LIZ CLAIBORNE, PENNEY’S SADDLE UP TO REVIVE CRAZY HORSE LABEL
Byline: Anne D’Innocenzio / With contributions from Thomas J. Ryan
NEW YORK — Liz Claiborne Inc. has revived Crazy Horse and is riding the brand into what could be a powerful new partnership with J.C. Penney Co.
Claiborne said Wednesday that it plans to exclusively market the label, dormant for almost a year, to Penney’s, virtually a new distribution channel for the $2.1 billion apparel giant.
The brand, which will be in 350 doors starting August 1998, will feature fashions for casual office attire and weekend wear. Aimed at a 30-to-54-year-old customer, it will be merchandised in the same area as Penney’s established battery of upper-moderate, casual private and brand names, including Jones Wear Sport, Hunt Club and Dockers, according to Marilee Cumming, Penney’s president of women’s apparel. The label will read, “Crazy Horse, a Liz Claiborne company.”
Officials at both Claiborne and Penney’s declined to disclose sales projections.
This new venture is part of Claiborne’s aggressive strategy to beef up its special markets division, expected to hit a total sales volume of $200 million within the next few years.
The category also includes Emma James, an upper-moderate line aimed at department stores; Russ, which has been reinvented as a mass brand; Villager, a business casual line targeted to family-oriented promotional department stores, and First Issue, a Liz Claiborne Co., which was resurrected in December 1995 as an exclusive line for Sears, Roebuck & Co.
Crazy Horse — which, along with Villager and Russ, had been acquired in 1992 by Claiborne from the now defunct Russ Togs — had been floundering as a casual line targeted to a younger audience. In its new form, the line will feature cleaner graphics and will be rid of its horse icon, according to Kim Roy, president of Claiborne’s special markets division.
“The addition of Crazy Horse really complements our strategy to diversify our portfolio,” said Roy, adding that the company had been in discussions since January with J.C. Penney’s regarding this exclusive deal.
She continued, “It fits in with our overall corporate strategy to extend our brand portfolio, from bridge to mass market. Now with the addition of Crazy Horse, we are really attacking in a meaningful way every segment of the market.”
In addition to its core better sportswear labels, the company also markets bridge-priced Dana Buchman and its casual counterpart, Dana B., and Karan.
In the past, the company had done minimal business with Penney’s, with the Villager and Crazy Horse labels.
For Penney’s, the move is part of its strategy to strengthen its offerings in its upper-moderate, private label casual lines.
“In our three-year plan, we are developing a balance between budget, moderate and upper moderate,” said Cumming. “Crazy Horse fits in with our strategy to strengthen our casual sportswear offerings in upper moderate.” Price points have not been set for the Crazy Horse line, she added.
As for Claiborne’s other labels in the special markets division, the company has been doing some fine-tuning. Villager, which will be in 500 doors for fall, has evolved into a career and casual line targeted to family-oriented promotional department stores, such as Kohl’s and Mervyn’s. For spring, the line will be in 75 Goody’s stores and 75 Upton’s stores.
Emma James, which had a lackluster reception when it hit the stores in January, has undergone a makeover. The line, which will be in 400 doors for fall, is now more item oriented and features more knitwear offerings. Price points have been slightly lowered.
First Issue, the exclusive brand for Sears, is now evolving into a business casual line, starting for third quarter 1998. It had been collection oriented. The line is in 481 doors, of which 150 of those units are in special sizes, Roy said.
One of its major successes has been with Russ, Claiborne’s mass knitwear brand, which will be in 800 Wal-Mart doors and 300 Kmart doors by the middle of this month.
“We are beating our plan on Russ,” said Roy.
Speaking Wednesday at the Robertson Stephens investment conference at the Pierre Hotel, Paul R. Charron, Claiborne’s chairman and chief executive officer, said Claiborne has “long admired” Penney and has been anxious to work with them for some time.
However, Charron said he doesn’t expect popular and moderate price points to ever exceed 15 to 20 percent of overall sales, noting the demand for these brands stems from the cache of the Claiborne brands featured in the better department stores and specialty stores.
He expects the performance of the mass brands to do “significantly better” in 1997 than 1996, but looks to see wider profit swings in those brands next year.
Charron’s talk largely covered Liz Claiborne’s turnaround under the LizFirst program of various initiatives launched in 1995.
Charron pointed out that the company has had 10 consecutive quarters of earnings gains and six consecutive quarters of sales gains. He said third-quarter business “continues to check quite strong” and that momentum “has accelerated” from the first half.
He said Claiborne will have 676 in-store shops in department stores by yearend, exceeding a goal of 375 at the start of the year because of strong demand from retailers. Another 500 shops will open in the first half of 1998.
He also said there will be 500 Claiborne consultants at the department store level by yearend.
He said a test of a “product placement umbrella” program specifically for Dayton Hudson has increased sales, margins and turns, and Claiborne is setting up similar retailer-specific programs with Macy’s East and Nordstrom. He expects this will double sales to Nordstrom in 1998.
On the downside, Claiborne’s career offerings have “not made the progress” that its casualwear business has made in recent years, and he said “new leadership” in career will be announced in coming weeks.