PUMPING UP THE ESCADA BRAND
Byline: Katherine Weisman
PARIS — The Escada Group is embarking on a new generation of growth via accessories.
The fashion house, based in Munich, is gearing up to roll out a new line of accessories through its newest division, Escada Development, which is based here.
According to Beatrice Bongibault, who heads Escada Development and is also the managing director of Escada France and a member of the company’s group creative team, the introduction signifies a major move to generate big business. As reported, Bongibault joined Escada last July after a stint as director of international operations at Valentino.
“We are not just introducing a new line of jewelry or handbags,” Bongibault said. “This is a concept for a new generation of stand-alone products. It’s an entirely new Escada universe.”
In an interview at the offices here of Escada France, Escada Group chairman Wolfgang Ley pointed out that the firm has not yet explored its full potential in accessories. “We are one of the world’s single-biggest fashion brands,” Ley said. “But [sales of] accessories and perfumes are very small in comparison.”
In the fiscal year ended Oct. 31, 1993, wholesale volume for the Escada Margaretha Ley fashion collection was about $330.2 million (500 million marks) at current exchange, while accessories, excluding shoes, under the Escada name generated $20.5 million (31 million marks) in sales. Sales figures for 1994 have not been disclosed. The decision to develop accessories business came, in part, Ley said, after studying the strategies of other international brands, such as Christian Dior, with its roster of licensed accessories and beauty products. Ley said he realized Escada wasn’t taking enough advantage of its name to generate sales from non-clothing products.
Moreover, a 1992 study undertaken by Germany’s Roland Berger International Management Consultants, which interviewed 273 of Escada’s retailers from five countries, showed that many Escada customers were looking for more products under the Escada brand name and didn’t understand why they couldn’t be found.
As a result, Ley formed Escada Development to produce such new lines of Escada-branded goods without overtaxing the fashion design teams. Escada Beaute, the firm’s Paris-based beauty division, was formed in 1991 for the same reasons.
Escada Development’s first collection for fall 1995, to be shown to retailers next month, consists of leather accessories, shoes, silk products, fashion jewelry and a new men’s silk tie collection. Bongibault said she foresees adding products such as swimwear, eyewear, watches, lingerie and even tableware in the future. In the meanwhile, the accessories that Escada already produces to work with the Escada Margaretha Ley collection will continue to be produced and will not be affected by the launch, Bongibault said. First-season wholesale sales for the new collection are projected to be relatively small, in the $11 million to $15 million range, according to Ley. The accessories are expected to start turning a profit in 1997, he added.
Retail prices are geared to position the line in the same range as other designer accessories lines. Clip earrings, for example, are priced between $70 and $100, leather tote bags range from $400 to $600, scarves range from $140 to $160. Significantly, the price range is much broader at both the high and the low end than for existing Escada accessories.
In terms of production, Bongibault wants to subcontract and control as much of the production of the new products as possible.
License or joint-venture agreements will be reserved for products like eyewear or lingerie, whose technical fabrication and distribution network are different from other fashion products, she explained. Bongibault has constructed the Escada Development collections like Escada’s apparel, offering midseason shipments of new goods. The four seasons are fall-winter, holiday, spring-summer and Mother’s Day. Within those seasons, several themes will be delivered, almost on a monthly basis.
A Paris flagship store for the collection will open on Avenue de la Paix in July. Otherwise, distribution for the new line is aimed toward freestanding Escada stores, either wholly owned or franchised, which are large enough to accommodate a special corner; department and specialty stores, with the goal of having shop-in-shops, corners or smaller counters featuring several complete product lines rather than the whole range, and duty-free stores, which will be a departure for the Escada group. Shoes and leather goods will likely have additional distribution through upscale shoe stores and leather goods boutiques. The luxury shopping galleries in the large, upscale hotels throughout Asia are also a possibility. Bongibault is currently negotiating with stores like Saks Fifth Avenue, Neiman Marcus, Harrods and Galeries Lafayette to open in-store shops next August. For the first season in the U.S., Bongibault hopes to have 40 doors for Escada Development, including the 12 wholly owned Escada boutiques. A U.S. subsidiary, Escada Development Inc., is about to be formed and will be directed by the president of Escada USA, Ron Frasch. His team for this unit, however, will be new, separate from Escada’s fashion business.
Distribution for other markets has not been finalized, she said.
The line will have its own bright white packaging and feature a daisy motif. The white paper bags and boxes for the collection have a white-on-white daisy relief print, featuring the Escada logo in black, overlapping a daisy. Daisy in French is marguerite, and the flower was chosen as a tribute to the late Margaretha Ley, the head designer for Escada and wife of Wolfgang Ley, who died in 1992.
The daisy theme is seen throughout the first collection and will continue through future seasons. Some of the fashion jewelry uses a daisy chain design. Buckles and other metal ornamentation on shoes and bags bear the motif as well. In the huge silk scarf and shawl collection from Ratti, there is a series with a huge daisy printed as a photograph on a solid background.