VF’S MASS APPEAL
Byline: Janet Ozzard
NEW YORK — The mass market jeans customer wants the same things as her department store counterpart: a nice display, a decent range of fashion, a flattering fit and a brand she can trust.
Often, she doesn’t get it. That’s the belief of Angelo La Grega, president of mass market jeanswear for VF Corp. Two of the three brands that he oversees — Wrangler, Hero and Rider — were credited with boosting VF’s domestic jeans sales 4 percent in its second-quarter earnings report released in July.
For the second quarter ended July 5, VF’s earnings, as reported, rose 12.9 percent to $78.9 million from $69.9 million a year ago. Sales for the three months were up 2.8 percent to $1.25 billion from $1.22 billion.
“We have very strong brand names, and each has its own distinct brand positioning,” said La Grega and Phillip Dunn, vice president of consumer marketing, in a phone interview from their Greensboro, N.C., headquarters. La Grega also oversees the Rustler brand and will take on the Brittania label that VF recently acquired from Levi Strauss.
“We have a tremendous opportunity to grow the business with women,” said La Grega, adding that he feels the best way to hook the consumer is with a combination of good display, leveraging the brand’s identity and the right approach to fashion. La Grega would like to see VF’s share of mass market jeans grow 5 or 6 percent over the next year, to about 36 percent. He plans to target more products to junior consumers and to large-size customers.
The Wrangler brand, said Dunn and La Grega, is aimed at a classic, conservative customer for whom comfort is a priority, they said.
“It’s for people who dress for themselves, not to impress others, and who are into comfort,” said La Grega. Riders is targeted to a slightly younger customer, someone who still wants a comfortable fit but also wants to look good.
Wrangler, which has annual wholesale volume of $1 billion, is predominantly a men’s wear business. The brand has close to 50 percent of the men’s business in discount stores. According to market sources, Riders does a couple of hundred million dollars in annual sales, with two-thirds done in women’s.
With Brittania, La Grega said, VF will go after the junior mass customer with more fashion and related products. But right now, he said, it’s important to communicate to all women shopping in the mass channel that they can find jeans there. Female shoppers, he said, tend to see the mass outlets as hard-goods vendors rather than fashion centers.
“America shops at the mass channel,” he said. “We know that the majority of people shop there, but not everyone shops there for jeans. So we want that consumer, the lady who is going in there buying a box of Pampers for her 12-month-old, and she sees our brand. She knows it because she’s been buying it for her husband, her kids, but she goes elsewhere when they’re for her.”
Still, mass market stores such as Kmart and Wal-Mart have been trying to build their soft lines areas, and jeanswear, which can be treated as a commodity, is a natural there, said La Grega.
“[The stores’] agenda is definitely to grow the soft lines,” he said.
While he’s confident the women have a strong idea of the value of the mass brands, La Grega said Riders and Wrangler must sharpen their focus on other aspects of the consumer psyche.
“We are spending additional funds on the women’s brands, and we want to be the most important dominant brand,” he said. “We will stay very focused on the consumer’s needs and deliver the right value — which is a combination of price relative to other benefits. We are making sure the product is right, that the research is right. Does it match up to their needs?”
As for the challenge of private labels, La Grega said those are simply part of the market today.
“There are always people who want a lower price, and private label delivers that,” he said. “We’re a complement to that. And the retailers who develop their private label as a brand will be the most successful with it.”
La Grega said VF has increased spending on the mass brands in market research and for such image-boosters as advertising, marketing and in-store fixtures. Spending is up about 30 percent over the previous year, although La Grega would not say what that budget was.
According to Competitive Media Reporting, VF spent $30.9 million on media in 1996 on its Wrangler and Rider brands.
“What we have found at the mass channel is that the consumer is definitely looking at price, but the majority are looking for value,” said La Grega, adding that VF has commissioned numerous focus groups and consumer studies.
“Value is a combination of the emotional benefit of how the consumer feels when she puts that product on, plus the rational benefit of the pure product — how the brand meets her lifestyle needs.”
Wrangler and Rider also address another fundamental question of jeanswear sales: fit.
“It’s so, so critical in the female market,” said La Grega. “It’s a given, but it’s an unmet need. We’ve done studies that show that buying a pair of jeans is the second-hardest purchase for women, after a bathing suit.”
And if that’s right, he said, the consumer will become fiercely loyal — to a point. There still has to be the right cocktail of finish, silhouette and color. Wrangler and Rider offer those, he said, but that needs to be communicated more directly in the stores.
“The consumer definitely wants fashion,” he said. “It’s one of the most important things we’re bringing to the party. And we’ve seen that the lag time of a successful look moving from the upper tier to the lower tier is very short. For example, color was selling very aggressively in the lower tier well before it was meaningful in upper tier.
“But we have to make sure the stores present it well. If flare legs are important, we have to make sure they have it at the right time, in the right quantity. Flare may be 30 or 40 percent in the junior mass business when it’s 50 percent in the upper tier.”
VF has invested millions in its sophisticated tracking and replenishment systems, so La Grega said he’s not worried about the crucial issue of inventory. But he does want to get more involved on the sales floor.
“We do a very good job on the basics, but we need to highlight fixtures and showcase the product better,” said La Grega. “And once we’ve done that, we need to exit the product better. By that, I mean move the product out quickly and move in new looks, so that it never looks stale or old.”
He is accomplishing that by installing what’s called an “impact center” in the display areas for Wrangler and Rider. Those are fixtures that contain new fashions, including related woven or knit pieces. They are surrounded by areas that contain the basic fashion that is VF’s bread and butter.
“The consumer is demanding more variety,” said La Grega. “And the floor space is not going to get bigger. We need to use space more efficiently. We are doing more and more with tops and with our licensed partners to merchandise our lines and their lines together from the beginning, as a lifestyle presence.”
VF will also get in with retailers to use that space, said La Grega. The company is working on what’s called “micromarketing,” where it helps chain retailers diversify their offerings in various locations, so that two Kmarts in different neighborhoods of the same city could carry vastly different assortments, depending on the customer base.