Eager to restore their luster after struggling in recent seasons, contemporary brands are experimenting with a range of tactics: tightening their wholesale distribution, emphasizing e-commerce, retooling design studios, ramping up youthful offerings and looking overseas for growth.
At the same time, department stores are rethinking and reframing their contemporary offering as the business becomes more item-driven.
Vince is exiting Saks Fifth Avenue and Bloomingdale’s this spring to focus on Neiman Marcus and Nordstrom and its direct-to-consumer business, as reported (Vince shoes, which are licensed, will still be sold at Saks and Bloomingdale’s), while Diane von Furstenberg has changed its designer and will introduce a new collection this month by Nathan Jenden, who worked alongside von Furstenberg in the early 2000s. Theory’s women’s creative director, Lisa Kulson, has stepped down, and the company plans to name her successor soon.
“It’s no secret that in America there is too much accessibility of product and there are too many points of distribution for many brands. So we are going through a process of being much more curated and creating more unique experiences for our customer,” said Andrew Rosen, chief executive officer of Theory. “Just like brands are being more specific about their messages, I see department stores also being more specific and focused on what they stand for and what their message is to their customers. And I think there has been a lot of improvements in modernizing how they reach their customer. In that respect, we continue to support those stores that have supported us for all these years.”
Indeed, many major stores have changed the complexion of their contemporary floors.
Tracy Margolies, chief merchant at Saks Fifth Avenue, declined to say which brands would be taking the space formerly occupied by Vince, while describing a new buying approach under its banner for the segment, The Collective. She called it “our approach and response to the way our clients want to shop. We offer our clients curated assortments, leaning toward of-the-moment designers, must-have trends and lifestyles rather than the labels themselves.
“This allows for a more flexible environment, one we can inject with newness on a consistent basis. Plus, it gives us the chance to spotlight more emerging brands, such as Saloni, Ganni, AMUR and Rixo, among others,” she added.
Bergdorf Goodman is unveiling an update to its contemporary floor, calling it The Select at BG.
“This concept space will be curated by Linda Fargo and the buying team to address one of the key issues the contemporary customer faces, which is the sheer amount of product and the confusion of choice,” said Brooke Fisher, vice president, divisional merchandise manager of women’s contemporary. “The Select at BG will feature our favorite edits of the season in a dynamic environment and will be a shopping experience the customer can’t find anywhere else.”
She said that the retailer has made some “strategic edits to our vendor matrix for spring in order to bring our customer a more streamlined shopping experience. We are always on the hunt for emerging talent and The Select at BG will be a great environment to highlight our discoveries.” She added that contemporary “outperformed our expectations for fall and spring is off to a strong start.
“Customers are looking for a more personal, curated experience. For The Select at BG we are making our selections based on the merit of a piece at a time, whether it speaks strongly to a trend or emotion,” Fisher added.
Heather Shimokawa, vice president of fashion direction for ready-to-wear at Bloomingdale’s, echoed an emphasis on items more than collections. “It’s the way people shop. We have strong representation of collections and that’s our best foot forward. People shop items within that. We’re looking at highlighting these great pieces and how you can use them in your life,” she said. “It’s been a really good year for us in contemporary. We closed out 2017 in a really strong way.”
Among opportunities she spies is “this conversion into collections from some of the premium denim partners,” she said, citing Frame, Mother and Rag & Bone as they build out full lifestyle collections.
She noted track stripes are checking for Bloomingdale’s from core active to elevated sportswear, and the retailer is excited about cleaner silhouettes in denim, less-skinny bottoms and newer silhouettes across the board, including the men’s wear influence in ready-to-wear. “We’re looking at continued growth in that elevated, sophisticated style. Mixing in suiting and separates and putting our own Bloomingdale’s spin on that is a strong opportunity for us,” she said.
She also spies potential in “the advanced contemporary world,” citing brands in that area such as T by Alexander Wang, Alice & Olivia, Cinq à Sept, Ramy Brook, Elizabeth & James, Alexis, Carven and ALC. “Our customer is eager for it, asking for it, and we really want to get behind that expansion,” she said.
Theory’s Rosen said the company’s web site is crucial. “We treat our web site as the flagship and the most authentic expression of our brand. We continue along our strategy to curate assortments and messages so that our customers can understand our unique point of view, what our brand stands for and believes in both from a product perspective and a culture perspective,” he said.
The digital focus extends to Theory’s overseas, as 60 percent of its business is outside America. “Combined with what we see as a major opportunity by adding the virtual component to complement the physical platform we have, we see it growing at a much faster rate than the U.S. business,” he said.
The company is adding freestanding stores — such as one it recently opened in Palm Beach, Fla. — when it finds the right location and the proper economics. “I think physical retail for our brand is an important part of what we do as long as it’s linked together with our virtual channel. Our stores are the best opportunity for us to better service the customer and create a personalized experience,” he said. “The biggest initiatives we’re focused on are curating and hero-ifying our product — not just making lots of clothes to fill up racks in stores — defining our point of view about our clothing, which revolves a lot around the fit and fabric, and developing more of a direct communication with and direct delivery to our customers on that product.”
Andy Oshrin, chief executive officer of Milly, also believes that the company’s web site is a critical part of its growth. “Our biggest investment outside of our cost of goods sold for the year, and our employees, is going to be in our digital business,” said Oshrin.
His wife, Michelle Smith, creative director, and Jessica Walsh, a partner at Stagmeister & Walsh, have developed a new ad campaign that has a digital mindset. “A good share of our budget is going to shift more towards digital,” said Oshrin. “A bigger proportion of our budget has been shifting away from print advertising to digital advertising. This coming season we’re putting more money into conversion techniques.
“We need to get more customers qualified and more customers to purchase,” he explained. “That’s done through software technology, more personalization and better CRM through identifying customer preferences and understanding what people want from us.” He’s also looking to get the average order value up 20 percent.
Milly looks to relaunch its business at Fred Segal in West Hollywood and is also seeking a pop-up on the West Coast. Omni-retail (freestanding stores and Web) is planned to increase 12 percent this year. Last year, omni-retail was up 5 percent, which was below plan, he said.
Another new Milly initiative is launching an offering for a younger demographic at its freestanding stores and web site only, beginning in April or May.
“We’re looking at ways we can use our vertical business to make more exclusive product for our customers, particularly Generation Y and Millennials who have very strong interest in our brand. That 25-35-year-old demographic is our largest active demographic that’s interested in our brand and in sync with the 35-45 and 45-55-year-old demographic. If we can target product at a friendlier price point at similar quality and value, we’re going to be able to capture more. We’ll use all the conversion to target those customers,” said Oshrin.
Rebecca Taylor, cofounder and chief creative officer, and Janice Sullivan, president of Rebecca Taylor, are plowing ahead with their current distribution. “Department stores have always been very important and continue to be,” said Taylor. Its casual line, La Vie, has limited distribution and is exclusive to Nordstrom and Shopbop, as well as specialty stores and its own web site. Rebecca Taylor is distributed to such stores as Saks Fifth Avenue, Nordstrom, Bloomingdale’s, Neiman Marcus and Bergdorf Goodman.
“To be honest, our e-commerce has been a big focus for us in 2017 and continues to be a giant focus for us for 2018. We’ve had really incredible e-comm performance because of a sharpening of the product focus, the launch of La Vie and also we did a ton of things. We went from being behind the curve to really getting in front of the user experience,” said Taylor, noting they introduced Apple Pay. “We went after the top user experience and we really invested in marketing images, the upgrading of the imagery,” she said.
Taylor said the company stopped doing runway shows a few years ago and has refocused some of its dollars toward strengthening its outward appearance to the world and curating what the company wants Rebecca Taylor to look like. “That’s been incredibly successful on our e-comm, to have digital images to share directly to our customer. We’re getting a lot of customers and we’re working on an international business with our e-comm, which is a little bit trickier, but with the right help, we will get there,” said Taylor.
“It was a big focus for us and we’ll end the year roughly up 30 percent in our e-comm channel,” said Sullivan, noting Jan. 31 marks its fiscal year end. She declined to give wholesale results, but said, “In our cases, digital outperformed brick-and-mortar, even with department stores.”
Sullivan sees growth opportunities overseas, where the company has a small business. “We just started to show the brand consistently in the Paris market. We signed with an Australian distributor which is new for us in 2018.”
Jane Siskin, owner of Cinq à Sept, said that the company will launch a new collection called Tous Les Jours, which is a sub-brand of Cinq à Sept. “It’s meant to bring the aesthetic to everyday,” said Siskin. For example, there’s a cargo pant with a ruffle, soft twill wide-leg pants, super stretch leggings, silk cashmere sweaters, and logo T-shirts. It also includes a small denim capsule including a ruffle denim jacket, high-waisted short and jean. She said the price points are slightly lower than the main collection, and they’re everyday clothes.
The collection will be housed in the same retailers that carry Cinq à Sept, such as Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman, Nordstrom and Shopbop. It’s housed with the collection. Tous Les Jours looks more like sportswear than jeanswear. It is priced to wholesale between $38 and $165.
The company is banking on huge growth with its web site, set to relaunch in mid-February. Cinq à Sept doesn’t have stores yet, but they’re in the planning stages. “There will be some experience attached to it, providing another reason to come into the store,” she said. “Renting a space and putting clothes in is not very alluring in today’s environment.”
Stacy Bendet, chief executive officer and creative director of Alice & Olivia, summed up how contemporary has evolved over the last 10 or 15 years: “First we were items, then we were collections and then it was being a brand, and now it’s about being a direct-to-consumer brand. Not just a direct-to-consumer brand in the U.S., but a global direct consumer brand.” She said the company’s focus is leveraging new technology to maximize its e-commerce effort. “We’re going live with our omnichannel inventory systems to have seamless shopping between e-commerce and our stores,” she said. “Our focus right now is on technology, CRM, everything to enhance the customer experience in our stores. We’re still opening stores. Everything is about communicating directly with our customers,” said Bendet.
Online is a big emphasis for the brand. “We’re rebuilding some of our technology, we’re implementing a more robust CRM program, and we’re making a couple of big hires,” Bendet said. “My focus is the web site this year, and over the next three to five years is really building out our global digital commerce business,” she said. Alice & Olivia has stores in China and the Middle East, but they’re not servicing that customer online. “That’s my next focus,” she said. The brand does e-commerce in Japan with a partner in the region.
She said in Bloomingdale’s, it has concession agreement in six of their stores. “It’s amazing. They’re allowing us to staff and buy for their stores. For us, it’s been incredibly successful. We used to be in 19 doors. We took ourselves out of the majority of those. We are doing more business managing six doors. Our business has increased 15 percent in six doors versus 19 doors.”
As for distribution at other major stores, she said, “Our focus is less on big growth than having a solid profitable business within them. We grow year over year. It’s not like the days when contemporary was growing at 20 percent a year. It’s a little bit more about stability. Our e-commerce business has been growing really robustly. The bricks-and-mortar is more about having a really quality business,” she said, noting the brand has great partnerships with Net-a-porter, Lane Crawford, Bergdorf Goodman, Neiman Marcus and Saks.
Currently Alice & Olivia has 37 international freestanding stores. “Our growth in those stores is 10-12 percent a year,” she said. A flagship is set to open in Miami this month and Aspen, Colo.; Austin, Texas; and Nashville are among future priorities.
Bendet said disruptions made 2017 rocky, but that’s easing. “The market was definitely volatile, but I think things are really steady, people feel good and people are shopping. I’m really optimistic about 2018,” she said.
Alice & Olivia is plotting more collaborations after a successful Beatles-themed collection. “It was a one-time thing. I kind of think of those things as our version of a product drop,” she said. “Our show for spring was all about representing these female artists. We’ll have a bunch of fun collaborations coming out with Lola Schnabel and Angelica Hicks that will be hitting the stores this season, and later this season with Donald Robertson.”
As for the highly promotional environment at retail, she observed, “We’d like to be more in control of it. Things have calmed down a little bit. Everyone has gotten on a better path of not being overly promotional. We’re trying to control the best we can for the sake of the brand. Part of the reason we did the concession so we didn’t have that happening. With our other stores, we act as partners so we’re not stuck in a viscous markdown cycle,” she said.