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Steve & Barry’s: Expansion Plan

Steve & Barry's reaches into new markets with a series of celebrity-sponsored clothing lines. Cheap prices and a stellar marketing plan are the tactics that...

Appeared In
Special Issue
WWD/DNR CEO Summit issue 11/14/2007

Steve & Barry’s reaches into new markets with a series of celebrity-sponsored clothing lines.

This story first appeared in the November 14, 2007 issue of WWD.  Subscribe Today.

Cheap prices and a stellar marketing plan are the tactics that have put Steve & Barry’s on the map.

Founded 22 years ago on the University of Pennsylvania campus by childhood friends Steve Shore and Barry Prevor, the company has been a renegade from the beginning, said Andy Todd, president of the Port Washington, N.Y.-based retailer. Shore and Prevor believed it was “ridiculous” for the college bookstore to sell sweatshirts for $70, so they started Steve & Barry’s on the premise of “fantastic quality clothes at great prices.”

That vision has now grown into a national chain that will be 270 stores strong by the end of the year.

Steve & Barry’s University Sportswear moved beyond college campuses and opened its first mall-based store in 1998, a 25,000-square-foot unit in Auburn Hills, Mich., outside Detroit, that sold licensed products from more than 200 colleges. Three years later, the retailer expanded beyond collegiate products into a variety of casualwear for women, men and children, which indicated the company’s shift “from commodity to lifestyle.” Todd said the retailer “realized that there were a lot of people who just wanted casual things to wear every day, and we thought that it was limiting to just be in the college business.”

Apparently so, since Steve & Barry’s has grown exponentially every year. In 2004, Todd said, the company had 60 stores and by the next year that number doubled to 120. By the end of 2006, there were 190 stores, with another 80 added in 2007. In 2005, the firm was awarded the Hot Retailer of the Year award from the International Council of Shopping Centers, an accolade decided upon by mall developers when asked which retailer brought the most buzz to their malls.

One thing that sets Steve & Barry’s apart from its mall-based competitors is the size of its stores, which Todd said average 60,000 square feet, and serve as “an anchor or junior anchor” in each location. The other distinguishing factor is the price — everything in the store retails for under $20.

But while Steve & Barry’s management knew low prices would draw people, they also “wanted to be a brand where you liked not just the prices, but the actual brand.”

And so the first thing the company did was drop the “University Sportswear” from its name, and created a new store prototype that included a “timeless logo and a white, contemporary look to appeal to all people.”

Then the retailer turned to a time-honored tactic: Find a celebrity who would embody the company’s mantra of “access to all.” Knowing that it wanted to target the urban basketball lifestyle, it didn’t take Steve & Barry’s long to find its man — New York Knicks star Stephon Marbury, who would be the face for the company’s first urban-inpired footwear and apparel collection under the Starbury Collection name.

Marbury, who grew up on welfare in Coney Island, N.Y., met with Steve & Barry’s management and found himself fascinated by the fact the store could sell basketball shorts for $10 and a jersey for $12. “‘How do you do that?'” he asked incredulously, said Todd. And when the Steve & Barry’s team said it wanted to “change the way sneakers are purchased in the world” by producing a high-performance basketball sneaker for $14.98, Marbury climbed on board, saying, “Let’s change the world together.”

Todd said Marbury, who at the time had a multimillion-dollar contract and the fourth-most-popular-selling NBA jersey, “took a chance on a company with only 60 stores.” They also had to overcome the stigma against low prices by that customer segment. At that time, Todd said, inexpensive shoes in the urban market were “not cool. In that world, it’s a status symbol [to pay high prices].”

Although Steve & Barry’s did almost no advertising, it “built credibility” through the star power of Marbury. Two weeks before the line was set to hit stores in 2006, the company orchestrated a media blitz, with Marbury appearing on shows ranging from “Live with Regis & Kelly” to “The Oprah Winfrey Show” to the “Today” show.

“There was tremendous buzz, and by the time of the launch, there were huge lines everywhere. We sold out months worth of shoes in a couple of days,” Todd said.

“We really struck a chord with this lifestyle,” he continued. “It became bigger than basketball.”

With the Starbury Collection a success, it was time for Steve & Barry’s to turn its attention to the next project: attracting the female customer.

“We were a male-oriented, testosterone-based store,” Todd said. “But we realized we were forgetting half the population.”

Knowing that associating itself with a celebrity was a winning strategy, Steve & Barry’s made a list of female stars with similar values and the name of “Sex and the City” star Sarah Jessica Parker quickly rose to the top. Like Marbury, she had grown up financially challenged in a family with eight children.

The retailer’s executives met with Parker in the Manhattan store, and like Marbury, she kept interrupting, asking questions such as, “How can you sell a down jacket for $20?” And so together, Parker and the retailer created Bitten, a new line of sportswear for women.

The line comprises nearly 500 apparel and accessory pieces — everything from suit separates and dresses to jeans and lingerie — each priced at $19.98 or less, and available in sizes 0 to 22. “We want it to be for all people,” Todd said.

Bitten hit stores in June and was an immediate success thanks in large part to Parker’s cachet. Before Bitten, Steve & Barry’s dabbling in women’s involved only activewear and some unisex Ts, but Bitten changed everything.

“Overnight, we went to selling more women’s products than men’s products. It was company-changing.”

Mimicking the Marbury media plan, Parker did the rounds of TV shows and appeared in magazines promoting Bitten right before its launch. “She got herself into every magazine and on every entertainment show,” Todd said. “So again, there was tremendous buzz at the launch.” In fact, the line was so popular out of the box that the Steve & Barry’s Web site crashed after Parker showed her cashmere sweaters on “Oprah.”

Next, Steve & Barry’s set its sights on the junior market, and sought out actress Amanda Bynes, who is “a good kid who stays out of trouble. It was a perfect match, so we made a whole marketing plan around her,” Todd said.

They came up with the name Dear, which is both a nickname bestowed on Bynes by her grandmother, and also indicated the line of casual apparel and accessories was “very dear to her heart.” A viral campaign on MySpace and YouTube, along with interactive videos, created an immediate connection with the teen customer. In fact, Todd said that when the line hit stores earlier this year, “it seemed like there were a million little girls screaming in my ear.”

The company’s newest association is with tennis star Venus Williams, a budding designer, who will graduate from fashion school in December, Todd said. By linking up with Williams for the launch of the EleVen collection, Steve & Barry’s is hoping to gain a foothold in the women’s activewear market.

Although the merchandise doesn’t hit stores until Thursday, Williams actually wore sneakers and tennis togs from the line at the 2007 U.S. Open. Her entire outfit — the shoes, tennis dress, accessories and visor — will retail for under $40, Todd said. All told, EleVen will encompass more than 200 items of active-inspired sportswear, jeans, jackets and other pieces.

With all its celebrity lifestyle brands, Todd said, the celebrity gets a percentage of the sales of the product, making them committed to the success of the collections they’re promoting.

By capitalizing on its unique niche — celebrity-endorsed apparel and accessories at “impossibly low prices” — Steve & Barry’s is set for even more growth in the future. E-commerce is in the plans, as are more stores.

“We’re looking to expand a lot,” Todd said. “We’ll have 270 stores in 40 states by the end of this year and we will expand our footprint throughout the U.S. and beyond in the near future. And we expect to have many more lifestyle brands at Steve & Barry’s in the coming years.”