Better departments are springing forward this season to offer more private, exclusive and upscale offerings.
At Macy’s, the launch of O Oscar for spring continued the precedent the retailer set in introducing T Tahari last fall. Private label is slowly but steadily growing at both Macy’s and Lord & Taylor, according to the buyers there.
“The only things gaining space in that area are lines like O Oscar, T Tahari and private brands, which are getting more space because they have better margins because they are noncompetitive,” said Andrew Jassin, managing director of the Jassin O’Rourke Group, a consulting firm in New York. “Private label — a store’s own proprietary brands and brands that have been created for them — continues to intensify. Designer brands with big names also are doing well, whereas the old world of Joneses and Lizes seems to be getting downplayed.”
Following an eventful fall — relaunches of Calvin Klein, Liz Claiborne and Nautica, and the exit of City Unltd., produced by Liz Claiborne Inc. — the changes for spring are more subtle. Lauren Jeans is replacing the licensed Polo Jeans, and Calvin Klein white label added a dress line that was offered in a quiet way in December, with a full launch for spring.
Lauren Jeans is already doing well at Lord & Taylor. “[I’m] not sure the new name makes a difference, but we do think they are addressing a void in the market — more missy denim,” said LaVelle Olexa, the retailer’s senior vice president of sales promotion, advertising and public relations.
Olexa said Lord & Taylor added Lacoste to its better floor this season and that Michael Michael Kors and Lilly Pulitzer were among the area’s strongest sellers.
For Macy’s, the spring season is one of continued consistency checks across its converted May-to-Macy’s doors. “The challenge is looking at newly acquired doors and figuring out how to align them with our existing doors,” said Nancy Feldman, general merchandise manager and executive vice president for sportswear at Macy’s East. “This year is a year of refinement and is certainly a change year.”
At Macy’s, Lauren Ralph Lauren is still king, along with O Oscar and T Tahari, as well as the retailer’s private labels INC and Charter Club, added Feldman. “Our overall private brand business continues to grow as our business grows,” she said. “We have a nice balance between private brands, new exclusive brands and aspirational brands like Lauren.”
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Where does that leave national brands like Liz Claiborne, which, it has been rumored, Federated is considering cutting back? “We’re still doing business with Liz,” Feldman said, “though as more of our doors become our best doors, business will shift to represent our highest product offerings.”
Lauren Ralph Lauren long has been an anchor of better departments, and other designer diffusion lines continue to try to get part of that market share.
“Lines with strong names should do well,” said consultant Emanuel Weintraub. “Lauren always does well. T Tahari is a winner. Calvin Klein has been uneven, but seems to be getting its act together. The question is whether the past will predict the future.”
Even exclusive brands are leaning more to name-brand recognition. O Oscar followed what Macy’s called a success with T Tahari, which shifted space but not size in Herald Square this season, according to Feldman.
“This year is definitely the year of the brand,” said Catherine Sadler, president of New York marketing firm Catherine Sadler Group. “I believe that private label has to emerge not as private label but as branded product. O Oscar is an example of the department store moving away from private label toward a branded offering that is delivered exclusively in their venue. At the consumer level, it is a brand.”
Feldman echoed that view. “We see O Oscar as a lifestyle brand,” she said. “It is already selling well. It looks like we have some iconic Oscar pieces, like a ruffle blouse.”
In addition to the name power of Oscar de la Renta, the relaunched brand’s strength is in its exclusive relationship with 400-plus Macy’s doors.
“The challenge or strategy for most retailers is to continue to offer product that differentiates themselves at retail,” said Kathy Bradley-Riley, senior merchant at The Doneger Group, a buying and consulting firm here. “We’ll see a continued move to private label, exclusive brands, strategic alliances, so the retailer is able to offer its customer something different.”
That’s why Sadler likes Jones New York’s Signature as well as Collection, which have developed a VIP customer rewards program and which recently signed Lloyd Boston to interact with customers online and in stores.
“They are taking a cue from better specialty store brands like Chico’s, with the Passport Program that has delivered loyalty,” Sadler said. “This consumer is looking beyond advertising to more of an ongoing relationship. This consumer is more discerning than ever, and the brands that will win today are those offering highly innovative, fresh products and programs to the consumer.”
The changes this season appear to be directional and subtle, unlike some past tumultuous shifts in the better department. About three years ago, the Lauren license was being transferred back to Polo Ralph Lauren Corp. from Jones Apparel Group; Jones then launched Jones Signature; Tommy Hilfiger started H Hilfiger, which has since left department stores; Michael Kors came out with Michael Michael Kors; Calvin Klein came out with its own better line, and Liz Claiborne created Realities, which has gone under.
Overall, Bradley-Riley predicted the spring will bring good tidings for better departments. The Baby Boomer woman is spending more time in department stores, while some specialty stores geared to the more mature woman are having a hard time. Gap Inc. just announced it would close Forth & Towne, which it launched in 2005 to cater to women 35 and older, and Janeville from Gymboree Corp. closed last month. American Eagle Outfitters Inc.’s new Martin + Osa, catering to women ages 25 to 40, also is said to be having a rough entrée into the market — all of which gives the better departments at department stores an opportunity to capitalize on that customer.
“The Baby Boomer is in department stores again,” said Bradley-Riley. “We have seen a nice increase in traffic. The better market in general is doing a better job at offering fashion without trying to be too young. The retailers have done a good job at getting her back in the door. ”