Most Recent Articles In Retail Features
Latest Retail Features Articles
- Europe on Alert After Terrorist Group Threatens Malls
- India Faces Shortage of Decent Malls
- Delfina Delettrez Opens London Shop
More Articles By
NEW YORK — Fashion companies are striking back against a 5 percent decline in retail apparel sales last year with branding campaigns that tie their clothes to a lifestyle and give them more relevance for the consumer.
If the decline, which is coming at the hands of such areas as electronics, is to be beaten back with branding, apparel firms will have to take a disciplined approach.
“You have to know exactly who you are and who you want to be,” said Roger Markfield, vice chairman and president of American Eagle Outfitters Inc. at the Key Issues Seminar entitled “Not Branded, You’re Vulnerable,” held at the Fashion Institute of Technology here last week. “The single most important thing — other than [having] talented people — is to put the whole organization in a room and iron out what you are.”
Overall apparel sales at retail fell to $166.8 billion in 2003 compared with a year earlier, while consumer electronics, including the hip iPods and ever-present cell phones, surged 4 percent to $101.6 billion, according to consumer research firm The NPD Group.
The seminar, which featured presentations from NPD and several of fashion’s key executives, was sponsored by J.P. Morgan and CIT, and moderated by Gilbert Harrison, chairman of investment banking firm Financo.
“The necessity for branding is driven by the retailers’ growth of their own private brands,” said consultant Emanuel Weintraub, who is also honorary chairman and founder of the seminar. About 30 percent of the market is unbranded and under attack by retailers’ private brands and megabrands, he said.
Building a robust brand through marketing and promotions has allowed Victoria’s Secret to move away from its highly promotional stance in the Eighties, said speaker Lori Greeley, executive vice president of merchandising at Victoria’s Secret.
A strong core brand also has let Victoria’s Secret, owned by Limited Brands Inc., expand with subbrands, such as Body by Victoria and Pink, which is an effort by the company to capture a younger customer.
These brands work in conjunction with the main brand, just as the various promotional efforts by the company, including TV and print ads, events and direct mail, all carry the same theme. Consistency in branding was a key point, cited by the speakers time and again.
Victoria’s Secret and American Eagle each put a premium on promotional events that often draw big crowds and local media, sometimes with scantily clad big-name models.
Offering some lessons from what he described as “the school of hard knocks,” Robert Skinner, president and chief operating officer of Kellwood Co., said companies need to be willing to sacrifice some profit to properly manage a brand. This means pulling products from the shelves before consumers take it upon themselves to make them obsolete, he said.
About half of Kellwood’s $2.35 billion in sales come from brands it owns, such as Sag Harbor and David Meister, while 25 percent comes from licensed brands, such as O Oscar, and the rest is derived from manufacturing store brands.
Skinner suggested to firms looking to build brands: “Define the market to your advantage, find the white space,” explaining that Kellwood did this with XOXO, which addresses a customer somewhere between the junior and contemporary areas.
“We’re all pretty much doing the same thing,” said John Idol, chief executive officer of Michael Kors USA Inc., meaning deciding what a brand stands for and communicating that and staying the course.
Kors has its designer business, as well as Michael Michael Kors, a better-priced line that launched across several categories, including apparel, accessories and eyewear, for fall. The collection line is sold in about 75 doors, while better apparel is in 350 and fragrance is in 1,200.
“People have to breathe and embody the brand,” said Idol, speaking of his employees.
It is at the stores, though, where consumers can actually touch, feel and buy the fashions, where brands have to struggle with sales people who don’t necessarily understand the brand.
“The biggest challenge you have is maintaining your brand image in department stores,” Idol added.