Haggar Corp. has some big plans for the fourth quarter, when it will unveil a dual-pronged product launch that will significantly expand its position within the nation’s department stores.
First up is Life Khaki, a new, higher-priced line of men’s khaki pants designed to appeal to a younger customer. In addition, the Dallas-based manufacturer will launch Haggar Heritage, an exclusive collection for Macy’s that will bolster the store’s dress pant assortment. Both labels will be introduced at the end of the year and roll out in 2012.
“This is a great opportunity to broaden the core Haggar brand and expand into square footage we’ll never occupy with our core Haggar product,” said Tim Lyons, president of sales for Haggar Menswear.
These initiatives come two years after Paul Buxbaum took the helm as chief executive officer of the firm. Buxbaum, whose experience has been in liquidation and restructuring of distressed companies, stressed that it was never his intention to dismantle Haggar. “I came here because I thought there was an opportunity,” he said. “Haggar is an iconic brand, and I thought it had great promise and upside. It’s sort of like the Good Housekeeping seal. It just needed to be cleaned up, redirected and put back on the highway to health.”
The company, which was founded in 1926, was publicly held until 2005, when Perseus LLC, a merchant bank and private equity fund management company, along with Infinity Associates LLC and Symphony Holdings Ltd., bought the brand for about $212 million.
Its primary customer is a man over 45, but Haggar is targeting a thirtysomething guy with these new products. “We feel very strongly that we have the Baby Boomer covered with our historic Haggar programs,” Buxbaum said.
Lyons said that in a recent survey, the label had an 87 to 90 percent awareness level. “And we spoke to thirtysomethings and found there’s no aversion to the Haggar brand,” he said. “They just have a very neutral position.” The research company said that although Haggar didn’t have to overcome any negative perceptions, “we didn’t do anything that appealed to them either.”
So Life Khaki was conceived.
“They think like 35-year-olds. So we need to take care of our existing customer and aggressively bring something else for the younger guy.”
The label will be sold first at J.C. Penney, then at Kohl’s, Belk and Sears, Lyons said, launching in about 1,000 doors. Haggar is hoping it will be sold in more than 3,000 doors by Father’s Day of 2012. It will offer three fits: relaxed, straight and slim.
The company is also using all recycled product for its Life Khaki brand, another key talking point for the younger customer. Hangtags include slogans such as: “Live a great life”; “Life is what you make of it,” and “Life is comfortable.” “We just want you to feel good,” Lyons said. “The models are cool and the final pièce de résistance is that it has a great hand.”
Buxbaum said that when the label is expanded into a full lifestyle brand, “I don’t see why it can’t be a $100 million business.”
Although both lines will launch as bottoms only, the plan is to eventually add tops, Lyons said, in categories such as woven shirts, knits and sweaters. The company has licensees for knit and woven tops, leather, outerwear, sweaters and hosiery.
Heritage, which is based on archival elements of the brand and will include a new crown H logo, will be added to around 270 Macy’s doors for fall, Lyons said. “We wanted to give Macy’s a more fashion-forward aspirational line.” It will offer more detailing than traditional Haggar product, such as top stitching, ornamentation and updated pocketing details. “It denotes a cooler, hipper flavor for the brand,” he said.
Marc Mastronardi, group vice president and divisional merchandise manager for men’s sportswear, pants and big & tall for Macy’s, said that the exact plan for the launch has not yet been determined, but it will be tested in a limited way for fall in the classification dress pant department. “It will add another customer to our store,” he said. Haggar’s core dress pants sell well at the store, he said, but they’re “fairly basic. There’s an opportunity to get into more fashion dresswear. That’s something we didn’t see in our business today, so the future could be very big and very bright.”
Buxbaum said it was hard to come up with a volume projection for the line, adding: “We hope to get as much out of it as possible. Maybe $20 million to $40 million? It’s hard to say.”
Haggar’s core product, which is sold in around 4,000 doors, generally retails for $30 to $40 out the door, Lyons said. Life Khaki will sell for $36.99 to $39.99, while Haggar Heritage will be $39.99 to $59.99. The Macy’s product will offer “more embellishment,” Buxbaum said.
Lyons said the marketing plan for the introduction of both labels is still being conceived, but traditional ads will be supplemented by initiatives under the “digital platform,” which is key to attracting the younger guy.
In addition to launching these two new labels, Haggar also recently acquired certain private label assets from Neema Clothing Co. “The acquisition will bolster our clothing business and will be a nice additive to the dress side,” Buxbaum said. “We’re looking to expand that side with retailers as well. We have strong relationships with major retailers, get high grades for replenishment and have a good sourcing business. We can leverage that to help others.”
The company also produces Gramicci, an outdoors brand, and is the licensee for Kenneth Cole bottoms. “We have a very broad platform,” Buxbaum said.
Although he declined to provide a volume figure for Haggar — before going private, Haggar reported annual revenues of just under $500 million — Buxbaum said it is profitable and on “very solid footing.”
He said that although Haggar is “lean and mean,” it’s open to adding to the portfolio. “Our goal is to look at opportunities and see what we can add to our platform that is accretive to our business,” he said. “So we’re looking for other deals.”
In addition, Haggar is looking at India and Asia as potential expansion opportunities, Buxbaum said.
“Our view as a company is to continue to grow and be as profitable as we can,” he said. He declined to comment on the long-term plan for the firm, deferring to John Glazer, a managing director of Perseus, for questions about going public again or being sold. Glazer said Perseus does not comment on assets within its portfolio.
Buxbaum said the last 18 months have been “very strong” for the company. “Even in difficult times, we’re blessed to be in value-priced product with the right fit.”
Lyons concluded: “It’s a good strategy — strong execution and divine providence.”