GEORGE FORGES AHEAD

Byline: Samantha Conti

LONDON — When George Davies launched his George clothing line at Asda supermarkets 12 years ago, industry analysts were skeptical. Why was one of the stars of British fashion retailing playing around with a low-end food retailer like Asda?
Boy were they wrong.
The George line of women’s, men’s and children’s apparel and accessories has become the U.K.’s third-largest apparel brand and its best-selling children’s wear label. It has revolutionized apparel retailing in the U.K. with its low-priced fashion and has forced other food retailers like Tesco PLC and J. Sainsbury PLC to copy Asda and launch their own clothing lines, with varying degrees of success. It also was one of the reasons Wal-Mart bought Asda in 1999 for $10.7 billion.
And George, which has been under the creative direction of Kate Bostock since Davies left in 2000 (last year launching a line exclusively for Marks & Spencer PLC), continues its momentum, reporting double-digit sales growth and generating expected sales this year of $1.5 billion, about 8 percent of all Asda sales.
George is now such a powerhouse that it no longer looks at other supermarket brands as its competition. Instead, it is going up against big fashion retail chains like Zara, Hennes & Mauritz, Top Shop and Next.
Later this month, George will take those chains head-on when it unveils its first fast-fashion component, inspired by trends seen on the catwalk, on celebrities and film screens. Retail prices for the 36-piece capsule collection, known simply as fast fashion, range from $18 for a paisley-print gypsy top to $36 for a denim blazer, and are on the higher end of the George price offering. The collection has a seven-week lead time — compared with George’s average of 12-14 weeks — and will be rotated in and out of stores every four weeks.
According to Andy Bond, managing director of the George at Asda brand, the grand plan for George is simple: Attract as many customers as possible. “There are 11 million people who come to Asda each week for their supermarket shopping, and we want them buying George,” said Bond in an exclusive interview with WWD. The George line sells at 222 out of 251 Asda stores. More importantly, it is gradually being rolled out to Wal-Mart stores in the U.S. and Germany.
Bond and his team are off to a solid start: Last year, they managed to boost the percentage of Asda food shoppers who buy George to 20 percent from 13 percent, and their goal for this year is to raise that figure to 30 percent. The strategy is straightforward. “We’re going to continue to focus on what we’ve always focused on: value, quality and fashion.”
Bond also is taking full advantage of Asda’s parent, Wal-Mart International. Thanks to Wal-Mart’s large supply base, in January George was able to slash the prices of its Essentials range — which accounts for 30 percent of all George clothing sales — by 10 percent. The result? A pair of women’s jeans, which once cost $13.50 are now $12 and a head-to-toe outfit, including George underwear, can cost as little as $54.
(All dollar figures are translated at current exchange rates.)
“In the days before Wal-Mart, we used to buy bonded fleece at $9 per yard. Today, we can do it for $3 a yard, and when we save a pound, we invest a pound in our customers,” said Bond. “Our ongoing goal is to continue to drive down prices.”
Bond is particularly proud of the fact that when George introduced a larger range of women’s sizes last year — from U.K. sizes 18-24 — the company did not increase the prices of those new sizes, a relatively common practice. Plus-size sales now account for nearly 10 percent of George’s women’s wear sales.
A big supply base isn’t the only advantage of belonging to Wal-Mart. In March, George introduced the Mary-Kate and Ashley brand for young girls — a brand that’s been a hit with Wal-Mart customers in the U.S. and Canada. In the U.K., the line is a joint venture between Mary-Kate and Ashley Olsen and Asda and is marketed as a seamless part of the George collection.
While Bond would not break out separate sales projections for Mary-Kate and Ashley or the new, fast-fashion collection, he said they would be “primary planks” in this year’s growth strategy. He also said this year’s growth pattern should mimic last year’s. In 2001, there was double-digit sales growth, with a 30 percent rise in sales during the run-up to Christmas.
Both Bond and Bostock said a major part of the strategy at George was working with customers — that means commissioning focus groups, inviting customers to test drive parts of the collection before they launch and responding to mail.
“We’re talking to them on a weekly basis and trying to get them involved as much as possible,” Bond said, adding that George’s fans range from the luxury customer to the mass market one. “We’re also walking the floor, and keeping our ears open to our own colleagues. There are over 100,000 people working at Asda and most of them are George customers.”
Richard Fitzpatrick, the head of Retailmap, a U.K.-based retail research and consulting firm, said George has always valued its customers’ opinions — and vice versa. “They’ve always been about delivering contemporary fashion — nothing outrageous — to real women with kids. And I think, too, that customers are still loyal to George Davies. They knew they could trust him and while he may have moved on, he still has a strong resonance with the customer.”
George’s new design director Bostock said the fast-fashion concept was launched because customers were crying out for more fashion, but didn’t want to pay a high price for it. They can, however, be pushed: During the pre-Christmas season, George launched a capsule collection of cashmere sweaters that sold for $75, and they sold out in four weeks.
Bostock works with a staff of about 35, including a fabric technologist she recruited in order to improve quality standards. The staff travels constantly, pores over fashion magazines and clicks onto Worth Global Style Network each morning for the latest looks.
About 50 percent of the George collection is made in Europe and North Africa, with the remainder produced in the Far East and Sri Lanka. The fabric sourcing and manufacturing are often vertically integrated.
Retailmap’s Fitzpatrick said George has great opportunities to grow in the medium term. “It can move into maternity, swimwear, accessories and of course the whole home furnishings segment,” he said in a telephone interview. “Asda already has low-priced items for the home, but George could come up with a more aspirational, branded collection, for example.”
The only danger he foresees is of George mimicking too many of Wal-Mart’s strategies.
“The key to George’s continued success is not to follow the in-store visual merchandising that Wal-Mart has in the U.S. It’s confusing and not particularly appealing. Right now, George has well-thought-out departments, color and product stories and good in-store visual merchandising. George also has to avoid bringing in other branded products — like Wal-Mart does with Nike and Reebok — that would dilute the George brand,” Fitzpatrick said.

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