DIFFERENT IMAGES HELP MARKET AMERICAN JEANS IN EUROPE, WHICH IS FERTILE GROUND FOR GROWTH.
Byline: Janet Ozzard
NEW YORK — For many jeanswear manufacturers, the next horizon is international expansion.
The jeanswear market in the U.S. is close to saturation, as seen by the slowdown of basic five-pocket sales — the coin of the denim realm. That hasn’t slowed newer designer names, such as CK Calvin Klein Jeans, Polo Jeans and the denim-heavy Tommy by Tommy Hilfiger line, but sales there are often driven by related items and fashion denim, such as boot-cut and wide-leg styles.
So the established names, like Guess, Lee and Levi’s, have staked out territory in Europe and Asia. There, denim is an American icon and consumers seek out brands with that image — often paying 10 to 15 percent more for their jeans than the U.S. consumer. As a result, denim-based companies have seen significant and rapid sales increases abroad.
Levi’s, for example, reported total first-quarter sales of $691.2 million, outside the U.S. Much of that, the company said, was driven by a product mix emphasizing its 501 jeans and related products in Europe.
Last year, total sales outside the U.S. increased 6 percent to $2.8 billion, the company reported, attributing the gain to higher sales in Europe, particularly in Germany, the U.K. and Benelux nations (Belgium, the Netherlands and Luxembourg).
While it has long had design studios in Florence and a separate line for its European business, Guess has stepped up its action in Europe this year with the opening of a 5,000-square-foot store on London’s Brompton Road and a deal that calls for expanded jeanswear manufacturing throughout the Continent. It also plans to open a 7,500-square-foot London store on the hot New Bond Street this fall.
The jeanswear deal was signed last month with Fingen, which is owned by the Fratini family, who also manufacture CK Calvin Klein’s jeanswear in Europe.
“It’s important today to have a strategic alliance with strong partners if we really want to grow and maximize the business to the full extent [in Europe],” said Maurice Marciano, Guess’s chief executive officer, when he announced the deal. “Fratini will run the business there. We had been doing it, but it’s hard to run a business from so far away. We’ve planted the seeds, and we’re doing very well, but we want to keep momentum.”
Under the joint venture, there are plans to open 25 stores in Europe in three years in such cities as Lisbon and Antwerp. Guess also opened a flagship in London this week and signed deals for men’s wear and footwear in Europe.
In 1996, Guess’s wholesale volume in Europe was $27 million. Its total wholesale volume was about $460 million.
CK Calvin Klein jeans also opened an 18,000-square-foot megastore last month, in the fashion capital of Milan. The company plans to open seven more CK stores in Europe and the Mideast by August, and a total of 100 are planned over the next five years. The stores will feature the jeanswear as well as the women’s and men’s bridge sportswear. The jeanswear is manufactured and sold under an agreement with Super Rifle SpA.
But jeanswear brands are also getting more active within the industry, not just with consumers. At February’s Interjeans show in Cologne, Germany, such brands as CK, Lee, Wrangler, Chic/HIS and Guess either had booths or held events to promote their presence.
While the European consumer appreciates an authentic American jeans product, she also goes for more sophisticated fabrics and design, said manufacturers. CK Calvin Klein introduced black selvage jeans — a connoisseur’s jeans made from Japanese fabric and designed to show the edge of the fabric when cuffed — during Interjeans. Guess’s Florence design studio turn out edgier, more forward fashion than its U.S. counterpart.
And the companies are also getting into the European taste for racier advertising. While Lee in the U.S. tends to promote itself as wholesome, but sexy, its current European print campaign is a bit more risque.
A recent TV ad, “SpaceLink,” shows a man and a woman struggling to “get together” in the weightlessness of space. Their efforts are futile until the woman buttons her Lee jeans to his. The ad was shot at Pinewood Studios in England and was directed by Adrian Moat of RSA. The soundtrack from the spot was released in March as a single by Virgin Records and is also part of the album “Sacred Spirit Volume II: Culture Clash.”
Lee increased its European ad budget in 1997 to $35.64 million from $34.02 million (22 million pounds from 21 million pounds) a year ago, or 12 percent.
Derek Woodgate, the company’s European marketing director, said the new ad is aimed at building on the image Lee created with its last campaign, which featured a model portraying a young Gypsy Rose Lee and seductively stripping her jeans off in front of two young men.
In addition to TV and film, Lee has produced a series of print ads called “The Position,” inspired by the erotic Indian manual Kama Sutra. The first is “Launch Pad,” followed by “Missionary Impossible” and then “The Big Bang.” The print ads will run in European fashion and style magazines.
And Levi’s, which also has a rugged, wholesome image in the U.S., has even been boycotted — the ultimate accolade — for some of its suggestive ads.
A recent TV spot for the 501 style shows a young fisherman knocked off his boat during a storm. He awakes to find mermaids struggling to remove his jeans — but he pulls away from them and swims to the surface.
The ad was created by Levi’s U.K. ad agency, Bartle Bogle Hegarty, with creative direction from Jim Hegarty. It is being shown on MTV Europe and other programs across Europe, as well as on the company’s Web site and in stores. The company’s annual ad budget in Britain is $12.96 million (8 million pounds).