HOTTER THAN EVER
HOT KISS OWNER MOSHE TSABAG IS PAYING MORE THAN JUST LIP SERVICE TO PLANS FOR HIS COMPANY’S SUCCESS.
Byline: Kristi Ellis
Call him optimistic. As the economy heads into a slowdown and pundits warn of consolidation and bankruptcy, Moshe Tsabag, owner and principal of the junior brand Hot Kiss, is moving forward with expansion plans and licensing deals he expects will mark a new era in the company’s growth.
While other companies prepare to cut costs and consolidate in anticipation of a weaker economy, Hot Kiss plans to double its factory space, sign four licensing deals, launch its biggest advertising campaign yet and increase its showroom space on both coasts.
“I positioned the company for takeoff this year, and it looks like it is going to happen,” said a confident Tsabag. “We will offer a lot of innovative product and be consistent. That’s how we’ll do the business.”
To put Hot Kiss on the map and keep it there, Tsabag will support the denim and sportswear divisions individually with a $1.5 million advertising budget.
Tsabag said he has scheduled ads to run through spring in consumer magazines such as Cosmopolitan, Seventeen, Teen People, Marie Claire and YM and in trade journals WWD, California Apparel News and Sportswear International. The ads play off two quintessential elements of the California lifestyle: beauties and the beach. Hot Kiss will also mail 5,000 spring catalogs to consumers and a 40-page look book to editors and retail buyers.
Operating on the premise that young consumers will buy new product regardless of the state of the economy, Tsabag expects to increase his volume from last year’s $30 million to upward of $45 million in 2001. The company will accommodate the anticipated growth by doubling the current 13,000 square feet of factory space by October.
Tsabag also plans to complete the expansion of the Los Angeles showroom in the CaliforniaMart from 800 square feet to 1,800 square feet by mid-January. At the end of December, the New York showroom relocated to a 2,600-square-foot space, an increase of 1,000 square feet. The larger digs and new divisions arrive as the brand enters its fifth year. Tsabag founded Hot Kiss as a sportswear and lingerie company. The lingerie line as since faded away, but the sportswear remains and has since been joined by a dress and highly successful denim division.
The introduction of denim last fall, in fact, signaled a turning point on the bottom line and in the brand’s presence, said Tsabag. Denim currently represents 20 percent of the company’s overall volume and is expected to increase to 50 percent by year’s end.
By mid-decade, Tsabag believes denim will dominate his business. “We are getting a fantastic response to denim because we represent more of its fashion element, rather than the basics.” With denim being Hot Kiss’s fastest-growing category, the company is offering six different weights and countless trends, including patchwork, colorblocking, white denim, frays, tie-dye, graffiti and paint splatter.
But Tsabag isn’t relying on denim alone to carry the brand name. Since the start, Tsabag has banked on novelty to drive business. For spring and summer, anticipated bestsellers are vividly colored camouflage prints, jumpsuits, HotPants, mesh tops and ruffled dresses.
“We feel strongly that dresses are coming back,” said Tsabag. “They’re not just seasonal. And if you give them a little bit of a twist, the girl might find an interest all year round. We are investing in dresses, even though the category is on the slow side.” Tsabag also looks to licensing as a way of expanding Hot Kiss’s horizons. Currently under negotiation are eight separate licensing deals, including shoes, handbags, backpacks, watches, innerwear, outerwear sunglasses and swimwear, that could be finalized by the first half of 2001. A tween line, designed and produced in-house, is also in the works and could be launched before the year is out. The company currently produces a kids’ line that is carried by Bloomingdale’s.
“Moshe has done an extraordinary job of ensuring that Hot Kiss is a brand and not just another junior label,” said Larry Jacobson, a partner in Stonefield Josephson Accountancy Corp., which is brokering the licensing deals. Jacobson added that the advertising campaign and Tsabag’s aggressive expansion efforts augers well for the company.
Hot Kiss boasts a retail account base of 300, according to Tsabag. Gadzooks will add Hot Kiss to 17 new doors this spring, adding to its current 377. “They are on target as far as trends go,” said Jackie Randall, divisional merchandise manager for juniors at Gadzooks. The Dallas-based specialty chain has carried the brand for the past three years.
“We are definitely doing better with [Hot Kiss] sportswear over dresses, though that’s a matter of timing, since dresses are a spring item,” continued Randall. A signature lip-print T-shirt and lace-up tanks made the tops category particularly strong, she noted.
At the Washington-based specialty chain Up Against The Wall, Hot Kiss is carried in all 18 stores. While not one of the top performers, because fashion director Wendy Red does not buy it as heavily as other lines, she has carried Hot Kiss sportswear since its debut. She recently began testing denim in a handful of stores. “It’s fast and trendy, with great quality and prices,” said Red.
“At the October market, Hot Kiss was the most innovative company in denim with its different washes and treatments. Some companies are scared to do anything different, but [Tsabag] wasn’t.”