LUCKY BRAND ZIPS AHEAD
Byline: Michael Marlow
LOS ANGELES — Five years ago, longtime friends Gene Montesano and Barry Perlman launched Lucky Brand Dungarees, offering what they thought was a great-fitting jean at a reasonable price.
Today the Vernon, Calif.-based company has become one of the hottest names in the denim market. It rang up $36 million in orders last year, and sources said it could hit $50 million this year.
“I have never had a line in my store that I’ve done near the kind of volume with that I have with Lucky. There’s nothing out there that could conceivably take its place,” said Gil Mitchell, owner of Gil’s, a better jeans and sportswear store with three locations in Oklahoma City.
Before Lucky arrived on the scene, Gil’s buying reflected a boutique mentality — with four to 12 units of a specific style ordered each season. After Lucky took off, the store began ordering several hundred pairs of Lucky at a time.
“And we weren’t even concerned because we knew we’d sell it,” Mitchell said.
Lucky also is the hottest resource at Caruso Caruso, a better jeans store in Birmingham, Mich., with the label far ahead of No. 2 Diesel and No. 3 Replay.
“It’s a phenomenon,” said owner Frank Caruso. “They went into the jeans market when everyone said, ‘We’ve got enough jeans, give us something else.’ But they turned the market upside down.”
Retailers offer several reasons for Lucky’s success: great fit, good price, limited distribution and tongue-in-cheek sense of humor. Caruso said Lucky offers the feel and look of a European resource but at an American price.
“Not everyone can afford $96 for a pair of Diesel or $120 for Big Star, but they want a great fit,” Caruso said. “Lucky gives it to them [for $64].”
Montesano and Perlman worked together as retail clerks in the Seventies before launching Four Way Street, a contemporary jeanswear chain based in Miami Beach. Montesano left after several years to become a road rep, putting in a stint with Guess in its early years. His big break came in the early Eighties, when he launched Bongo, a mass market junior jeans label that would grow to more than $100 million in annual volume.
During this period, Perlman stayed in Miami Beach to run Four Way Street. After years of coaxing from Montesano, Perlman finally sold out in 1990 to move to Los Angeles and launch a new jeans line. After his many years at Bongo, Montesano wanted to work on product that was not limited by mass market restrictions.
“I wanted to make the best stuff possible, and not worry about what it costs,” he said. Today, Lucky Brand Dungarees sells an expanded collection of women’s and men’s sportswear, including eight styles of jeans each for women and men, vests, jackets, pajamas, boxer shorts and tops. Wholesale prices for jeans and wovens are $32 to $33. Jackets are $41, vests are $37 to $38, and knits are $17 to $18.
Fit was an important consideration for Montesano and Perlman. They set out to make the most comfortable fit, even trying on the different samples themselves before selecting what would become the basic and most popular style, No. 102 relaxed fit.
They also wanted to come out with a product that did not take itself too seriously. A four-leaf clover was stamped into the zipper pull. Labels on the jeans would read “Wear us, be lucky.” On the inside of the jeans, the fabric for pockets featured large red clovers.
But it was a simple smirk from Montesano and Perlman in the form of the fly treatment that received the most attention from retailers and consumers. If they were looking for an early gimmick, they found a blockbuster by emblazoning the message “Lucky You” on the inside of the jean exposed only when the zipper is pulled down.
“There were reports of people in bars with their flies open to show the ‘Lucky You’ message,” said Mitchell of Gil’s. “The inside of the zipper got people’s attention, but it also got people to try on the jean.”
Lucky became a quick hit at the small, upscale jeans boutiques that tested it. As word spread through the market, major retailers approached Montesano and Perlman. But the two have been reluctant to open the distribution too widely too quickly.
“You have to stay true to the course,” Montesano said. “You can’t let everyone else decide what you’re going to do.”
In limiting its distribution, the company has also held its allegiance to the specialty stores that have been with it from the beginning. Even if a large department store with potential to do great business approaches Lucky, it will stick with its smaller boutique in the area if the business with them is strong.
Nordstrom and The Buckle, based in Kearney, Neb., are Lucky’s largest accounts. Many of its other accounts are smaller specialty stores such as Gil’s and Caruso, stores that have dropped other lines because of their proliferation at the department store level.
“Girbaud was a good jean for us a few years ago, but then it was in every corner store,” Caruso said. “It lost its credibility.”
The Lucky phenomenon stretches across generational lines. At Gil’s, Lucky has the broadest range of customers of any label in the store. Owner Gil Mitchell said it is not uncommon for a father to come in the store and purchase a size 38 of the basic 102 jean while his daughter picks up the same style in her size.
Lucky has opened only one of its own stores, on La Brea Avenue in Los Angeles, in 1993. Another is set to open in March on State Street in Santa Barbara.
Montesano and Perlman hope to eventually operate up to 50 stores in the U.S., but no timetable has been set.
Watches and sneakers are currently being developed for a spring introduction and fall deliveries. The key to future success, they said, will be controlled growth in limited distribution.
“If it just stays the size it is now, I’d be happy,” Montesano said. “I don’t want to be where you’re in every store with Lucky product coming out your ears. I just want to make great stuff and keep it special.”