SEARS STAKES CLAIM IN ARIZONA TERRITORY WITH NEW DENIM LINE

Byline: Catherine M. Curan, with contributions by Holly Haber

NEW YORK — The surging private label denim business is about to get a new and powerful entry.
Sears, Roebuck & Co. will make a run at J.C. Penney’s lucrative Arizona denim business with its own line for men and women called Canyon River Blues.
Sears declined to comment on the new label, but the women’s line will be manufactured by El Paso, Tex.-based Cactus Apparel, an independent denim manufacturer. Numerous private label jeans manufacturers were said to be angling for the business.
Cactus Apparel is manufacturing a girls’ line of Canyon River Blues jeans and is completing plans for women’s and junior jeans under the same label, said Christopher Greene, director of design.
The women’s jeans are slated to be a five-pocket style in average, tall and petite fits, sewn from 13.75-oz. denim.
Retailing for $20 to $25, colors will include blue, natural, black, black overdyed on blue and aqua.
Cactus Apparel expects to ship 800,000 units of women’s, juniors and girls jeans for Canyon River Blues over the next three months. The girls line is due to ship within a month. It will sell for $15 to $20 a pair.
Cactus has been supplying Sears with its own Cactus denim line since the firm opened three years ago, Greene noted.
“They will continue with the Cactus label because we always have new things to offer, and it’s a testing ground,” Greene explained. “They try styles under the Cactus label, and if it’s a hot item it could possibly be adopted for the Canyon River Blues program.”
Salant Corp. reportedly has been signed to produce the men’s and boys’ denim bottoms and knit tops.
Canyon River Blues will debut in all the Sears stores in September. The volume of the Salant product alone is expected to reach $100 million at retail in the first year.
Said one industry source, “It’s Sears’ move towards J.C. Penney’s Arizona line.” He added that the Salant line will be shipping in May or June.
Salant did not return phone calls seeking comment. In response to a question about Sears chasing Arizona’s success, Thomas D. Hutchens, Penney’s president of worldwide merchandising, said, “Martinez has said he’d like to go after it,” referring to Sears Merchandise Group chairman Arthur C. Martinez.
Martinez told WWD in October 1994 that he would be happy if the new Sears denim private label performed as well as Penney’s Arizona. Penney’s five-year-old line is doing more than $500 million annually, and the company plans continued aggressive growth, Hutchens said.
A spokeswoman for Sears declined to comment on the line, except to confirm that it will hit stores in September. It will be the latest private label offering by the $54 billion, 800-store moderate chain. Sears’ cosmetics will be out in October. Updated offerings under the Fieldmaster label, including chambray shirts and cargo shorts, are already in stores and have been well-received, a spokeswoman said.
Private label has begun to haunt many branded manufacturers, particularly in an age when fickle consumers are placing a higher premium on price and value. Store loyalty and, in many cases, brand allegiance have suffered as a result.
In a recent research report, analyst Gary Balter of Donaldson, Lufkin & Jenrette, noted that department stores once used private label products to enhance margins; now they use private label to provide value to consumers. DLJ estimates that department store private brands are priced 20 to 30 percent below their branded and specialty store counterparts.
DLJ compared J.C. Penney’s price on private label with that of its competitors and noted that Penney undercuts branded as well as specialty store rivals, including Gap and Eddie Bauer.
According to NPD Group Inc., private label now accounts for 25.6 percent of the total denim market, up from 14.9 percent five years ago.
In addition to enhancing consumer perception of the store as offering value, private label can be a profitable venture, said DLJ, estimating that department stores maintain margins in private label in the mid-40 percent range, 5 to 10 points higher than branded products. This edge undercuts specialty stores, forcing them to compete mainly on fashion rather than a combination of fashion and price.

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