Byline: Michael Marlow

LOS ANGELES — Vintage clothing is nothing new. Producing it for department and specialty stores, however, is. That is what a group here is doing for the junior market with the launch of American Rag Diffusion.
The concept actually began four years ago, when Margot and Mark Werts, owners of the hip La Brea Avenue store American Rag CIE., began modifying many of the vintage pieces sold in the store. In the beginning, the idea was as much business necessity as creative genius.
“It grew out of a real need,” said Mark Werts, who designs the line with his wife, Margot. “We had things that were great, but were too big or too small. Blazers were too long, so we cut them into spencer jackets.”
The peculiar hybrid of new and old caught on. American Rag created a new product category, which it sold in addition to its eclectic mix of vintage, new denim, such as Diesel, and new young designer labels, such as Anna Sui and Double RL.
American Rag began wholesaling the line three years ago, selling a remade vintage line to stores in Japan. American Rag Diffusion, launching for fall 1995, is the store’s first wholesale venture in the U.S.
“I’ve watched a million people start businesses from the top down, but this is coming from the street up,” said Patricia Warren, president of American Rag Diffusion and a 20-year retail veteran. “The kids are already doing this. It’s a great new entree instead of everybody’s same-old, same-old.”
Wholesale prices for American Rag Diffusion range from $9.50 for a recut cropped T-shirt to $29.50 for a ballroom miniskirt or denim jeans. The average cost of a remade vintage item is $15. Signature silhouettes include recut, tight cropped tops for $9.50 to $15 and psychedelic print Lycra spandex sleeveless sheath dresses for $24.50.
A new denim collection will be offered under the American Rag Diffusion label, with an average wholesale price of $26. Skinny five-pocket denim jeans or straight-leg, relaxed five-pocket denim jeans are $29.
Margot Werts pointed out that vintage today is a long way from the rounders of flannel shirts that cluttered old second-hand stores. Young people have taken vintage for their own, she said, but it must be reconstructed into contemporary styles.
“Basically, we look at what is available in the vintage market and create new items,” Margot Werts continued. “You cannot always do what you would like to do. You have to be more flexible in a sense. You have to work with what you’ve got, but it also makes it unique because there are no two alike.”
Robert Margolis, the former chairman of the Cherokee Group, is offering production, manufacturing and management help for the line through his new firm, the Wilstar Group, which is a partner in American Rag Diffusion. He said the company has found a niche, which he believes is the only way a wholesaler can succeed. “American Rag Diffusion is not something the retailers can do on their own. It is an art form doing reconstructed clothing. It has a high-end cachet.”
Reconstructed denim may be an art form, but the company is treating it like big business. With the line on computerized retail quick-response systems, officials will be able to track sales and jump on the hottest bodies, and according to Warren, retail requests and reorders will be filled as quickly as with other new lines.
“We’re not going about this in a froufrou manner,” she said.