LOS ANGELES — Da-Nang, Joe’s Jeans and Yanuk are three contemporary lines sharing not only a sparkling run at retail, but also a connected ownership.
Apparel veterans Albert Dahan and Joe Dahan, who are brothers, and Paul Guez, respectively, run the lines from their 1 million-square-foot facility in Commerce, Calif., but they say joint quarters don’t jeopardize any trade secrets — even during those group luncheons attended by a dozen members of the various families.
“Each company is its own satellite —we don’t compete, we just share ideas,” said Albert Dahan.
The common thread among the players is their partnership stemming from their direct and indirect involvement in Innovo Group Inc., the public company behind the Fetish by Eve and Shago by Bow Wow lines. Brothers Hubert and Paul Guez own a 20 percent stake in the firm. Azteca Production International, a 13-year-old firm that produces private label product for Tommy Hilfiger and Calvin Klein, is a partner of Innovo, run by Hubert and Paul Guez. Last July, Innovo’s wholly owned subsidiary, Innovo Azteca Apparel Inc. (which sources product for private label and branded lines, including Target’s Mossimo line), bought Blue Concepts’ customer lists and purchase orders for $21.8 million. The Blue Concepts division (which primarily sells jeans to American Eagle Outfitters) had revenues of $75 million for the fiscal year ended January 2003. Paul Guez is the chief executive of Blue Concepts LLC.
Begun as an accessories business, Innovo has sought brands for the past two years. Using its retail relationships built from private label production, it now wants to go after high-margin goods and deliver distinct brands to retailers.
“Right now, we’re more focused on a branding strategy which offers more growth potential,” said Innovo ceo Jay Furrow Jr. “We’re ending the year at 65 percent private label and 35 percent branded and our goal is 50-50.”
Innovo has had a breakout year, with the launch of its Eve line and Blue Concepts purchase, leading to sales growth of 115.9 percent during the third quarter ended Aug. 30 to $21.9 million from $10.1 million last year. The weight of acquisition and marketing charges, though, led to a third-quarter loss of $2.3 million, or 14 cents a share, compared with a profit of $820,000, or 5 cents a share the year prior.
Still, analysts say the company is poised for growth. J.P. Mark, senior analyst at Farmhouse Equity Research LLC, in a research note raised his fiscal year 2004 earnings per share for the company from 40 cents to 44 cents.
The approach has kept retailers and consumers clamoring for more products.
Jackie Brander, owner of Fred Segal Fun in Santa Monica, carries all three lines.
“Because they’re such a big company, they want to keep their customers happy and you can feel confident as a retailer that there won’t be damages or returns,” Brander said.
Da-Nang, the heavy hitter of the trio with sales expected to hit $30 million in its first year, gets its design direction from its name, which is a city in Vietnam. Its first season had a distinct military flavor, with pants, jumpsuits, skirts and jackets in washed-down, printed and dyed nylons. Produced in China and Vietnam, the line, which wholesales from $68 to $98, was the brand’s answer to the Juicy Couture sweatsuit.
But Albert Dahan, who used to run Joe’s Tees in the Eighties and most recently, NC Love dresses, said the company didn’t want the limiting label of “military,” so it has cleaned up its silhouettes with tuxedo pants, softened its prints, created solids, added new fabrics such as cotton poplin, silk herringbone and linens and heaped on embroidered touches, including rear-view Asian dragons. Newer additions include silk piquet lounge looks in ruched skirts that double as tube tops.
Racking up local boutiques American Rag and Lisa Kline and New York outlets Scoop and Atrium among its 200 accounts, Da-Nang’s future doesn’t rest on building an account base, but staying in bed longer with its accounts, Albert Dahan said.
“We want to do more business with fewer stores to keep things exclusive,” he pointed out. “We’re in the business of building a brand, not selling garments.”
And keeping control. Four months ago, handbags were added to the mix, dresses under the Rangoon label (in prints and solid washes) will launch at Intermezzo for spring and shoes will bow in February, but these are in-house deals, not licenses.
Joe’s Jeans is in its second year with Innovo, after Joe Dahan sold the licensing rights of his line to the company, a move he said that has added to the company’s visibility. In July, the company entered a licensing and distribution deal in Japan with Itochu Corp., helping boost sales expectations for the year to $25 million.
“Innovo has the mentality of investing in the future,” said Joe Dahan.
The company already has made a few changes. For spring, it’s added six new styles, geared to different body types, from the “Twiggy” to the “Honey.” “We wondered why companies offer one fit, because if our pants don’t fit the customer, she’s obliged to move to another brand,” he said.
Another addition is his fashion line of dresses, tops and leathers influenced by the Sixties. Saks Fifth Avenue and Henri Bendel are among the 100 stores that have picked up the 30-piece spring collection featuring Indian-looking silk blouses with sequins, silk dresses meshed with leather and cropped pants. Wholesale prices range from $68 for the tops to $180 for the dresses, up from prices at Joe’s Jeans that hover from $32 to $79.
“It’s a chance for me to create something sophisticated and pursue higher price points,” Dahan said.
Too, Joe’s Jeans now has the wherewithal to advertise, something Dahan relegated to indie mags in the past. He launched his first billboard campaign two months ago here, in New York and in Miami.
Yanuk is the newest line from the bunch. Launched under the direction of Guez’s Blue Concepts and run by his daughter, Anouk Irene Guez, and designer Ya-el Torbati, the line’s primary focus is washed denim, with fabrics sourced from Japan, Tunisia and Turkey. Torbati said she likes to create “basics with a twist,” giving the line a sophisticated edge. She adds extra belt loops to the waistband, inserts the sixth pocket inside of the back pocket or tapers her stitching.
As denim tastes shift, she has found strong success with the “Worker’s Trouser” look, which offers front slant pockets, and the “Pencil Pocket” which has front patch pockets and long, narrow, pencil pockets. Coated twills and two-tone corduroy round out the mix of pants, jackets and skirts. Fleece tops in cotton rib and baby jersey will bow in fall.
The line wholesales from $63 to $75 and sales are expected to hit $2 million to $5 million in its first year. Already, it has distribution in Europe, Canada, Asia, Japan and Kuwait, on top of its 200 accounts in the U.S. that include Barneys New York and Intermix in New York.