Byline: Mark Tosh

NEW YORK — One month after its nationwide rollout, the Kathie Lee Collection has become an apparent hit at Wal-Mart Stores, exceeding the expectations of store officials and of TV star Kathie Lee Gifford.
“They wanted to do an initial [wholesale] volume of $150 million this year,” Gifford told WWD the other day.
After only a month of selling, according to Gifford, projections for the private label career line are being raised.
“It seems pretty amazing; those kinds of numbers I’m not even used to,” said Gifford, whose previous line, Kathie Lee for Plaza South — a department store line since discontinued — rolled up a wholesale volume of $50 million.
Wal-Mart’s markups are traditionally among the lowest in the industry. Based on that, industry observers estimated that the Kathie Lee line would do around $250 million in retail sales its first year. It is being sold in all of the chain’s 2,150 stores.
At this pace, the collection will overtake Kmart Corp.’s private label Jaclyn Smith line, which reportedly has a retail volume of $150 million.
The Smith line made its debut in August 1985, and Kmart has estimated that more than 30 million women have each purchased at least one item from the collection.
The Kathie Lee Collection, which began with sportswear and dresses in misses’ and plus sizes, bowed at 17 Wal-Mart stores in mid-January and was rolled out chainwide early last month.
By mid-February, handbags had been added and now, jewelry, intimate apparel, sneakers and shoes are being considered, Gifford said.
The success of the Kathie Lee Collection has been achieved with little advertising by Wal-Mart, the world’s largest retailer. The biggest push so far will be with the first sales circular this month.
Gifford also plugs the collection on her morning TV show, “Live With Regis & Kathie Lee,” which has eight million viewers. In addition to the Kathie Lee Collection, Wal-Mart will “hit the floor” with a line of Catalina casual and active sportswear for men and women within the next two weeks, as part of its strategy to use brand names to build apparel sales, according to John Lupo, the chain’s senior vice president and general merchandise manager.
Catalina swimwear is already in many Wal-Mart stores, he said, adding that Catalina is expected to be the chain’s main label in sportswear and activewear.
Lupo said the plan is to gear the Kathie Lee label for the career customer, who has been a tough sell for Wal-Mart.
“We intend to keep it within the confines of career dressing,” he said. “We’re not going to do a swimwear line, for example. We’re not going to let it go beyond the scope it is now.” Lupo said he expected the collection eventually would comprise other categories, but nothing is definite yet.
He said Wal-Mart already considers the Kathie Lee Collection “a big success,” but declined to disclose sales figures.
To kick off the collection for its 2,100 store managers, Wal-Mart invited Gifford to a January sales meeting in Birmingham, Ala. Wearing a popular 33-inch swing skirt from the collection, she sang the national anthem to open the meeting and then did a takeoff of her TV show with William DuBose, a Wal-Mart vice president and divisional merchandise manager for women’s wear.
At the stores, the Kathie Lee Collection is integrated into Wal-Mart’s assortment using a shop-within-a-shop layout and the coordinated items are grouped together. Signboards featuring Gifford’s picture top the racks in both the plus size and career areas.
The spring collection includes rayon dresses, $24.96; plus size dresses, $29.94; coordinated skirts and tops, $14.96 and $16.96, respectively; polyester and rayon blend blazers, $21.96; polyester tops, $8.96, and cotton blend tops, $12.96.
For fall, Gifford said the line will include a lined, wool-blend blazer in the $35 range.
Wal-Mart also is planning to launch the private label collection at its 123 Canadian stores for fall, according to Bob Adler, president of Halmode, a division of Kellwood Co. Halmode holds the master license for the Kathie Lee Collection, which allows it to sub-license manufacturing rights for line extensions to other producers.
“The initial checkouts are astonishing to even me, and I have been in the business 35 years,” Adler said. “The store in Middle Island [on Long Island] has had 20 to 40 percent sell-through in some products.”
Adler said it’s still early to make projections for 1995, but at the current sales rate it’s “fair to project we’ll exceed” the estimated $150 million wholesale volume target.
“Wal-Mart, despite its incredible sales growth, is a fairly conservative company,” Adler said. “They want to roll out the licenses one at a time and let one lead into the next.”
Gifford estimated that the handbags, priced from $6.96 to $19.96, sold about 30 percent of the initial $5 million wholesale order over the President’s Day weekend.
“They’re just unbelievable handbags at an unbelievable price,” she said. “The next thing we’re going to be doing is jewelry and intimate apparel.”
Halmode was the company that manufactured the Kathie Lee for Plaza South department store line. With that line, Gifford said she was “very involved with every single design, every button and every fabric.”
With the new collection, however, she said Wal-Mart’s understanding of its customer base and new technology allow her to step back and look at the line through story boards and fabric samples. “I really said to them, ‘This is my taste. This is what I like and this is what I think is terrific. But you know your market and the point here is to make products that your market is going to want.’
“They still pass everything by me,” she added. “But in some ways I have checked my ego at the door in terms of my own personal preference because there is a variety of people in the world and I want to give them a product they will be proud to wear.”
One of the factors that Gifford said led her to Wal-Mart is her efforts for charity, especially the Association to Benefit Children.
Gifford will contribute a portion of her royalties for the collection to the association, which runs Cody House in New York, a care facility for children born with crack addictions or HIV infections. The organization is helping to build a second New York facility, Cassidy’s Place, that it hopes to open in September to care for 150 children.
“I knew that [raising the money required for this work] would not be possible unless I went mass market,” Gifford said, explaining her affiliation with Wal-Mart. “Wal-Mart has always had an image that I respect and that I can relate to. Also, they have the same concerns. They have given millions of dollars to Children’s Miracle Network and I knew they would be an invaluable partner.”