JERELL’S DIVERSIFIED APPROACH
Byline: Holly Haber
DALLAS — Diversified niche marketing may sound like an oxymoron, but it’s a bankable strategy for Jerell Inc. here.
The clothing maker has a flurry of new ventures exploding like popcorn, each targeting a different narrow segment of the moderate market. Jerell’s fastest sales growth is coming from Stonebridge, a two-year-old line of country casual sportswear sold strictly to Dillard’s that is expected to mushroom from $15.5 million in wholesale volume this year to $25 million in 1998.
Stonebridge is an example of the firm’s strategy of providing one-stop shopping for retail chains that want exclusive or private labels. Another big project is Jerell’s move into social occasion dressing — a new category for the company. Jerell has a three-year contract to manage design, merchandising, marketing and sales for Lawrence Kazar and Brilliante beaded dresses and separates — a $40 million business.
“It’s complementary,” noted Sam Klapholz, national sales director. “It doesn’t conflict with our other businesses, and it feeds to our strengths in sales, marketing and merchandising.”
The company has several other prospects.
To snare teenage Hispanic customers, Jerell introduced in September a snappy junior line for spring bearing the name of slain Tejano star Selena.
For big women who want classic casual clothing, Jerell this year created the River Chase line of denim and printed sportswear. It’s expected to do $1 million in its first year and is the fastest-growing part of that $6 million business. To build its Sandra Salcedo sportswear business, Jerell is bolstering sales efforts to place it in additional stores besides J.C. Penney, which has carried the Hispanic-oriented line for 18 months. Jerell also has licensed the Salcedo label, which targets Hispanic customers, for lingerie, children’s wear and bedding.
All this is on top of the 38-year-old company’s longtime labels: Ali Miles and Ali Miles Signature sportswear, Melissa dresses, Stephanie Thomas large-size sportswear and Victoria Morgan dresses for older women.
“Staying diversified has always been our goal and the key to our success,” said Ed Vierling, president and chief executive officer. “When something got slow, we always had another concept to fall back on. When dresses got soft, we had sportswear. Now, we are trying to get involved in more niche markets like Stonebridge or Sandra Salcedo or Selena. Those are small niche markets, but there aren’t a lot of people in them and we feel they have big potential.”
A conservative estimate for 1998 sales is $60 million, Vierling said, following $50 million this year. Those figures don’t include the Kazar and Brilliante special occasion lines or the three Sandra Salcedo licenses. Ideas for new products and marketing tactics come from Vierling and Klapholz.
The pair are especially enthusiastic about the new Selena collection, which is licensed by the late singer’s family business, Q Productions. They expect to do $10 million in first-year sales.
“It’s the only product I’ve been involved with that has an audience that is ready, wants it and is asking for it,” Klapholz asserted. “I don’t recall ever being involved with anything that had so much interest.”
“It’s not just Hispanic people,” added Vierling. “Selena has a very strong crossover customer.”
He pointed out that Selena’s image is even printed on checks and a credit card issued by Bank One.
The line incorporates basic denim jeans, skirts and skorts, plus crop tops, hip-hugger and boot-leg pants in novelty nylon fabrics, including sheers, bright floral and ombre prints, stretch twill, stretch lace and stretch satin. Every piece has Selena’s signature logo, but it is usually small and discreetly placed, the edge of a sleeve, for example. Wholesale prices range from $9 to $20.
The strongest growth in the company’s sportswear business stems from country casual looks that mix denim separates with small floral prints and broomstick skirts. Stonebridge, River Chase and Ali Miles Signature all reflect that style and are the fastest-growing divisions in the company. The lines are reminiscent of Susan Bristol, Cambridge Dry Goods and Central Falls, Vierling said.
“We hit a certain price,” Vierling said of the line, which wholesales from $12 to $34.
“There is a customer who believes that classic clothing is the best thing to buy because it doesn’t go out of style,” Klapholz noted. “You don’t have to worry about what’s in or out. There is nothing to object to.”
Stonebridge, which did $4.5 million in 1996 and $15.5 million in 1997, is sold in all 262 Dillard’s stores. Jerell hopes to build on the Stonebridge strategy of creating private labels for stores.
“It’s a new way of doing private label, where we handle all the design and manufacturing,” Vierling explained. “We are approaching some stores on additional private label projects.”
And Jerell is ready to give a renewed push to its Sandra Salcedo line of sportswear, which is expected to end this year with $2 million in sales.
“We showed it initially to a couple of other stores [besides Penney’s] that didn’t feel they had a large-enough Hispanic trade,” Vierling recalled. “That feeling is starting to change a bit because it has some success behind it. We feel the market has expanded now, and we’re going to go back after those stores again.”