NAUTICA: A NEW APPROACH
Byline: Anne D’Innocenzio
NEW YORK — Nautica’s women’s line is changing course.
After two months of retail selling, company officials are trading the label down into better price points from bridge and cutting its career offerings in half.
Still, the question remains: Will Nautica, licensed by Bernard Chaus Inc., ever catch up to the other two new big names in the better zone, Lauren by Ralph Lauren and Tommy by Tommy Hilfiger?
Lauren and Hilfiger are moving right along in the better market with lots of advertising and big store rollouts since they reached the shelves in August. To better compete with them, Nautica has slashed its prices by 40 percent on its fashion basics such as polo shirts and woven shirts — items that account for 60 percent of the line. The overall average wholesale price point is now $32 for spring, compared with $54 for the current fall season.
As for its tailored fashions, that category will be only about 15 percent of the spring collection and will have a softer look, with such fabrics as silk linen blends and Italian cottons. Meanwhile, its outerwear offerings, which accounted for about 30 percent of the fall line, will be increased to 40 percent of the fall ’97 collection.
Nautica is also better tailoring its merchandise at its major store accounts, which include Macy’s and Lord & Taylor, to meet two emerging customer bases: the urban shopper, who tends to be more interested in heavy logo merchandise, and the suburban woman, who generally prefers classic looks such as sweaters in cotton or fleece.
Nautica’s in-store shops are also being spruced up with graphic images, better lighting and improved fixtures to encourage more multiple sales.
“There is definitely no middle ground,” said Michael Winter, president of the licensed division. “What is really selling is what is truly Nautica; either the heavy logo merchandise or the Nautica-inspired pieces, but not just basic items that can be bought somewhere else.”
Nautica officials are discovering that their female customer shops differently from her male counterpart.
“What we are finding is that women mix tailored looks with casual sportswear separates and activewear, while men keep those categories separate,” said David Chu, president, designer and chief operating officer of Nautica International, the sportswear arm of Nautica Enterprises Inc., the parent company.
“Women are also constantly interested in new fabrics, in particular synthetics, and new silhouettes. On the other hand, men stick to such fabrics as wools and cottons.”
Unlike Lauren and Hilfiger, Nautica entered fall market cautiously, shipping the line to only 70 stores. There are plans to increase that to 125 for spring. Lauren’s fall launch encompassed 270 stores, while Hilfiger’s involved 400.
And while both Hilfiger and Lauren are each pouring out some $25 million for the year to promote their better lines, Nautica spent only $1 million on its current fall campaign, which was limited to such magazines as Vogue, W, Harper’s Bazaar and Vanity Fair. However, it will step up its budget for spring and plans to showcase its other women’s licensed products as well.
“Our goal is to get the product mix right and then hype it,” said Winter.
“Nautica is getting into the women’s business more slowly. They are testing a lot and rolling out to fewer doors than the other two names,” said Laurence C. Leeds Jr., executive vice president at Buckingham Research. “It is a much smaller business than its competition, but they will do well. They are starting out with a smaller base, which I think is very smart.” Leeds praised Andrew Grossman, Chaus’s chief executive officer and president for his merchandising acumen.
On the other hand, R. Fulton Macdonald, an industry analyst, pointed out that Nautica lacks a designer image, which could make it hard to keep up with its competition.
“There’s a real personality behind the Hilfiger and Lauren by Ralph Lauren lines,” he said. “Nautica is more of a brand. There is no real personality behind it.”
Nautica officials expect the women’s line to generate $30 million in wholesale volume in its first six months, with sources estimating it could hit $50 million in its first year. In comparison, Lauren by Ralph Lauren and Tommy by Tommy Hilfiger are projected to hit $100 million in its first year.
Winter believes Nautica’s women’s business could eventually match its men’s business. The men’s sportswear line is in 1,200 doors, including some 850 in-store shops. Nautica also owns and operates two U.S. stores, in New York and in Newport Beach, Calif., and has 62 retail stores abroad.
For the fiscal year ended Nov. 30, 1995, Nautica Enterprises saw profits increase 32.4 percent to $29.9 million, with sales moving ahead 20.2 percent to $285.6 million.
As for Nautica’s spring sportswear collection, some of the items that have booked well include black slim pants in cotton and Lycra spandex, cotton and nylon jackets with reflective racing stripes, cotton poplin coats, cotton stretch twill pants, pinpoint oxford shirts, microfiber navy blue jackets, red zip-front cardigans and lime green nylon peacoats.
Retail executives note that the merchandise, which will continue to be located near DKNY and Polo Sport despite the change in price, was slow to take off, but they are now seeing improvement in sell-throughs.
“It got off to a slow start, but I am seeing the line showing strength,” said Lavelle Olexa, senior vice president, fashion merchandising at Lord & Taylor, which is stepping up the number of doors that will carry the line for spring to 18 from 11. “The casual business is much stronger than career.”
She noted that the colorblocking and the khaki basics, including the pleated-front and flat-front styles, did well this season. She added that the casual business is even more on the mark for spring.
“I think they can catch up to the other two launches. The Nautica name definitely is recognizable,” she said.
“Many of the really tailored looks did not do well, but the activewear did, including the jackets, the T-shirts and the fleece,” said Kathy Bufano, executive vice president and general merchandise manager at Macy’s East.
“Nautica’s performance has the lowest sell-throughs of the three,” said John Freudenthal, executive vice president of merchandising at Carson Pirie Scott. “But it has improved over the last few weeks, as we have gotten new deliveries. The prices have also come down and are in line with the other two. I saw the spring line and I thought it looked much better.”
Despite the improvement in product, Nautica officials admit that getting more real estate in the stores is the big issue.
Nautica’s in-store shops range from 600 to 1,000 square feet, but Winter said they are aiming to have all their shops at the top end of that range. But it won’t be easy, he admits.
“It is tough out there, with all the big names,” said Winter. “Everybody is jockeying for position.”