The Top 10 Sportswear: A Darwinian Experiment

It's survival of the fittest these days for traditional mainstream brands.

Appeared In
Special Issue
WWD 100 issue 07/23/2008
1. Old Navy
2. Gap
3. Dockers
4. Tommy Hilfiger
5. Calvin Klein
6. Liz Claiborne
7. Ralph Lauren
8. L.L. Bean
9. Lands’ End
10. Eddie Bauer


This story first appeared in the July 23, 2008 issue of WWD.  Subscribe Today.

The economic downturn made a bad situation worse for the mainstream sportswear market. Traditional brands, suffering even before the economy soured, seem hardest hit by macroeconomic woes, as their core customers — middle-income mothers — have severely tightened their apparel budgets.

Vendors from VF Corp. to Liz Claiborne Inc. labeled traditional women’s sportswear brands as the weak spots in their portfolios, department stores such as Macy’s and Belk pointed to the better floor as their weakest departments, and vertical retailers like Chico’s, Talbots and Ann Taylor began plotting strategies to turn their hard-up traditional brands around.

Some women’s sportswear brands even exited the market this year, including Nautica, Sigrid Olsen and O Oscar. Others made exclusive deals with retailers, like Tommy Hilfiger at Macy’s and Dana Buchman at Kohl’s, to try to save their businesses. Even many of the top 10 most recognized brands in the category are having difficulties.


Holding their respective first- and second-place rankings this year, Old Navy and Gap are both owned by troubled parent company Gap Inc. The San Francisco-based $15.8 billion company is trying to turn things around with the help of new management, including Glenn Murphy, chairman and chief executive officer. Murphy replaced Paul Pressler, who was fired due to the company’s poor performance. Since Murphy started in August, the company has started seeing bottom-line improvements, thanks to cost cuts and plans to trim store openings this year and downsize many existing units — although fashion, store traffic and real
estate problems persist.

Old Navy, Gap Inc.’s biggest and most troubled division, has been attempting to create a faster pipeline, but the turnaround didn’t happen quickly enough, and Old Navy president Dawn Robertson left the company in February after just 16 months on the job. Murphy predicts that as Old Navy rebalances its fashion, family and value virtues, its sales will pick up by back-to-school.

Meanwhile, Dockers also held its spot at third. Dockers San Francisco saw a slight slip in sales this year, and parent company Levi Strauss & Co. is pegging the brand’s future on improving its women’s offerings by introducing head-to-toe product ranges, like the women’s golf line that the brand launched for spring. The brand will have to forge ahead without Dockers president and general manager John Goodman, whom Mervyns hired to be president and ceo this spring. His replacement hasn’t been named yet.


Tommy Hilfiger climbed to fourth from eighth, perhaps already benefitting from the preferred status Macy’s Inc. chairman, ceo and president Terry Lundgren has promised the brand when it becomes exclusive to the retailer this fall. Lundgren called the partnership “a home-run idea” and “the best example now” of the growing exclusive business at the largest department store in the U.S. The brand will be getting favorite-child status with the retailer, reaping advantages that include cooperative advertising and bigger, more prominent real estate in updated in-store shops. This is a far cry from Hilfiger’s role at Macy’s in the last few years, during which time the brand had suffered “a market push-back,” according to Fred Gehring, ceo of Tommy Hilfiger Group.

Calvin Klein also jumped four spots to fifth from ninth. Its recognition likely stems from its designer business, while its better diffusion line continues to be the worst-performing Calvin Klein license, according to Calvin Klein parent Phillips-Van Heusen Corp. Both PVH and licensee Kellwood Co.’s new parent company, Sun Capital Partners, are said to be disappointed in the better line’s performance, and when the licensing agreement expires in a few years, sources speculate Kellwood will no longer produce it.

The long-suffering Liz Claiborne brand slipped a spot in the rankings to sixth. Liz Claiborne Inc.’s better-priced namesake brand did less than $900 million in wholesale volume in 2007 — less than half what it did during its peak in the Nineties. After years of the brand’s continued losses, both in doors and real estate, dragging down its $4.58 billion parent’s sales and profi ts, Liz Claiborne Inc. enlisted Isaac Mizrahi to rescue its struggling flagship brand beginning in spring 2009 — a change applauded by the industry.

Moved up to seventh from 10th is Ralph Lauren, one of the area’s few consistently strong performers. The company’s better-priced women’s line, Lauren by Ralph Lauren, saw sales gains last year, according to Polo Ralph Lauren Corp.’s 2007 annual report, which added that Lauren is “the number-one brand in its category and continues to have strong retail sell-throughs.”

L.L. Bean slipped four spots to eighth from fourth. The 96-year-old vendor of outdoor gear and apparel wants to become a national chain and is expanding its stores to do so. The privately held company, which has 12 regular-price stores and 15 outlets in the Northeast, plans to operate 32 full-price stores by 2012. Earlier this year, it opened its first Midwest store in Chicago, part of a new concept that Bean calls the “outdoor lifestyle store,” and Bean has its eye on the New York area next.

Lands’ End dropped fi ve places to ninth from fourth. For the troubled Sears Holdings Corp., the Lands’ End brand, which saw record profits in 2007, is one of the company’s few bright spots. Lands’ End’s parent, which owns both Sears and Kmart, has expanded the brand into more than 100 Sears stores, but only one Kmart unit is selling Lands’ End, and the company sees an opportunity to introduce Lands’ End into other Kmart stores.

Eddie Bauer rounded out the top 10 list, down three spots from seventh last year. After several disappointing quarters, Eddie Bauer Holdings Inc. plotted a restructuring effort — including a rebranding of the classic brand — to bolster sales and improve operations. This year the company cut 123 jobs, or 16 percent of its corporate staff, as part of a broader initiative to slash $25 million to $30 million out of the operating cost structure of the business.