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Second Lines Gain Steam

Designers and retailers see boom in demand.

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An Emporio Armani runway look for fall-winter.

Giovanni Giannoni

A Philosophy fall-winter look.

A Philosophy fall-winter look.

Courtesy Photo

Moschino Cheap & Chic Cotton Candy at the Milan flagship.

Moschino Cheap & Chic Cotton Candy at the Milan flagship.

Courtesy Photo

In these meager economic times, retailers and consumers are helping themselves to seconds — designer second lines, that is.

This story first appeared in the August 28, 2009 issue of WWD.  Subscribe Today.

Executives from Galliano, Red Valentino, Philosophy by Alberta Ferretti and others cite encouraging progress and future growth potential as retailers devote more floor space to such brands and as consumers seek more bang for fewer designer bucks. These second lines also are building their own retail networks and expanding their product assortments.

“There is a global attention right now for Red due to the fact that it offers an edgy, ironic and fashion-oriented design at good quality and interesting prices,” said Stefano Sassi, chief executive officer of Valentino Fashion Group. “It perfectly integrates with our main line, a successful concept given the difficult times.”

Sassi said he considers Red a long-term strategic opportunity — evidenced by the fact that for the spring 2009 collection, Valentino severed its ties with licensor SINV SpA to bring production in-house.

Red was launched in 2003 by Maria Grazia Chiuri and Pier Paolo Piccioli, then accessories directors who were appointed sole creative directors in October. Today, Red is sold in some 850 doors worldwide, with plans to open freestanding stores in London and Hong Kong this year.

Galliano, John Galliano’s second line, launched in 2007 under license with Italy’s Ittierre SpA, recently opened its first freestanding store in Tokyo’s Omotesando Hills mall. Galliano has also established shop-in-shops in Japan’s Isetan (on the fourth floor and adjacent to brands such as Anna Sui, Tory Burch and Y’s Red Label), France’s Galeries Lafayette and Printemps, and London’s Harrods, speaking to global buoyancy for the segment.

Although John Galliano ceo Pierre Denis declined to give figures, he described the brand’s second line as a “substantial business” that has “exceeded expectations.” Next up for the brand is a freestanding shop in Hong Kong in 2010, to be followed by a rollout in greater China, plus a footwear range to complement the apparel and leather goods.

Alexander McQueen ceo Jonathan Akeroyd characterized the McQ line, licensed to Italy’s SINV since 2006, as a “massive opportunity,” citing demand at a pop-up shop in February in New York for McQ’s collaboration with Target as evidence of great “awareness and desire for McQ,” currently sold in about 400 doors.

To be sure, designer executives breathed a collective sigh of relief in April when Roberto Cavalli inked a new five-year license for his Just Cavalli label with Ittierre, a leading Italian maker of designer second lines.

The renewal signaled a turning point for Ittierre, which filed for the Italian equivalent of Chapter 11 bankruptcy protection in February after running out of cash. Just Cavalli is the biggest license for Ittierre, generating 2007 revenues of about 240 million euros, or $328.9 million. Ittierre’s other licenses include C’N’C Costume National, Galliano, VJC Versace and Versace Sport. The Galliano license with Ittierre also was recently renewed through 2014, and was extended to include a men’s wear collection.

In 2007, Ittiere’s “young lines” segment had net sales of 404.5 million euros, or $553.8 million.

Massimo Ferretti, ceo of Italy’s Aeffe SpA, parent company of Philosophy by Alberta Ferretti and Moschino Cheap & Chic, said he sees opportunity for secondary collections in this economy.

Cheap & Chic, priced about 30 percent less than the signature line, posted a midsingle-digit increase in 2008, while Philosophy revenues rose 10.4 percent.

New Cheap & Chic stores are planned for Jeddah, Saudi Arabia; Doha, Qatar; Baku, Azerbaijan, and Taipei, Taiwan, plus corners in Madrid and a shop-in-shop at Chongqing, China. Also, in partnership with Euroitalia Srl, the firm launched a Moschino Cheap & Chic fragrance featuring a bottle inspired by Olivia, the brand’s iconic duck.

Meanwhile, Blufin Srl, the parent of Blumarine and Blugirl, has expanded Blugirl via licensing into homeware, eyewear, bags, underwear and beachwear, and earlier this year opened its first franchised Blugirl store in Milan.

Executives were eager to distance today’s secondary lines from the diffusion craze of yore, with some Italian brands even balking at the s-word.

While Miu Miu, D&G and the recently reintroduced Versus lines are priced lower than their designers’ signature collections, they’re not considered second or diffusion lines by their creators. “There are no inferior lines,” said Stefano Gabbana. “These last years have evidenced how style is not necessarily a question of price anymore, because you can buy at fast-fashion stores or at the market and still look stylish.”

John Hooks, deputy managing director and group commercial director at Giorgio Armani SpA, stressed Emporio Armani “was conceived to be a collection that would reflect the trends of the moment interpreted through a particular Armani vision for a customer with a youthful attitude.”

When Versace SpA resurrected Versus last February with a range of accessories designed by Christopher Kane, the message was clear: “Versus won’t be a second line, but a lower-priced, young luxury brand for a modern, stylish, sensual and futuristic woman,” then-ceo Giancarlo Di Risio said at the time.

Sensitive nomenclature aside, retailers described second lines as a rare bullish zone of business these days.

“These brands encompass the designer’s vision and offer great trend-led pieces at an accessible price point,” said Marigay McKee, fashion and beauty director at Harrods, which is devoting more floor space to such “sister” brands as Marc by Marc Jacobs, M Missoni, Moschino Cheap & Chic, D&G, Valentino Red, See by Chloé and DKNY. “Second lines have come a long way since the Eighties. Until recently, the word diffusion was synonymous with inferior quality, fabrics and styling, but as designers revamp these lines to stand alone, they have earned the design respect and purchases of style-savvy customers.”

She noted many high street customers are investing in second lines as long as they have a “wow factor.”

Saks Fifth Avenue showcases labels such as M Missoni, Red Valentino and Rivamonti by Brunello Cucinelli in its new Wear departments, designed to instill life into the stale bridge category and trumpet the store’s opening price ranges.

“The [designer] names bring a lot of credibility to this zone of business,” said Joseph Boitano, Saks Inc.’s group senior vice president and general merchandise manager of women’s. “The reaction has been really terrific.”

Boitano said Saks intends to add more second lines for fall-winter and spring-summer 2010 to fill what it sees as a gap between designer and contemporary segments, “for a woman who wants to be appropriately, but also fashionably, dressed.…We believe it’s one of the biggest ready-to-wear opportunities. It’s really that opportunity to capture that bridge customer, who’s really been lost.”

Secondary lines such as Red, Galliano, M Missoni and others also are becoming increasingly important in the beleaguered bridge category, which soon could lose one of its key anchors. As reported, Ellen Tracy is said to be exiting the sector in order to become a better brand and is in talks about a retail exclusive with Macy’s, Dillard’s and Lord & Taylor. Bridge vendors, like every other sector, are facing pricing pressures from stores, which are asking for lower price points. Lafayette 148, for example, cut its prices by 15 percent this past spring.

But so far the turmoil on so-called bridge vendors hasn’t seemed to impact designer secondary lines. Pascale Camart, Galeries Lafayette’s head of buying for women, said second lines have “exploded” in recent years at its stores, and now often outperform — and sometimes even replace — designers’ first lines. To wit: the French department store operator no longer carries Chloé or Sonia Rykiel collections in favor of See by Chloé and Sonia by Sonia Rykiel lines. Coming in July is the second line of designer Vanessa Bruno, but Paul & Joe Sister was recently dropped from the department.

“Not everyone can do a second line,” Camart noted.

 

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