LURING TEENS WITH ANCHOR BLUE

Byline: Kristin Young

LOS ANGELES — Who ever said a tiger doesn’t change its stripes was not referring to Miller’s Outpost.
The denim-centric Western chain, once a favorite stomping ground of baby boomers, has quietly changed its name to Anchor Blue in an effort to become a force in the teen market. The 250-unit retailer has nearly completed its transformation, a process that began in March 2000 with the first Anchor Blue store in Montclair, Calif. About 30 percent of stores are left to be converted.
The changeover reflects an effort to connect with the massive spending power of the stripling generation — shelling out some $200 billion a year — and a way to build its store brand. Anchor Blue Kids, a new tween concept, has also bowed and is being tested in six locations.
Howard Gross, president of the privately held, Ontario, Calif.-based company, declined to be interviewed for this story. But vendors and industry watchers said the chain is holding up well in a tough retail market and plays a clean game.
A former Miller’s Outpost executive said the company had a “very, very healthy” performance through the end of the Nineties and up until last year.
“I wish all my accounts were that easy,” said Lisa Engelman, director of sales at Paris Blues, one of its denim vendors.
Jeffrey Ferreira, sales manager at Mudd, another of the retailer’s denim lines, said, “They pay on time; their credit is perfect. I look forward to having an appointment with them.”
Mirroring what Gap did in the Eighties, the decision to reinforce its private label brand was primarily a result of a shift in sales away from Levi Strauss & Co., once the retailer’s largest vendor, to its own line, said insiders. Now, only a small selection of Levi’s fills back-wall shelves and could be phased out altogether. There are several Anchor Blue doors without a Levi’s presentation.
“Private label is what drives the business, and that’s where they make their money,” said the former Miller’s executive. “But if you had asked the founder, Dave Miller, in the mid-Eighties if that would ever happen, they would have bet…that would never, ever happen.”
Meanwhile, the retailer has stocked stores with labels such as Paris Blues, Union Bay, Mudd, LEI, Quiksilver and Dickies Girl. These established brands lure the consumer into stores and the less-expensive, but equally trend-conscious Anchor Blue label steps in to make the sale, according to watchers. Anchor Blue jeans sell in the store for $28 to $32, compared to Levi’s price tag of $50 to $70. The mix is currently estimated at 75 percent Anchor Blue, 25 percent brands.
“By not staying relevant, Levi’s has been reliant on the decisions retailers make,” said Sharon Lee, co-president of Hollywood, Calif.-based youth market research firm Look-Look Inc. “In their private label, Anchor Blue mimics the emotional value of a name brand at a price point that is easily digestible, especially for young people.”
The Anchor Blue brand is tied with Structure as the 11th most recognizable brands among teens, according to Look-Look research.
“I think they’re right-on,” stated Ingrid Martin, vice president of sales for Los Angles-based Dickies Girl, who has worked with Anchor Blue buyers since the line’s inception two years ago. “They’re mainstream, but still offer some of that edgy look in bits and pieces. To me, Anchor Blue is very much America.”
The all-American look with a fashion edge is striking a chord with customers. Stores, sometimes 10,000-square-feet in size, are large enough to showcase the product in a cohesive way. The stores are clean, neatly merchandised and free of gimmicks.
“It’s comfortable and cool at the same time,” said Stephanie Heinz, a clean-cut 16-year-old who shops Anchor Blue and buys Dickies Girl at the store.
But from a corporate standpoint, Anchor Blue is much more than all-American. The company is part of American Retail Group, an Atlanta-based U.S. arm of a Dutch family-owned firm that operates Maurice’s in Minnesota, Eastern Mountain Sports in New Hampshire and Hub Distributing Inc. Hub, of which Anchor Blue is a part, runs Levi’s by Most stores, as well as 22-unit junior chain Juxtapose.
All Hub doors are west of the Mississippi, but several sources said Anchor Blue is gearing up to add stores on the East Coast.

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