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LOS ANGELES — Upscale jeans makers are working hard to rise above the third wave of premium denim’s 15-year life cycle — the one defined by its maturity — rather than be swept up by it.

This story first appeared in the October 23, 2014 issue of WWD. Subscribe Today.

Spurred by the proliferation of higher-priced fashion jeans, the shift by customers to ath-leisure influences like yoga pants and changes in consumers’ lifestyles, jeans firms are shaking up their organizations and making tough decisions about where to spend their money to ensure they remain relevant and competitive.

The search for the elusive “next big thing” has yet to materialize.

As they attempt to grow into lifestyle businesses and retail empires outside of denim, they’re also facing a kind of identity crisis, forcing themselves to ponder how far a brand can diverge from denim and still be called a denim brand. As a result, brands are adopting a wide range of strategies.

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Many are doing so under the guidance of new ownership from companies who rushed in to take advantage of the strength of various premium brands when the higher-end jeans market approached its peak. Fast Retailing Co. bought J Brand; private equity firms have acquired control of all or part of such companies as True Religion Apparel Inc., Lucky Brand Jeans, NYDJ Apparel LLC and Paige Denim; Joe’s Jeans Inc. purchased rival Hudson Jeans; Iconix Brand Group bought control of Buffalo David Bitton, and Western Glove Works acquired Simply Blue, marketers of Jag Jeans and Christopher Blue denim.

Earlier this month, J Brand announced a trio of hires — Mary Bruno as head of design, Ellen Ahlbom as senior vice president of sales and merchandising for the women’s market and Tony Strippoli as senior vice president of sales and merchandising for men’s — to build a lifestyle business bolstered by freestanding stores. Establishing the newly created positions dovetailed with recent decisions to lower prices to $68 to $108 from $150 for T-shirts and $958 to $1,195 for a leather and Neoprene biker jacket.

Firms have had to make decisions about their priorities. Silver Jeans Co. abandoned its plans to assemble a fleet of up to 50 stores over the next decade and sought Chapter 11 protection for its retail subsidiary, closing all but one of its six stores, located in the Mall of America in Bloomington, Minn. Its dominant wholesale business isn’t affected.

Some designers exited from the category altogether. Earlier this year, Daniella Clarke shipped her final collection for Frankie B., the Los Angeles-based brand that helped propel the premium denim industry in 1999 with its ultralow-rise jeans, only to jump into activewear the next spring as a collaborator with Solow, also from Los Angeles.

“The denim landscape has changed tremendously,” said Lady Fuller, chief executive officer of the Blue Jeans Bar, a denim retail chain based in Aspen, Colo. “In my opinion, it has changed more in the past year. People are struggling in the landscape.”

Fuller doesn’t need to look far for examples of financial difficulties. In the past 12 months, she’s closed 11 of her own stores stretching from Boston and New Orleans to Santa Barbara, Calif., and Denver. At her peak, she commanded a domain of 18 stores run by 150 employees. Now, she oversees 50 employees and six locations.

To survive future fluctuations in retail, Fuller is borrowing successful tactics from other industries. Take the subscription box networks, whereby customers receive a monthly shipment of products based on their tastes. She christened her version as the Blue Jean Box, a free monthly service for men and women who receive jeans, sweaters, T-shirts and other items sold in her stores and end up paying for what they keep.

Launched in June, it has already tallied 500 subscribers. She’s also trying her hand at sponsoring gifts for corporate retreats and hosting direct-to-consumer parties in homes, flying as far as Sydney to give away Ugg shoes to attendees at one confab.

“It’s easier to sell 900 pairs of Uggs to a corporate client than to sell one pair every day to someone walking into my store,” Fuller said, adding that the new ventures are “10 times more profitable than the retail stores.”

Like everything else in fashion, the premium denim industry’s success is cyclical. The industry’s first wave began building from 1999 to 2001, with the founding of brands such as Frankie B., Seven For All Mankind, AG Adriano Goldschmied and Joe’s Jeans. The growing popularity of dresses in 2007 precipitated the crash of the second wave, only to be followed by the Great Recession that ended in 2009. Even the aftermath of the Great Recession was eased by a rush of trends, particularly the proliferation of vivid colors not already represented in women’s wardrobes. While there’s been no lack of new denim ideas since the drop-off of color, no single look or combination of looks has compensated for the decline and so inspired women to buy multiple pairs of jeans.

Given the absence of a prevailing trend and the momentum for athletic-inspired clothing, sales for the premium denim sector have fallen faster than those for women’s jeans overall. A more recent figure isn’t available, but in the 12 months ended in March, women’s jeans that sold for $75 and more — after markdowns and discounts — accounted for about 8 percent of the category’s $8.34 billion total, or about $665 million, according to data from The NPD Group. Dollar sales at $75 and above have continued to drop faster than the overall market in more recent months, NPD said.

“It’s constantly evolving,” said Joe Dahan, the namesake founder and creative director of Joe’s Jeans. He noted that jeans were rooted in durable workwear before branching into flattering fits and washes. “It’s going into a whole different direction,” he said. “It’s solution-driven. There is so much science and technology in the mills.”

Dahan integrated cutting-edge technology into his designs. Introduced this fall, a style named Fahrenheit, made with insulated yarns, is touted to keep the wearer warm, while another, dubbed Cool Off for spring, tries to keep the legs cool.

“Now I’m working on a jean that is antibacterial and self-cleaning for fall 2015,” he said. “When the market is tough, innovation drives product.”

Unlike the knee-jerk reaction during the Great Recession to instantly slash prices, certain executives view it worthwhile to target specialty stores that sell high-end labels and don’t discount as much, even if that’s at the expense of volume. Emphasizing pricier washes that evoke a vintage vibe, Citizens of Humanity experienced a double-digit increase in sales in its men’s and women’s business this fall. It managed to pick up tony accounts such as Club 21 in Singapore and Browns in the U.K. Its diffusion line, A Gold E, is shifting to more novelty fashion with acid washes and destruction for its sophomore collection this fall.

“Frankly, the same thing the customer has seen in the past three years, those products are slower [to sell] because everybody has those in their wardrobe,” said Amy Williams, president of Citizens of Humanity and A Gold E.

As denim brands aspire to become lifestyle brands, they also need to think beyond their usual parameters. “Denim is not enough,” said Tommaso Brusò, ceo of Diesel USA. “We are rooted in denim but we are a lifestyle brand. There’s not anything in the middle right now. You’re either premium or fast fashion.”

Some designers enjoy the freedom to think outside the box. Just five years ago, Hudson Jeans wouldn’t have been able to sell fabrics like crushed poplin.

“I personally like the idea of being more versatile,” said Ben Taverniti, creative director of Hudson Jeans. “To me, I don’t want Hudson to be that one-trend type of thing. It’s more of a brand.”

Still, creators must take care not to go overboard with trends. “It’s important to reflect trends when they’re appropriate for the brand, but we need to be true to who we are,” cautioned Barry Miguel, president of Seven For All Mankind.

Many brands still see opportunity in building their own retail networks. As it hits the reset button on its tops business for the second time in two years, AG Adriano Goldschmied is gearing up to open a new full-priced store in Las Vegas — its 10th — by the holidays. Still tracking double-digit sales growth, although below the 50 percent gains of previous years, the South Gate, Calif.-based company needs shopping venues to highlight its design projects slated for next year, including a men’s golf line called AG Green Label as well as a collaboration with “It” girl Alexa Chung that will extend through next fall from its launch in the spring.

“The collaborations are a great way to keep things fresh,” said Sam Ku, AG’s vice president and creative director.

Besides, retailers — who’ve worked to reduce their jeans inventories to reflect weaker demand and promotional conditions — remain hopeful that the market is approaching an inflection point and that the third wave will lift sales again.

“We haven’t had a big denim trend in a while,” said Lauren Yerkes, divisional merchandising manager at Revolve Clothing, who stocks brands such as Frame Denim, Current/Elliott, Mother and Lovers + Friends. “If we can get something for 2015, I think we could be in good shape.”

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