CUTS ROCK AILING CASUAL CORNER

Byline: Sharon Edelson

NEW YORK — Two months ago, Claudio Del Vecchio forced Leopoldo Borzino out as president of Casual Corner and took the job himself, but former employees said that was nothing compared with the bloodbath that took place this week.
Del Vecchio, who has been trying to resuscitate the ailing nationwide chain, opened a new fashion office in Milan to capitalize on Italian fashion, fabric and trends, and hired a chief merchandising officer, Eraldo Poletto.
At the same time, he began what he called “streamlining the New York office.”
“We will have less designers in New York,” Del Vecchio said Wednesday, declining to comment on the number of employees who were let go. “We overbuilt the office here. Some people are staying and some are being streamlined. We are not eliminating any of the functions we had.”
But an employee of the office said that half of the 150-person staff had left, including Mara Urshel, the former Saks Fifth Avenue general merchandise manager, who was president of brand development. Urshel could not be reached for comment Wednesday.
“I left the company because there had never been a clear management direction from the owner or top management,” said Michael Leva, the design director who resigned two weeks ago. “There has always been a battle for power and design. I was always caught in the middle. I was guaranteed that the company was going to be design-driven and not merchant-driven. For the entire year and a half I was there, there was a constant battle.”
Still, Leva said, he made some headway in the area of design. For fall, his “stylized and design-oriented” suits in a base cloth of wool, Lycra spandex and nylon will be in stores.
“For Casual Corner that’s a milestone,” he said. “Those collections should be very strong.”
Del Vecchio, however, is trying to make his own strides, even if it sometimes seems like an uphill battle.
He invested in a new distribution center in Enfield, Conn., and has been pouring money into management information systems and enhanced training for the company’s 12,000 associates.
There will be a print ad campaign in the fall, although Del Vecchio declined to divulge details.
The company is also going narrower and deeper with fewer stockkeeping units, he said.
“The fear was we weren’t going to have everything we need,” Del Vecchio said. “There was no commitment on color or fabric. We have to go along with the market. We have to take a position on whatever the key color is going to be.”
Del Vecchio has developed a new prototype for what he calls a “superstore” concept, which brings two or more of the company’s brands — Casual Corner, Petite Sophisticates and August Max Woman — under the same roof.
Del Vecchio developed the concept in part to maximize economies of scale. Typical Casual Corner units are 4,500 square feet. The new superstores, which are between 6,000 and 10,000 square feet, have a clean look, with wood floors and European blond wood fixtures.
“The superstore is a test at this point,” Del Vecchio said. “We’ll see if the efficiencies we think we can gain are really there. The idea is to use associates more efficiently and save on rent. If it works, most of the new stores we open will be of that concept.”
So far, the company has opened superstores in Naples, Fla., and Houston and Austin, Tex.
But will this be enough to save Casual Corner, the career-oriented specialty chain that has been trying to regain the momentum it had in the power-suited Eighties? Since then, the chain has been losing money, closing stores and lacking a consistent image.
Casual Corner had $808 million in sales last year, according to estimates by the investment banking firm Schroder Wertheim. The chain reportedly continues to post losses. Sources said it lost more than $20 million in February alone.
“We’re going to do the best we can and let the consumer decide,” Del Vecchio said. “We want to send a very strong message. We’re changing the quality level and changing the goods in the store. Probably the biggest problem Casual Corner had was quality of the goods. Then, when we improved the quality, the message we were sending to the consumer wasn’t very clear.
“Today, you still don’t have a very clear idea of the consumer we are trying to appeal to.”
Casual Corner still wants to attract the career woman but will tailor its assortments around her sartorial needs, which have changed considerably over the last decade.
“The balance of different categories will change,” Del Vecchio said. “We don’t think we can sell as many suits today as we did 10 years ago, but suits are still an important part of the Casual Corner business. We have to address the change in the market. We introduce more casual wear every day but do it in a way that still works with the rest of the offering.”
Poletto, who ran the Character chain of men’s and women’s wear stores in Italy, is responsible for articulating Casual Corner’s new direction at retail.
“Store merchandising is his strongest point,” Del Vecchio said. “He’s not a designer, but he knows how to get the best out of designers to make the store look the way we want it to look.”
For a decade, Casual Corner, which has 550 stores, has continually struggled to find a niche, switching from an emphasis on casual to career, and vice versa.
Two years ago, Luxottica Group purchased U.S. Shoe Corp., primarily for the Lenscrafter eyewear chain. Through the purchase, Luxottica also picked up the former U.S. Shoe’s women’s retail group, including the Casual Corner, Petite Sophisticates, August Max and Casual Corner & Co. outlet chains. The four chains have a total of 1,200 stores.
Claudio Del Vecchio, whose father is Leonardo Del Vecchio, chairman of Luxottica, said Casual Corner opened offices in Milan “to help us stay closer to what’s happening in Europe,” but American employees said his goal is to “replace us with Italians.”
Richard Jaffe, a retail analyst at Schroder Wertheim, said European styling may not be enough to battle the big department store brands.
“It’s the same price point as Jones New York, Tommy Hilfiger and Lauren by Ralph Lauren,” he said. “They have to do something dramatic and work very hard at repositioning a very old, stale concept. The business has been through several dramatic transitions and is losing some of the brand equity as a result.”
Del Vecchio and Leva agree on at least one thing.
“The last quarter of the year is when you’re going to see the complete picture,” Del Vecchio said. “You will see the new Casual Corner.”

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