ON THE HEELS OF THE BIG THREE
Byline: Julee Greenberg
NEW YORK — Are the Big Three suffering from a case of the blahs?
The strength of the moderate junior denim category, which was reinvented by LEI, Mudd and Paris Blues in the late Nineties, has attracted a field of new competition. Paris Blues is particularly feeling the pinch. Its stumbles during last year’s back-to-school season allowed competitors, including Bongo and Bubblegum, to gain ground in the junior field.
Paris Blues acknowledged that fall woes resulted from casting its denim net too wide, and not offering a clear fashion image in jeans. But while the Los Angeles-based company contends that it has fixed its problems and improved its denim offering, retailers asked about the performance of the brand’s jeans turn the subject to the company’s tops business.
While Paris Blues’ stumbles may be temporary, retailers and vendor executives agreed that an increasing number of brands are taking pieces of the junior pie.
At New York-based Macy’s East, denim is selling so well that merchants plan to add a larger variety of better denim labels like Mavi and Buffalo as well as add floor space for more jeans brands.
“Anywhere we have better denim brands, they perform well for us,” said Christine Munnelly, divisional merchandise manager of juniors at Macy’s East. “Levi’s is really coming back and serving that better junior customer.”
Overall, Munnelly said that LEI, Mudd and Paris Blues all have a strong placement on junior floors, and they do remain the top three with Macy’s. Munnelly said that LEI remains a leader in the jeans business by providing the newest treatments and trends on all products while Mudd seems to be the leader in innovation.
Asked about Paris Blues’ recent jeans performance, she said, “I think that every brand goes through a struggle and this may be their time+But really, their knits look outstanding and I expect them to sell very well.”
Mark McDevitt, vice president, divisional merchandise manager of junior sportswear at J.C. Penney Co., of Plano, Tex., said that the majority of his junior jeans business is done with LEI and Mudd, but there are many denim companies making their way up in the ranks. He listed Angel, Bubblegum, Bongo and Zana-di all as denim companies on the rise.
“LEI is great,” he said. “They are on every trend and they deliver on time with what they promise.”
McDevitt would not comment on Paris Blues’ performance in the denim category, saying only, “their strength for the season is in knit tops.”
At Beall’s Department Stores Inc., based in Bradenton, Fla., divisional vice president Don Niemann, said Bongo is the best performer of the moderate junior jeans brands at his 67-store chain.
“The moderate middle is what’s performing. Our business with Bongo happens to be extremely strong. We’ve always been very strong with them,” he said. Adding that Paris Blues “does well” at his stores, he said his assortment includes most of the major moderate junior jeans brands.
“We’ve found a niche for each of the brands,” he said. “Paris Blues, LEI, Zana-di, Mudd each fill a need for us.”
Steven Strickland, senior vice president of creative marketing at Foothill Ranch, Calif.-based Wet Seal, said that he does not believe there are only three top junior denim brands. Wet Seal carries LEI, Paris Blues and Bongo, but he said it’s the in-house brand, Blue Asphalt, that performs best.
“I really believe that our introduction of Blue Asphalt had an effect on our other denim brands that we carry,” he said.
Retailers and vendors acknowledged that Bongo is climbing the charts and giving the Big Three a run for their money. A spokeswoman at The Bon Ton said her chains top three denim brands are LEI, Mudd and Bongo.
At Paris Blues, Lisa Engelman, president of sales, admitted that business for the 2001 b-t-s season was difficult.
“We hit a few bumps for back-to-school. We just put too much fashion out there,” she said. “But now we are back on track and I really feel good about business.”
Engelman said that the company’s kids and knit top business is retailing well and said that at the moment, Paris Blues is doing better with those categories than it is with denim.
“Our business is not soft right now. We are adding new fabrics to our denim mix and our shorts business is good,” she stressed. “Maybe a month ago this would have been a different story, but I am sure we are still getting one third of the volume in juniors. No one is bumping us out of third place.”
Engelman said she plans to stay ahead of the competition
“There are a lot of companies out there doing denim and I think that is very good for business. It keeps us strong,” she said. “Newness is good since it brings new customers onto the floor.”
Engelman said that she has learned from the mistakes her company made with the b-t-s collection and things are being fixed to make business more efficient. The company plans to keep its fall 2002 looks a little more basic than last year’s, though it will also ship some fashion pieces.
“We are on an upswing,” she said. “If we didn’t go back to basics, I was ready to retire. But business is good. We are on the right track.”
Most retailers said LEI remains the dominant moderate junior denim brand.
“Having an innovative product and being on top of the trend is what comes first,” said Spencer Rosenheck, president of sales and marketing at Los Angeles-based LEI. That is the secret of the brand’s continuing success, but as he stressed, while product comes first, there are other elements that keep the 11-year-old brand on top.
“We have to advertise to our core audience, the 12 to 20-year-old. So we advertise in teen books, on the radio, in-store events and promotions.”
Rosenheck said he knows the competition in this business is growing.
“We compete with everyone in the denim industry. This includes the Gap, Old Navy and Levi’s,” he said. “Bongo is really coming on strong and from what I sense at retail, they are ahead of Paris Blues.”
He’s not the only one who feels this way. Dick Gilbert, president of New York-based Mudd Inc., said he thinks Bongo “looks very, very good for back-to-school.” But he also thinks that companies like Angel and Bubblegum are picking up some heavy steam in the market.
“We all know the competition is out there,” he said. “We just have to focus on what we think is best. We can’t be stupid for five minutes or someone will take our spot at the top.”
Gilbert, who has been in the denim business since the late 1960s, said that he has never seen business as good as it is right now. He now has a larger staff than ever before and the core of his business is in stretch denim.
Bongo officials said their business is growing.
“All I can say is that we are sold out through Sept. 1,” said Gary Bader, president of the New York-based company. “We have always been fourth in line and I am seeing a shift in the market with some new guys coming on very strong. I think that we have slipped into third place as far as open-to buy is concerned.”
Bader said that up until six months ago, the company has tried to go head-to-head with LEI and Mudd, but gave that up to create their own niche in the business.
“We are letting them take that denim business,” he said. “We just decided to dress it up a little bit. We look at those better jeans labels and trend it down a bit for our more junior customer.”