MINDING THEIR OWN STORES
Byline: JANET OZZARD and ALICE WELSH
NEW YORK — As more sportswear makers open their own stores, they see the trend not as a conflict with their retail accounts but a way to enhance that business.
They say it also gives them an opportunity to test new ideas, cultivate brand loyalty and generate immediate feedback from consumers.
Although some companies admit they went into retailing because they were unhappy with the way department stores were handling their lines, most of them prefer to talk about the strong brand image and merchandising ideas that can be presented in their own stores. They claim this can develop into a synergy between them and their retail accounts.
Manufacturers sometimes choose a discreet location that won’t tread on the toes of the retailers with whom they do their wholesale business; but even if they open in a shopping district, such as Madison Avenue, they say their store stimulates business for the brand no matter where it’s sold.
Calvin Klein, for example, is scheduled to open a New York flagship store at Madison Avenue and 60th Street next spring. It will house the women’s and men’s collections, as well as the new home furnishings line. News of its opening spurred speculation that Barneys New York, which carries Calvin Klein and whose new store is on the same block, was unhappy about the move. Barneys executives denied it.
Some manufacturers say they don’t believe there is a competition for customers. Ron Frasch, president of Escada USA, said there is enough business for both the brand specialty stores and the department stores. Escada operates 12 stores domestically, plus some franchises in the U.S. and Mexico.
“There’s one customer that shops the [Escada] stores and one that shops the department stores, and I believe there’s enough of a separation most of the time to support both sides of the business,” Frasch said.
He added that there have been problems in the past between Escada and its retail accounts, “especially when we’ve gone after their best-selling associates.”
“That was silly,” he noted. “We’ve corrected that. If our approach is to have our stores win at the expense of our wholesale accounts, we lose. If our approach is to have the stores support the wholesale account, we win. We’re very sensitive to it.”
The idea that its own retail store can support its wholesale business by establishing a merchandising look is strong at Tahari as well, according to Tom Murry, the bridge company’s president.
Tahari has two stores in Manhattan, Murry said. In the fall, it will start looking for a larger, “more interesting” space for its 800-square-foot Madison Avenue store near 67th Street, he said. The second store is in the World Financial Center.
Murry said that even though the Madison Avenue store could be competition for Tahari’s department store accounts, it hasn’t worked out that way.
“The Madison Avenue store is a strong showcase of product, and it actually brings people along,” he said. “When we first opened the stores about seven years ago, we didn’t have any in-store shops. The store helped us show our retail accounts how the line could look.”
Tahari now has an in-store shop in Bloomingdale’s, and has its own merchandising concept at Saks Fifth Avenue and Lord & Taylor.
In addition to playing up the line domestically, Murry said that the tourist traffic along Madison has sometimes included visiting retailers from abroad. As a result, his international business has expanded.
“People come over here and shop the stores on Madison Avenue, and then they come in [to the showroom] and say they want the line for their stores,” he said. “We’ve gotten business from the U.K., Germany, Spain, Italy that way.”
A company doesn’t necessarily have to be as established as Tahari to try to build its brand image. Yair Levy, president and designer of the sportswear line YL, opened a 1,000-square-foot store on Columbus Avenue and 74th Street two months ago.
Levy’s two-year-old line lacks the name recognition of older, more established brands such as Escada, Tahari or Kenar. But Levy felt he could build a customer base from the store.
“I can have my own viewpoint,” he said, although he pointed out that he is not unhappy with the way his line is merchandised in department stores such as Bloomingdale’s, Macy’s East and Saks Fifth Avenue. But because Levy opened the store in an area that does not directly compete with them, he said, he’s not taking away from department store traffic.
“I also keep my prices at the full price point,” Levy said.
Eileen Fisher, a contemporary sportswear firm with seven freestanding stores, will increase its retail presence this September, opening a second store in Boston. Currently, the company operates four stores in New York and one each on Sanibel Island, Fla., in Boston, and its newest unit, a one-month-old store in East Hampton, N.Y.
According to Anne Kasper, executive vice president of Eileen Fisher, retail sales account for 20 to 22 percent of annual volume. In 1993, the company did about $25 million in total sales.
“In the works are stores in other locations in New York and New Jersey, as well as a store in Chicago,” said Eileen Fisher, the owner as well as the designer. “I want to get the infrastructure into place before rolling the stores out nationally.”
Eventually, she said, there could be 100 stores nationwide.
Fisher’s motivation for opening her first store on Madison Avenue was to set “the right environment” for the clothes.
“I wasn’t happy with the way they were being presented in other stores,” she said. “The clothes are so simple that they got lost near other clothes.”
Fisher says her own stores have not created any problems with retailers that carry the line.
“Before we open a store, we let them know we’re coming. Once we’ve actually opened the store, it only helps everyone. We can merchandise the line in so many ways, we can always make it look different,” explained Fisher.
Kenar, another contemporary sportswear player in the retail business, opened its first full-price store four years ago on Columbus Avenue near 73rd Street.
“We started learning retail when we opened the Columbus Avenue store, but the experience with our East Hampton store has been invaluable,” said Ken Zimmerman, president and chief executive officer.
Kenar got into retail “as a marketing and sales tool,” he said.
“I’ve discovered that the retail stores actually help us do more department and specialty store business. The stores learn what we are about when they see the whole product.”
He pointed out that Carson Pirie Scott & Co. in Chicago opened an in-store Kenar shop after seeing the Columbus Avenue store.
Michael Axelrod, president of the contemporary sportswear company French Connection, is planning a major retail rollout starting this year and continuing through 1995. Currently, French Connection has three stores in New York, and one each in New Orleans, Philadelphia and Roosevelt Field in Garden City, N.Y.
To implement his expansion, Axelrod has created a team that runs the retail division, including all merchandising. It commences next month with the opening of a store at Sixth Avenue and 51st Street here, followed by a Cherry Hill, N.J., store in September, two Boston locations — in the Copley and Natick malls — in October, and in Ardmore, Pa., a suburb of Philadelphia, at the Suburban Square mall, next March. The company is negotiating for space in Chicago and plans to open there next April.
One of Axelrod’s motivations for expanding retail operations was disappointment with the way French Connection was merchandised at some retailers.
“If people don’t do a good job presenting the line, it does them no good and it does us no good. It’s a waste of time without the proper environment,” he said.
French Connection’s combined retail sales are up 30 percent for the first five months of its fiscal year. Axelrod projects a volume of $30 million for 1994.
Bettina Reidel, a contemporary sportswear designer here, has been in the retail business since 1981, when she opened a store in SoHo.
“The world is much smaller, so what is selling in the New York store is a good indication of what is selling all over the country,” said Reidel.
Reidel has decided to open a store in Los Angeles and has her eye on Sunset Plaza.