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Oscar de la Renta Turns Attention to Retail

This fall, the Madison Avenue flagship will double in size to 4,000 square feet and the company’s first London store will bow on Mount Street.

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NEW YORK — With 13 stores and counting, Oscar de la Renta Inc. is stepping up the retail side of its business.

This story first appeared in the June 14, 2012 issue of WWD.  Subscribe Today.

Like much of what the company’s namesake has done throughout his 50-year-plus career, de la Renta has approached retailing with discretion and measured steps. Now as the label has evolved beyond ready-to-wear to include accessories, children’s wear, fragrances, bridal, beauty and even suntan lotion, president Alex Bolen is eager to showcase the mix all in one place. During an interview in the company’s West 42nd Street office here, Bolen was quick to note that the company is by no means easing up on wholesale or e-commerce.

This fall, the Madison Avenue flagship will double in size to 4,000 square feet and the company’s first London store will bow on Mount Street. In April, the designer’s second store in the Middle East opened in Riyadh, and that region remains a growth opportunity through its partner, Retail Arabia. Pleased with the initial response to the more compact boutique that opened in the Dominican Republic’s Punta Cana in November, Bolen is considering using a similar concept in more mountain-friendly locales. And despite the economic unrest in Greece, the executive team acquired direct control of the Oscar de la Renta store in Athens last summer. There is also interest in developing a retail presence in airports, and perhaps a stand-alone bridal store in a major city.

When the Madison Avenue store relaunches in late September or early October, it will include what used to be the 2,000-square-foot Paul & Shark shop. Instead of having an assortment of items merchandised throughout the boutique, there will be designated areas for specific categories. “This will be our first store where we really have the world of Oscar and all things presented exactly in the way we want them presented,” Bolen said.

Construction is also underway in London at 130 Mount Street near the corner of Berkeley Square. What used to be Nicky Clarke’s salon is being transformed into an Oscar de la Renta store. With an opening planned shortly after the debut of the Upper East Side location, the 3,000-square-foot U.K. outpost will showcase accessories, beauty, home decor, children’s wear, ready-to-wear and bridal. After more than a few fits and starts, the company is pleased to have finally lined up a London flagship. With London gearing up for the Summer Olympics, Bolen plans to have signage and brand marketing in the store’s windows by the time sports fans descend on the city in late July.

Asked why he feels so strongly about retail when others are laser-focused on digital, Bolen said, “We have become increasingly confident in the risk-reward of managing a retail business. Don’t misunderstand: E-commerce has many attractive characteristics. And wholesale will continue to be a critical part of our business going forward. As we’ve opened our own stores and have learned what works and what doesn’t, we’ve become increasingly focused on expanding our retail presence.”

To see things through, David Aste recently joined as vice president, retail. With experience at Bloomingdale’s in Boston and as the former vice president of boutiques at Chanel, Aste has “a lot of exciting ideas about how to expand our business,” Bolen said.

Retail currently accounts for roughly one-third of the designer’s overall business, with wholesale, fragrance and beauty comprising the bulk of sales. Industry sources estimated the company’s 2011 sales to be about $150 million.

The company only opened its first freestanding store in 2004, Bolen said, but he sees it one day accounting for up to 50 percent of revenues. “There is an important profit portion of retail. If it’s well-run, meaning your cost structure and stores are appropriate and your inventory is well-managed, it can be a very profitable part of your organization. I would love to tell you that all of our stores are profitable, they’re not. We’ve had a mix. But we’ve learned through good news and bad news but now we’re increasingly confident about ways to manage retail well,” Bolen said.

While not declaring the smaller, 1,000-square-foot Punta Cana concept a success, Bolen said he may experiment more with the concept in places like Aspen, Colo., Innsbruck, Austria, or Forte dei Marmi, Italy, provided they can get the right team and formula in place. “Could it be in the next five years a meaningful portion of our retail portfolio? Could it be 10, 20, 30 more stores? Perhaps,” Bolen said. “At the end of the day, when we take on a store lease and spend money, that’s a dollar that I’ve got to get a return on. I have to be careful. We’re a family business and it’s important that all of our capital get appropriate returns. I think a lot about when we put money somewhere, is it going to work for us in exactly the right way. You know I don’t have a listed stock that…”

Knowing vacationers aren’t about to buy a $6,000 cocktail dress, the Tortuga Bay store in Punta Cana offers sunglasses, embroidered caftans and more casual apparel. The aim is that women who shop there will seek out the brand at Neiman Marcus or Saks Fifth Avenue once they go home to Chicago or wherever they live. “The way that people lead their lives in New York and London is different than [they do in] Santa Barbara. It doesn’t mean there aren’t customers who are fans of our brand that we ought to be addressing their lifestyle needs there and we want to figure out the right way to do that. So we’re looking into evolving our retail concept — I want to be clear we’re not diffusing our label, we’re not doing a cheaper brand none of that — it’s how do we merchandise well the Oscar brand in a context that is outside of a New York or a London?”

Men’s wear is another category that is up for consideration. It has been about three years since the company has sold men’s wear in its boutiques, which was done in a limited capacity. There is currently a license for men’s wear in Central and South America under the O Oscar label. “If I read one more time that Oscar is one of the most well-dressed men in the world and don’t have a way to bring that to our business, I’m going to jump out a window,” Bolen said. “Look, there are a lot of extremely well-run, well-designed brands out there doing men’s wear. We have to make sure that we’re going to do it in a way that is different and that is going to be successful. We found a designer who we think gets Oscar and could bring his ideas to men’s wear well. We’ve also found a businessperson who we think could help us, so I am studying it closely. But I have made no decision. I am not announcing men’s wear.”

Children’s wear has proven to be a solid business for the company. Getting into that sector “really was an accident,” according to Bolen. The company used leftover fabrics to make girls’ dresses for charity benefits in New York and Los Angeles, and then sold every piece. “There wasn’t a lot of merchandise but I thought, ‘Hmm…maybe there is a business opportunity here,’” he said. “It took us a long time to figure out how to approach children’s. Oscar, Eliza [Bolen who is creative director, licensing] and I all feel that the children’s thing can become inappropriate very quickly. Little girls dressing up like women is not really something we want to have our brand associated with so we wanted to find a designer who approached children’s in an appropriate way.”

While Bolen would consider new licenses for items such as home, but is more inclined to go with partnerships instead of licensing deals, the aim is to build the brand over the long-term, he said. “Unfortunately, as a brand management matter, what we’re finding today [is] it’s difficult to match our brand goals with our licensees’ goals. There’s a mismatch in time horizons….Oscar frequently says that he is a control freak in the best way. He has taught us to be control freaks in a way that is useful for our brand.”

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