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Big and Little Retailers Join Forces

Large retailers like Gap and Uniqlo are hooking up with edgy boutiques to draw sales and ideally, new customers.

PARIS — After designer collaborations and celebrity tie-ups, it’s now time for stores to pair up — even Davids with Goliaths.

As fashion retailers continue to feel the pinch from the worst recession since World War II, they’re becoming increasingly creative to offer more exclusive products and experiences that can persuade regular shoppers to open their wallets and hopefully attract new customers as well.

Over the weekend, Gap and edgy Parisian boutique Merci wrapped up a monthlong project in which each hosted a selection of the other’s products in their New York and Paris stores. Also over the weekend, Parisian department store Printemps christened the opening of a Maria Luisa location within its recently revamped Boulevard Haussmann flagship here.

Uniqlo recently set up shop in hip Paris concept store Colette as a teaser for the arrival of its Paris flagship, which opened last week.

And Target is mulling a one-off collaboration with Britain’s Liberty to launch clothing and accessories bearing the store’s trademark flower prints.

“In an effort to lure back the consumer, retailers are increasingly having to be more creative by devising events and promotions that promote the concept of uniqueness, exclusivity and scarcity. The partnership with an exclusive brand is just one example,” said Patricia Pao, founder of New York-based fashion consultancy The Pao Principle. “I think we are going to increasingly see more of the big brand-little brand pairings.”

Through these kinds of partnerships, large retailers acquire a degree of exclusivity and scarcity, as well as the prestige of carrying the smaller but highly desirable brand. The smaller retailers gain brand awareness and a degree of exposure they couldn’t afford to buy on their own, as well as trialing their products on new consumer segments.

“I do think it’s the next thing,” said Robert Burke, president of Robert Burke Associates, a New York-based consulting firm. “The designer collaborations have been played out quite a bit. This is a new angle. It’s one of those win-wins.”

He noted that for giant stores, “there’s a great deal of cachet with these small retailers, particularly French retailers.” Whether big or small, all retailers jockey to carry exclusive designer brands and products. Now big retailers are competing to gain access to buzzy specialty store banners, Burke said.

Indeed, according to market sources, Galeries Lafayette recently made overtures to Dover Street Market, the quirky multibrand emporium in London masterminded by Rei Kawakubo of Comme des Garçons, which has everything from vintage Cutler & Gross sunglasses and Christopher Kane dresses to Rose Bakery pound cakes under one roof.

“It allows us to bring in new talents, which can’t really stand commercially on their own feet in a big space, but which we think have potential for our customers,” said Maurizio Borletti, chairman of Printemps Holdings, which controls France’s Printemps and La Rinascente in Italy.

Industry experts pointed out there has to be synergy between each brand’s customers, because both brands still need to produce and sell merchandise to their core customer.

“These arrangements need to be more than merely puff and noise. It requires consistency in terms of brand identities so the hype around the event and cobranding does not dilute any of the brands,” said Florian Gonzalez, a London-based brand consultant. “Hopefully, by sharing their customers, products or retail spaces, brands experience cross-fertilization, rather than cannibalization or confusion.”

Borletti noted there are considerable challenges in meshing the “industrial mentality of a big retailer” with the more instinct-driven one of an independent fashion boutique. “That business in retail is what haute couture is in fashion,” he noted. “The chemistry to make it work is not easy.”

The business model is also vastly different, with the independent boutique dealing more with the vagaries of fashion and therefore operating at a higher risk to margins.

“We think as a department store we should have that competency. And I think we can do it more profitably because we have a lot of traffic,” Borletti said, noting Printemps’ personal shopping service will bring even more attention to the brands Maria Luisa plans to showcase.

Borletti said European department stores are no strangers to collaborations with other retailers. Printemps, for example, long had departments for Zara and Mango. “But back then, Zara was a totally new thing,” he said, whereas today, they wouldn’t “contribute to the exclusiveness of our offer.”

Inspired by the chic Merci boutique in Paris, Gap opened a “Merci Gap” pop-up store in New York. Meant to stay open only a month, the store occupied a 500-square-foot space next to Gap’s flagship on Fifth Avenue, re-creating the look and feel of the original Parisian shop, with proceeds going to various children’s charities. Across the Atlantic, Merci hosted a selection of one-off Gap designs. The original Merci is the brainchild of Marie-France and Bernard Cohen, the founders of Bonpoint, a children’s wear brand they sold in 2003.

Merci is a concept store stocked with unusual house wares, fashions, perfumes, fresh flowers and an ice cream stall. All the proceeds from the shop benefit Accueil des Sans-abri, a nonprofit organization that helps Madagascar’s homeless.

Jean-Luc Colonna, co-founder of Merci, said he was surprised by the reception the Merci shop-in-shop received from Gap customers.

“Many New Yorkers now have placed Merci on their radar screen,” he said.

Specialty fashion store Opening Ceremony is considered a pioneer in hookups with giant retailers, being the first American store to carry Topshop at its first outpost on Howard Street in Manhattan. Five years later, Topshop operates a flagship on nearby Broadway, and Opening Ceremony counts branches in Los Angeles and Tokyo, too.

“We’ve never felt that these giant retailers would detract from our merchandise,” said Opening Ceremony’s co-owner Humberto Leon. “We have a great customer that can see the inherent value of fun, well-curated fast-fashion and then turn around and buy a Rodarte knit or Proenza Schouler bag.

Opening Ceremony also bills itself as the first retailer to partner with Target on its 2004 collaboration with Proenza as part of its Go International initiative featuring limited edition, low-cost collections from established designers. Opening Ceremony also did a collaboration with Uniqlo earlier this year, introducing the brand to the Los Angeles market.

“I think it set a tone that having these goods in your store is cool and modern,” Leon said. “We think this is something fun for the customer. It also helps to highlight the designer collaboration and take it out of context. This reiterates the importance of design within these collaborations.

“It’s exciting to introduce a curated segment of the giant retailers to cities or countries that they do not have a presence in,” he added.

According to Leon, “the possibilities are endless. If other retailers offered us great products, we would look at it.”

In that vein, Opening Ceremony plans to carry special Rodarte products the Mulleavy sisters created in tandem with their one-month residency at Paris boutique Colette. “For us, it’s a way of sharing the marketplace and sharing ideas,” Leon said.