Byline: Valerie Seckler

NEW YORK — For the virtual fashion crowd, the Internet has been a game of hurry up and wait.
It’s a phenomenon that had executives at fledgling e-business consultant Chelsea Interactive expressing frustration, even as they revealed plans to launch e-commerce sites for three style-driven labels during the first half of 2001: outdoor megabrand Timberland, Madison Avenue retailer Liz Lange Maternity, and men’s wear designer Jhane Barnes.
“I thought a lot more fashion brands would have been selling direct to consumers online by now,” admitted William (Billy) Bloom, vice chairman of Chelsea Properties, parent of Chelsea Interactive, in an exclusive interview with WWD. It’s a view held by many Web watchers.
“Whether the Web will be, maybe, 5 percent or 15 percent of a brand’s business, we think the fashion labels will need to be there,” Bloom continued. “It’s like the outlet store business. Until brands like Liz and Ralph started opening outlets, it didn’t happen in a big way.”
Bloom should know. Chelsea Property Group, formed 15 years ago as Chelsea Realty GCA, today owns 27 outlet centers in 15 states and Japan which focus on upscale fashion and home goods at a discount. The firm, with headquarters on the north end of the fashion district, formed its Chelsea Interactive affiliate in 1999, and last year the unit completed its first cybermissions, launching the e-commerce site for Liz Claiborne’s plus-size collection,, and relaunching Maiden-form’s online store, as well as implementing its technology at, the Web site of the prestige footwear brand that is owned by Nike Inc. During the second half of 2001, Chelsea plans to launch two e-commerce sites for New York-based InterShoe, whose brands include Nickels and Via Spiga.
In forming Chelsea Interactive, Bloom recalled, “Our question was, if we invest as much into an Internet project as we do with one of our outlet centers, could we make a good business? We think that if it amounts to around 3 percent of a brand’s business, it makes sense,” he added of the business model, which includes a revenue-sharing provision. Although revenues weren’t disclosed, Chelsea Interactive lost $2.4 million during the fiscal year ended Dec. 31.
Despite the presence of some fashion pioneers online, including Chelsea’s handful of projects, Bloom was scratching his head over the paltry pace at which style-driven brands are going direct to consumers online — or not. “Are you surprised? Did you expect to see more action by now?” he asked an observer. “It’s interesting how many brands haven’t yet gone online. A number of these people will become re-energized in looking at e-commerce as a business model, maybe later this year,” Bloom projected.
The stream of style-driven brands expected to start selling direct to their customers online during 2000 — or lay plans to do so — turned out to be a trickle of names. That’s largely because the brands are still worried about alienating retail accounts by going direct to the consumer — even though the world did not come to an end when they began opening outlet stores in earnest a couple of decades earlier.
They include Polo/Ralph Lauren, which went live at in November, and Elisabeth, which also bowed in November, as well as Diane Von Furstenberg, which is aiming to start selling online, at, by late April. The Von Furstenberg launch has been pushed back from a February date, in part, to coincide with the opening of a Diane Von Furstenberg Studio boutique on West 12th Street, also slated for late April. Christian Dior, whose goods are offered at, still has a stand-alone site under construction, and Oscar de la Renta, which went live with information in November but has no plans to add e-commerce at this time.
Others that had anticipated possibly making the leap to e-commerce during 2000 got cold feet, such as Versace and Tommy Hilfiger, which both went live on the Web without a product offer; Donna Karan New York, which started selling online via e-tailers such as,, and, rather than going direct to its cybercustomers, and Giorgio Armani, whose e-commerce experiments remain limited to the house’s most accessible collection, A|X Armani Exchange. A|X has offered a limited selection of goods online since 1995 and was relaunched with a much broader assortment in February 2000.
“We’re trying to use the medium of the Internet to give consumers broader access to the Timberland brands in a more graphic way, and in a more data-rich way that will provide us with information about our customers,” noted Scott Thresher, Timberland’s senior director of e-commerce, who joined the firm from management consultant Bain & Co., 15 months ago, to spearhead its cyber-effort. “We don’t do that in any other forum. At this point, the e-commerce site is more a strategic play than a revenue play,” he added. “We think it could be 1 to 2 percent of our business [$11 million-$22 million annually] in the near term.”
Nonetheless, Timberland expects the e-commerce venture to become profitable, and in relatively short shrift — “a year or two” from its scheduled May 15th launch, Thresher estimated. He cited Chelsea Interactive’s business model as the reason why. Chelsea, which to date has sunk $30 million into the various projects it has undertaken along with its strategic partner, Reston, Va.-based e-commerce enabler Proxicom Inc., provides the lion’s share of funding for the Net ventures it counsels. For example, Timberland to date has spent “well less than $5 million” on the startup, Thresher said.
In a departure from the approach it’s taken to merchandising its own stores, Stratham, N.H.-based Timberland will offer an assortment of about 9,000 stock keeping units online representing all of its brands — Timberland, Mountain Athletics and Timberland Pro. And it will boost the proportion of apparel it carries at to 50 percent, compared with 45 percent at its brick-and-mortar stores, because the company believes it will be easier to sell those items online than footwear, a notoriously difficult product to fit. Timberland, with full-year sales of $1.1 billion for 2000, derives about 25 percent of its revenue, or $275 million, from its own stores, which include 45 Timberland outlets in the U.S. — many at the Chelsea-owned centers — in addition to the specialty units.
The rest is produced by the firm’s wholesale division, and 80 percent of that business, or $660 million, stems from sales of footwear. Overall, Timberland realizes 70 percent of its annual revenue, or $770 million, in the U.S., and initially, the Web site will be available only for stateside transactions. Expansion abroad is part of the long-term picture, but Thresher said Timberland would like to get the busy third and fourth quarters of 2001 behind it, before doing so.
In the meantime, Bloom is still expecting some more company in cyberspace. “We look at the Net as a channel consumers will expect, if they don’t already,” Bloom concluded, “and we can help fashion companies and brands to do this online.”