Lucky Brand management made no secret about its strategy to become a more multidimensional brand.
Numbers released during a talk during the Global Retailing Conference in Arizona by chief executive officer Carlos Alberini provided greater insight on why the company’s strategy could potentially work.
“We felt that Lucky Brand was always a great brand. Very clean distribution and a brand that had been around for almost 25 years at the time,” Alberini said. “But it had lost some relevance and we [felt we] could do something to reenergize the power of the brand.”
The company’s sales peaked under the old management at $477 million in 2008. Around 2010, when the company’s founders exited the business, sales were about $387 million. Sales last year were less than $600 million with the company saying last year it was looking to hit a $1 billion target in the next five years under the wing of Los Angeles private equity firm Leonard Green & Partners, which paid $225 million for the company in 2014.
The key to doing that has been understanding Lucky’s customer base, Alberini said.
The brand benefits from a slightly older shopper base, with 79 percent ages 35 and up with some 66 percent of those with kids. More than half, or 57 percent of customers, have incomes of more than $80,000.
A study of Lucky advertising pre-Alberini’s leadership involves imagery of models in skin-baring clothing. New marketing materials feature slick, contemporary looks. Alberini did a side-by-side comparison in his presentation of an old campaign image of a young couple and a new one, also featuring a couple, but “really catering to the family versus whoever they were catering to,” he said trailing off and eliciting laughter from much of the conference audience who could see the notable difference in styles.
The company’s broader plans to be a “premium lifestyle brand” has meant a fuller assortment of categories such as outerwear and home goods. The company has nine licensing arrangements and is in the midst of securing two more for swim and men’s wear, Alberini said.
Customer research immediately following the company’s 2014 acquisition surveyed Lucky customers on what they were buying product for. Most, about 85 percent each for both men and women, said they were wearing Lucky for weekends. When asked if they would buy more Lucky product for weekends, customers said no. The same question posed for apparel worn for going out bore different results with about 64 percent of women saying they wore Lucky for going out at the time of the 2014 acquisition and 77 percent saying they’d buy more if the company offered more.
Alberini said the expanded assortment has helped the company grow its online sales with e-commerce up 40 percent to $58.39 million. That follows 22 percent growth in 2014 to $41.78 million in e-commerce sales for the brand.
Last year’s introduction of a new retail store design — the first of which debuted at The Point in El Segundo, Calif., which more than doubles its average store footprint, appears to be successful. The door in El Segundo has seen increased conversion with spending higher there, according to Alberini. The Point has been followed by the recent opening of a similarly formatted store in Las Vegas and the company’s also taking a similar approach with its outlet channel.
The company’s finding that stores in Middle America outperform those in coastal markets also shows an opportunity for the brand to double its store count in the U.S., although Alberini was less specific on the timetable for that saying there’s room for “big expansion someday in distribution.”