HALMODE CONFIRMS DEAL FOR A WAL-MART LABEL
Byline: Arthur Friedman
NEW YORK — Halmode Apparel division of Kellwood Co. is completing a deal to hold the master license for a Kathie Lee Collection for Wal-Mart Stores, a label with blockbuster potential.
This confirms a report carried in these columns on page 10, Sept. 2.
Halmode has hired a 39-year-old fashion model, Donna Sexton, to be the spokeswoman for Plaza South, succeeding talk-show host Kathie Lee Gifford.
Bob Adler, president of Halmode, which was purchased by Kellwood in September, said the Kathie Lee Collection will be a private label product for Wal-Mart and will include sportswear, dresses and accessories. The budget dress division of Halmode — MHM/Sunshine Starshine — will make the dress segment of the line.
The Kathie Lee Collection will reportedly be sold at all Wal-Mart stores. There are currently 2,225 Wal-Marts in the U.S. and Canada, generating a projected $83 billion in sales this year. Adler said the Kathie Lee line should at least have the potential of Jaclyn Smith’s collection, which is sold at Kmart’s 2,350 stores.
The Jaclyn Smith line will hit $150 million in sales this year.
“It’s taken Kmart time to reach that volume, but if done correctly, the Kathie Lee Collection has potential to do hundreds of millions of dollars,” Adler said. “You’re connecting the largest store chain with one of the country’s most recognized celebrities. Now the product has to be developed and produced correctly.”
For the past three years, Gifford was the celebrity spokeswoman for Halmode’s Kathie Lee for Plaza South dress collection, which reached about $50 million in volume this year.
However, as the three-year licensing agreement was facing an end-of-the-year expiration, Adler said Gifford indicated she wanted to take the line to the mass market, where she had success this year with her “Feel Fit & Fabulous Workout” video, sold at Wal-Mart stores across the country.
“She had also heard from many of her customers and fans that the dress collection was generally too high-priced for them,” Adler said in an interview at Halmode’s offices here at 501 Seventh Ave.
Neither Gifford nor Wal-Mart officials could be reached for comment.
“Plaza South has been experiencing terrific growth, and Kathie Lee as a spokeswoman helped gain recognition for the label,” Adler said. “We learned through this experience, our first with a celebrity spokeswoman, that despite the hype and name recognition, the good dresses sold and the bad dresses didn’t sell.”
Adler said his company also learned “the power of marketing and advertising,” and the importance of proper positioning and display in the stores.
“We also realized we had a responsibility to the department stores and specialty stores who had been buying the Plaza South line to continue to market it in a sophisticated and proper manner,” Adler said. “Our demographic studies show that 70 percent of the sales were coming from women 35 to 55, and that 65 percent of women over 20 are in the work force.”
The spring ad campaign tags Sexton, the mother of triplets, as “The New Plaza South Woman.” However, unlike Gifford, Sexton’s name will not appear on the label. Sexton is known for her appearance in Maybelline ads for “women that don’t look over 35” and previous ad campaigns for Coppertone, Silkience and Frances Denney. She will appear in print and broadcast ads and point-of-sale videos for Plaza South and will make in-store appearances at sales seminars and fashion shows.
The ads, with their working-mother theme, will blitz key markets such as Atlanta, Charlotte and Dallas starting in February, with a retail rollout in March at stores such as Belk’s, Profitts, Rich’s and McCrae’s. Adler said his ad budget is more than $1 million for spring, and he expects to have similar budgets for following seasons.
In a preview of a rough cut of one TV commercial, Sexton talks about “the ease of wearing dresses.”
“To say the least, I’m very excited about the opportunity,” Sexton said Friday in a phone interview. “Not only will I be identified as the Plaza South woman, but I’ll be able to help express to the stores what we are trying to do with the product, which is to make high-quality, affordable dresses for mature career women.”
Adler notes that it’s unusual for a moderate label to run a high-profile ad campaign, but adds, “The name of the game is getting people into the stores and creating excitement around your product.”
“We feel there is an opportunity to build Plaza South into a major brand,” said Adler, who bought the Plaza South label from Genesco 30 years ago, shortly after he formed Halmode. “There is a void in the moderate dress market, and overall, all signs point to a great dress in 1995.”
Although he originally thought Plaza South might have a 10 to 15 percent drop in sales when Gifford was no longer associated with it, stores’ enthusiasm about the ad campaign has changed that to projections of a 10 to 15 percent increase. Halmode will have a volume of about $160 million this year and expects sales of about $175 million next year, Adler said.