When it comes to navigating Oscar de la Renta Ltd. through the recession and beyond, “nothing is off the table as far as moving the business forward.”
So said Alex Bolen, chief executive officer of Oscar de la Renta, who outlined areas for change — actual and potential — at the enduring designer house.
Bolen was blunt about the recession’s impact on luxury, but he also was hopeful about weathering the economy and building a better future.
He emphasized developing a wider range of products and prices. “We have opportunities at the high [end]. We have opportunities at the low. We need to pursue both of them,” Bolen stressed.
Underscoring that point, he cited the brand’s recent entry into fashion jewelry, now a multimillion-dollar business seen growing, though there’s really no trading down. “We recently relaunched our couture business on a very quiet basis,” Bolen said. “We will offer this to customers around the world.” It may seem counterintuitive, given the state of the economy, but Oscar de la Renta has been doing a “brisk” business in furs and bridal gowns priced at more than $20,000, Bolen said.
And to encourage sales across the collection, the company has been stepping up special events at its own stores, with additional parties and dinners. De la Renta’s visibility in retail and fashion circles, and popularity on a global basis, seems like it’s never been higher. The company this week opened its first store in the Middle East, in Dubai, joining two other freestanding international stores opened earlier this year and bringing the total count to 11. It also has an online boutique and plans to open a store in Moscow later this year.
Bolen also cited possibly shifting some production, currently concentrated in Italy and the U.S., to different countries. The objective would be greater speed-to-market. “We all have some lessons to learn from the fast-fashion business,” such as Zara and H&M, Bolen said. Addressing other challenges confronting the industry, Bolen said it’s imperative to wean customers away from habitually holding back from buying fashion in hopes of getting the products at sharp discounts later in the season. “We’ve got to change that,” he urged. Part of the solution rests in doing a better job at communicating the value in products. “People need to understand getting good value for their money,” Bolen said.
The ceo said he looks back wistfully on September 2008. At that time, his business was up 30 percent. “In retrospect, the words ‘fat, dumb and happy’ come to mind.”
Then, by early October, “there was almost a complete cessation of shopping.”
Since then, many involved in the fashion industry have come to believe there’s been a permanent reset in consumer shopping habits. But Bolen had a bit of a different take on consumer behavior. “The idea of people abstaining is far-fetched, but business will not be the same,” he said. “Abstinence on a sustained basis is not human nature. Our market will come back.”
Bolen cited a report from Bain Capital that global luxury goods will be down 10 percent for the year. “Ten percent feels a little light,” he said. Nevertheless, “Things are certainly starting to feel better, but we are not out of the woods….I suspect for the best of collections in the designer business, inventories are going to be dramatically reduced.”