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NEW YORK — Vera Wang’s $300 million business at retail may have its string of suitors, but the privately held, family-owned company said no deals are imminent.
During an interview last week with the company’s senior management team, Susan Sokol, who joined the brand as president last year, said, “Rumors like that go hand-in-hand when you have a luxury brand growing as fast and furious as ours is.”
But with an invigorated management team calling the shots, a new dress line in stores for spring, an enhanced ready-to-wear collection, three overseas bridal shops opening next month and licensing deals in the works, the designer and her team have heard their share of interested pitches.
The 15-year-old company is potentially interested in building sales through a joint venture and licensing opportunities for, perhaps, a diffusion sportswear collection, Sokol said. Wang’s offices receive calls “daily” from interested manufacturers, but nothing has come to fruition.
“We always pay attention to them, but there are no concrete conversations going on now,” Sokol said.
She did “want to drive home the point” that the growth the brand is experiencing requires that its executives look at other opportunities and that “growth requires financing.”
For example, with a successful Madison Avenue store that generates $15 million in annual retail sales, the company would be “remiss” not to look at that as a rollout plan that can be taken to other markets such as Los Angeles and San Francisco, Sokol said.
“That is something that would require outside investors or we could possibly do it ourselves,” Sokol said.
The company has realigned its business into two divisions. Sokol focuses on the designer’s apparel business, which generates $100 million at retail, and Laura Lee Miller, executive vice president, oversees its licensing business, which accounts for $200 million at retail. Suzanne Zikas, senior vice president of sales, is another important part of the team.
This year, bridal should account for 40 percent of the $100 million apparel business, rtw should weigh in at 27 percent, the new dress division should make up 18 percent and the bridesmaid business should be 15 percent.
This story first appeared in the February 8, 2005 issue of WWD. Subscribe Today.
Regarding the brand’s depth of product, which includes 10 licensed products that are sold in 19 countries, Miller said: “We are a brand that can actually put women and men together and have it actually mean something.”
Chet Hazzard remains with the company as vice chairman and chief operating officer. He said his role “hasn’t really changed,” other than he has “obviously given a tremendous amount of space to Sokol and Miller.” But stepping back from the day-to-day operations of the company to focus more on the overall strategy is something he has been wanting to do for some time, while Wang continues to steer the ship.
“Vera has the last say,” Hazzard said. “When I think I’m done with something, we’re usually just getting started.”
The newest initiatives at the 140-person company include:
- Opening bridal shops in Dublin, South Korea and Singapore next month.
- Upgrading information technology and information systems.
- Considering sourcing from more factories. The company employs workers in its leased spaces in North Palm Beach, Fla., and Akron, Ohio. It also uses factories in Italy and Asia.
- Hiring several key people for production.
Wang herself is the first to admit that growth has its challenges.
“Fashion is brutal because you have to create on command. The bigger you get, to reinterpret it is challenging,” she said. “It isn’t the first collection or the 10th. It’s the 50th or beyond.”
That is why she admires behemoth companies such as Giorgio Armani, Ralph Lauren and Calvin Klein. Conveying a cohesive image through her various enterprises is a priority for Wang. And different industries call for different degrees of fastidiousness.
“I’ve done more design for stationery than I have for clothing,” Wang laughed, referring to one of her latest endeavors.
Whether designing a dress or a honeymoon suite — as she has done for Halekulani, a Hawaiian resort — Wang puts a lot into developing fabrics. Her lack of preconceived notions about home design serves her well, she said. “I’ll think, ‘Why not a dress [fabric] as a couch?’”
One thing that is complicating things is that designers are now competing with Gap, Banana Republic and J. Crew for the same fabrics from the most expensive mills, Wang said. Designers have the added disadvantage of not having the same buying muscle as the big chains, she said.
“You have to ask yourself, ‘How do you compete? And how expensive can your clothes afford to be within your collection?’” Wang added.
Bridal, an area headed up by vice president of bridal Erica Griffin, remains the dominant division. With 46,000 weddings being held in the U.S. each weekend, the designer is committed to the bridal business, especially since 70 million Millennials will be of the marrying age by 2017, Miller said.
In 2004, bridal sales — which consists of three areas, Vera Wang Luxe, Vera Wang Collection and the opening price point label Vera Wang — accounted for 58 percent of the company’s total sales. Wang has redesigned the labels and hangtags for each to make them more distinctive. The designer’s average wedding dress costs $5,000.
Judith Giuliani tapped Wang for her wedding dress and saw firsthand her passion for what she does. “People say ‘workaholic.’ They say that about my husband [former New York mayor Rudy Giuliani]. But workaholic is perjurious. He’s passionate about what he does. Vera loves what she does. There’s a difference.”
For 2005, Wang aims to double rtw sales to $24 million at retail compared with a year ago, Sokol said. First-year dress sales are expected to hit $16 million at retail and the three-year projection is $100 million at retail, she said. The line is in 150 doors for spring, and Electronic Data Interchange has been implemented for it.
“We can have all this great growth. But unless we have the right information, we can’t manage it efficiently,” Miller said.
Pleased with the response to the designer’s new fine jewelry collection, licensed to Rosy Blue, the company is looking into licenses for lingerie, bedsheets, table linens and home furnishings. “It’s a question of design and how well it connects to the brand and the identity of the brand. That’s where we have been very careful,” Hazzard said. “It’s not control. It’s really about bringing back down this connection to the brand and following through.”
To that point, there are also plans to beef up the brand’s marketing and to do it in a more cohesive way, Miller said. Co-op advertising with key retailers is a priority, especially for nonbridal dresses and rtw. Badger and Partners, the ad agency here, developed a spring campaign that includes rtw for the first time.
Wang still has her share of side projects, such as dressing Olympic skater Michelle Kwan for competitions and outfitting the Philadelphia Eagles cheerleaders. While she is focused on Thursday’s runway show, the big picture is always on her mind.
“It’s early in the game for us. I never think it’s too good — ever. I always think it could be better,” Wang said.