaining a laser-focus on its target customers and seamlessly evolving with them over the past two decades.

As a result, the brand has become a pervasive presence around the U.S., counting over 5,000 department and specialty stores as customers, including more than 1,000 J.C. Penney units, 480 Stage Stores, 300 Peebles and 70 Gordmans as well as countless independents.

The secret to the brand’s success, retailers report, is its ability to home in on key fashion items each season at prices that are not out of reach of the young shopper.

“J.C. Penney has been a retail partner with Southpole since the fall of 2000,” said Steve Lawrence, executive vice president and senior general merchandise manager of men’s, home and children’s for the Texas-based retailer. “We launched in 200 stores and Southpole is currently in all Penney stores.”

Lawrence said that over the past five years, the urban market has changed dramatically and Southpole has been nimble enough to keep up.

“The urban landscape has gone through a significant change in the last five years,” he said. “No longer do urban customers dress head to toe in their favorite brand. Today, they may combine a shirt from their favorite brand with a pair of jeans [from another brand]. Here again, Southpole has succeeded by offering a tremendous value relative to other urban brands. Also, the aesthetic of urban brands has evolved, driven less by all-over logo looks. Southpole has moved with the market and today, many of the tops reflect a clean, modern aesthetic.”

That aesthetic, according to Lawrence, appeals to a broad range of customers. “One of the keys to Southpole’s success has been that the brand appeals to a wide consumer base,” he said. “We’ve enjoyed a strong boys’ business up through young men’s. The Southpole customer has proven to be very loyal and updates his wardrobe with the latest styles, season over season.”

And Southpole has proven to be up to that task, updating its offerings to keep the mix — and customers’ closets — fresh.

“Southpole’s formula has been to continuously update the line with the most current urban fashion trends, at market-leading prices,” Lawrence said. “Southpole also approaches the business with a hybrid classification/collection approach. Within the collections, they build large volume key item programs with solid polos, thermals and basic denim.”

Gary Schettino, vice president and general merchandise manager of men’s for Sears, has been a customer of Southpole’s since his days at Mervyns.

“We had a huge Southpole business at Mervyns up until the end,” he said of the now-defunct West Coast-based department store.

Now at Sears, the brand is the linchpin of the retailer’s young men’s department.

“We are focused on the young men’s business — it’s a really important strategy for us,” he said.

Sears has traditionally appealed to older men, who visit the stores for its well-respected hard-goods brands, but the new merchant team is spotlighting the younger businesses.

“The older core customer is so important to us,” Schettino said. “But the younger customer shops more frequently and reacts to trends more quickly. Young men’s is critical to the transformation of Sears and we want to develop it.”

As a result, Sears is focusing on three distinct areas within its young men’s department: action sports, varsity prep and urban. And within the urban part of the business, Southpole remains a top performer.

“We merchandise it as a collection, but at the end of the day, they’re more of a key-item brand business,” Schettino said. “They’re really good at that.”

Within Sears stores, Schettino said the company uses “visual amplification presentations” on the floor to call out the Southpole brand to customers. And as a “highly promotional” business, Sears spotlights its value-oriented specials as well. For instance, “We do a hat and T-shirt combo that is very successful,” he said.

Historically, among the most popular items have been T-shirts, polos and fleece, Schettino said. “Those have been the big drivers.” The company’s denim, which is a category “in transformation,” has morphed significantly over the past few years to stay on-trend. Southpole was important when the “oversize, baggy” look was key, but in recent years has “trimmed down” in response to the market, he said. The same holds true with tops. Polos were bulky a few years ago, but have become tighter.

“Those are minor changes in the big picture, but it has kept them alive,” Schettino said. “As a company, they have really transformed over the years from street to urban and then young men’s contemporary,” Schettino said. “They’re trying to diversify and create subbrands. The urban element is still a factor, but the mix now speaks more to a contemporary guy.”

He continued: “The beauty, and what we love about young men’s, is that it’s the fastest element within the men’s business. The lifestyle and trends change frequently and not a lot of brands have lasted. Southpole has proven to be adept and a market-segment leader.” And Schettino expects the brand to continue to have a strong position at Sears in the future. “As long as they keep their finger on the pulse of the customer, retain the Southpole DNA and keep up with the market, [I’m sure it will continue to be a growth brand for us.]”

At Stage Stores, which operates more than 800 stores in 39 states under the Stage, Peebles, Goody’s, Palais Royal and Bealls names, Southpole is the “number-one resource in young men’s collections,” according to Jack Matzer, senior vice president and general merchandise manager of men’s, young men’s, children’s, juniors and shoes. “It’s a very important resource for us. We’ve carried it for almost nine years. It’s been successful as a brand because it focuses on its core competencies.”

Matzer said that “starting in 2008, the whole urban landscape changed but Southpole stayed true to the customer. They also keep their costs in line and offer great value.”

So while other brands in the urban market “come and go, Southpole has stuck to its roots, offering urban fashion at a great price. They didn’t try to be too young.”

Within the Stage stores, Southpole is merchandised as a “key-item fashion brand,” he said, with emphasis on T-shirts, polos, denim, fleece or shorts, depending upon the season. It’s carried in all stores, although the presentation is larger in more-urban skewed doors.

Like Schettino, Matzer is confident that Southpole will continue to be a key resource moving forward.

“The landscape changes every day, but the fact that they’re still a prominent brand shows their adaptability,” he said.

He also pointed to the company’s strong sourcing structure, which allows it to “keep prices in line.” Additionally, “they’ve reduced sku’s, which has helped them streamline the brand. They’re nimble, they deliver well and on time — that’s big. They also have good management in place and they’re good partners.”

Jeff Gordman, president and chief executive officer of the Omaha, Neb.-based Gordmans, which operates 72 stores around the Midwest, said Southpole is the “leading opening-price brand in our young men’s department,” and in fact, is one of the top brands in the entire store.

The retailer started carrying the line in 2003 and over the years has watched as Southpole “increased its key item offering, diversified its lifestyle options,” and evolved into a monthly delivery program. Although items such as denim, hoodies and T-shirts are historically among the best sellers, Gordman said the stores are successful in merchandising the line as a lifestyle brand.

Calling Southpole management “dynamic,” and “very smart” businesspeople, Gordman said that based on the store’s “long and robust history, we’re confident that the partnership will continue to grow.”

 

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