WARNACO’S NEW STAR: VAN RAALTE

Byline: Karyn Monget

NEW YORK — Continuing to eye the mass market’s appetite for brands, Linda J. Wachner is adding another name to The Warnaco Group’s lineup — the venerable Van Raalte label — and is putting together, at least initially, “a special deal” with Sears, Roebuck & Co.
“We have agreed to purchase all rights to the trademark,” said Wachner, Warnaco’s president, chairman and chief executive officer. “We are buying it because it’s an excellent brand name and has high recognition.”
The Van Raalte name is being sold by Cluett, Peabody & Co., a subsidiary of Bidermann Industries Corp. Wachner said she expected the deal to be closed Friday.
Purchase price was not disclosed.
Warnaco will put together first a line of innerwear carrying the label, with distribution aimed at more than 600 Sears stores starting in late 1995, said Wachner.
Wholesale sales the first full year are projected at $25 million, she said.
“It’s a special deal we’re doing with Sears,” continued Wachner, noting that a line of daywear, bras and panties and sleepwear by Van Raalte will be shipped to Sears for fourth-quarter selling next year.
The Van Raalte name was established around the turn of the century, and had been a top department store brand in daywear, sleepwear and foundations. The innerwear line was discontinued some 15 years ago. There also had been a line of Van Raalte hosiery, which was produced by Kellwood Co. and was phased out in 1977. A licensed line of gloves bearing the Van Raalte label was in circulation until a year ago, when the license expired, said the Bidermann spokesman.
“At some point,” Wachner said, “we are looking to expand to other lines of business for mass distribution.” She pointed out that the purchase would include the trademark for men’s and women’s apparel, accessories and hosiery. She would not say, however, whether the label would be exclusively for Sears.
Contacted about the deal last week, a spokeswoman at the Sears flagship in Chicago would say only, “We do not discuss brands we are not currently carrying.”
This strategy — buying well-known brands that have been out of circulation or are having problems, or extending a brand name on other products for discount chains — is one way apparel firms are growing their businesses as department stores continue to consolidate.
The Van Raalte brand adds another layer in Warnaco’s strategy to expand presence in various distribution channels and build revenues.
Three years ago, Warnaco introduced a line of bras under the licensed Fruit of the Loom label for distribution to such chains as Kmart and Wal-Mart. According to Wachner, the FTL brand of underwire and soft-cup bras had grown to a 6 percent share at the mass level at mid-1994.
In late 1993, the company signed a three-year distribution agreement with Avon Products Inc. to distribute the Warner’s and Fruit of the Loom branded bras in Avon Style brochures.
Some 20 million copies are mailed five times a year to Avon’s 415,000 sales representatives in the U.S.
Warnaco also has been producing a moderate-price sports bra under the White Stag label for the past year.
White Stag is an established skiwear and sportswear name, and Authentic Fitness Corp., another company headed by Wachner, repositioned the sportswear line for the mass market in 1992.
Warnaco is not the only top innerwear firm tapping into the mass market. In 1990, Vanity Fair Mills, a unit of VF Corp., repositioned the Vassarette brand acquired from Munsingwear for Wal-Mart and Hills Department Stores. First-year retail sales at Wal-Mart alone were $100 million, and Vanity Fair claims only continued success for the label.
Maidenform is getting into the brand act for mass chains. For spring selling, Maidenform introduced a line of bras called “Self Expressions…a division of the Maidenform Worldwide Inc. family of companies,” and is aiming it at discounters.
But while the general trend may be to grab a bigger share of the mass market, Wachner also is focusing on designer names.
In March, she closed a deal to purchase the Calvin Klein men’s underwear business, and acquired the international trademark for men’s accessories by Calvin Klein. The deal also includes the worldwide license for women’s innerwear by Calvin Klein, starting next year.
The deal, as noted, was worth $64 million, plus ongoing fees, and cost five times cash flow.
The Calvin Klein underwear businesses — men’s and women’s — are part of Warnaco’s aggressive plan to grow its international presence, and are expected to generate worldwide sales of $300 million in five years.
At Authentic Fitness, Wachner is concentrating on several programs in swimwear and activewear, including the fast buildup of the Speedo specialty chain.
The first of these opened in late 1992. So far, there are 43 Speedo units in the U.S., and seven more are slated to open by the end of fiscal 1995. By then, Wachner projects retail sales of between $80 million and $100 million.

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