COSTUME CARRIES ON
TIGHT RETAIL SPACE, BRAND OVERLOAD AND A MARKET THAT’S TRENDING UPWARD MEAN CHANGE IS AFOOT AGAIN FOR THE OFT-EMBATTLED CATEGORY.
Byline: Wendy Hessen
Costume jewelry makers are no strangers to struggle. The segment has weathered the decline of tailored looks, years of consumers favoring bridge and fine jewelry over faux and times when they ignored jewelry altogether.
Then there’s the shaky economic outlook, an ever-consolidating and highly promotional department store landscape, what many executives say are too many similar brands competing for a finite amount of display space and the demand for increased productivity, all making it tough to turn a profit.
Case in point: Lord & Taylor’s decision to take a more upscale approach in nearly half of its 85 stores. The process — which began shortly after Jane Elfers took over last summer as president and chief executive officer of the chain, and favors higher-priced and more fashionable labels in all departments — has naturally extended to costume jewelry, where some major industry names, such as Napier and 1928, have already been dropped, and more could soon follow.
Lavelle Olexa, senior vice president, fashion merchandising at Lord & Taylor, said, “Jane took the helm in June and she really believes in the importance of accessories, and the customer response has been great. The emphasis can be seen not just on the floor, but in our catalogs, our window and displays.”
Olexa said “editing” has taken place in just about every accessories classification. Among the vendors that have been added are Ferragamo, Ralph Lauren and BCBG sunglasses and Miriam Haskell, Anne Klein necklaces reaching at $125, and Adrienne Landau wraps for about $350.
But also troubling some vendors is the number of licensed brands in the arena. They charge that some brands are licensed simply for their names, which may not have an aesthetic that is readily convertible — or brings anything new — to the category. Another concern: Pricing is often too low in an area where tags have already drifted too close to the realm of stores like J.C. Penney and Kohls.
“There were over 30 resources nine years ago, but today the environment is too challenging to think that a name alone will do it,” said one executive who spoke on condition of anonymity.
Although neither party would acknowledge it, at press time industry sources said 1928 is negotiating for the Anne Klein and Guess licenses, currently held by Swank, which could be preparing to exit the women’s business altogether. There has also been speculation that Liz Claiborne may be interested in two other Swank licensed lines, DKNY or Kenneth Cole, given its connections with manufacturing clothing lines for the two companies. Claiborne, however, did purchase the venerable Monet brand last year and may have its hands full there.
Swank president John Tulin said, “There are rumors floating all over the place. All I can say is we’re in the jewelry business and intend to stay in the businesses we’re in. It’s been a tough year, and we’re considering every option open to us.”
Among the challenges Swank dealt with last year was the closing of its 100-year-old Rhode Island manufacturing facility.
“No matter how you try to map out a transition and figure in every charge, it’s always higher than you expect,” said Tulin. “We also went through some dramatic cost reduction programs in terms of people and processes. When you start out that way, you don’t come out with a stellar year, and it’s painful for everyone. We think we are pretty much finished with layoffs and structured the way we want to be now.”
As for the future, Tulin said, “Our brands can go from tailored basics to as upscale as anybody, so we can play in just about any league. If nothing else, we’ve put ourselves in the position to go where the market goes.”
Tulin took issue with the notion that adapting a name to go with market trends instead of creating jewelry that reflects the aesthetics of the brand’s core only adds to the category’s problem. “To say that a name shouldn’t be in the business is really tough,” he said. “I’ve always felt that Estee Lauder should be in the costume jewelry business, and so should Ellen Tracy. Licensed products can have a life of their own.”
About Lord & Taylor, Richard Schock, president of 1928, said, “We’re not thrilled with the strategy, but we understand it. Hecht’s [another May Co. unit] can’t have the same assortment as Lord & Taylor does in the same mall. We’re hoping to sell our more upscale Antiquities line to Lord & Taylor, which sells in Harrods and whose prices range from $25 to $200.”
To further distinguish the 1928 brand, Schock said the company is undertaking “face contouring promotions” this fall.
“We’re taking a page from the cosmetics industry, suggesting different jewelry looks according to the shape of a woman’s face,” Schock said. “Handouts are given to customers and our merchandise staff does weekend promotions. In less than a minute, they can assess the shape and choose the right merchandise. When we’ve tested it, once a customer tries on the chosen pieces, our sell-throughs have jumped by about 80 percent.”
Ed Bucciarelli, president, Liz Claiborne Accessory Group, was cagey about the future of Claiborne and Monet jewelry brands at Lord & Taylor and would only say that Claiborne was not in discussions to buy any other licensed brands. He put a positive spin on the uncertain economic outlook.
“As the economy starts to flatten out, the whole main floor world can win,” he said. “It is easier for people to accessorize than to invest in new [clothing] purchases. People still shop in a flatter economy, they just buy differently, you still treat yourself to something. As such, we’re building products that are geared toward that type of purchase.”
Bucciarelli, long a proponent of open sell jewelry spaces, said the firm has adapted its two-sided floor towers that were originally used to expose its large millimeter pearl business. “When we tested them in 50 doors last December, the change at retail was staggering,” he said, noting that the doors with towers did anywhere from 18 percent to 128 percent better than doors without towers. “They are a small, but powerful footprint,” he said.
Though both brands are focusing on propelling strong items like bracelets and stone-accented hoop earrings, the look will be more eclectic at Liz Claiborne, with more of a fine jewelry look at Monet.
Victoria & Co. has both gained and lost from Lord & Taylor’s strategy. Its Napier brand has been edited out, but its Nine West and Givenchy lines could actually gain ground.
“Lord & Taylor may come to regret the decision to end with Napier, although Nine West is now positioned to be a bridge between classic and designer jewelry there,” said Lauren Mandel, president of the Napier and Nine West brands. “We came off a good fall, and though the fourth quarter was tough, January saw spectacular double-digit increases. We suspect the fashion jewelry world has room for continued growth.”
Lisa Otterman, who as president of the Victoria division oversees the Givenchy line, said, “Givenchy is going from 29 to 40 doors at Lord & Taylor. With a 63 percent increase last year, I am just as bullish as Lauren. Givenchy has unique positioning. We’ve built the metal designer category and the logo influence has helped us to come out with bolder gold chain looks, which are now basic reorderables. We’re making sure we’re in the right doors with the correct amount of real estate, and our international business is also trending very well.”
Trend-wise, Mandel said gold has started to sell, but it’s the two-tone business that has really been strong, as has its social/glitz area. “It has fast sell-throughs and is good for our retailers because at $50 to $100, that area is twice the average unit price,” she said.
Not surprisingly, whatever the current trend is, it surfaces quickly at Nine West. “Nine West sold more units than any Napier hoops, and we sold much larger styles,” said Otterman. “We see trends much faster and in bigger numbers in Nine West, and those things become our basics.”
At Tommy Hilfiger jewelry, another Victoria licensee, logo merchandise is trending upward, according to Tom Day, president of the division.
“The strength of logo products surprised us at Christmas,” said Day. “We sold about five percent of the business from one percent of the stock. Logo will be 10 percent of the business by April.”
Carolee Friedlander, president of Carolee Designs, said her firm is benefiting both from current trends favoring pearls as well as the consolidating retail scene.
“Lord & Taylor represents a tremendous opportunity for us,” said Friedlander. “The store certainly has the genetic code from its infancy to reestablish itself as more of a better upscale leader. Jane Elfers and her team are moving in more fashion and the right brands that are less promotional.
“At the end of the day, without a strong identity, you just wind up throwing merchandise [onto the floor] assuming it will sell because of the name. But customers now are too astute to buy that. This could be the beginning of more stores taking this strategy. There is no need for the duplication that exists.”
Friedlander conceded that “business in November and December was very tough for everyone, which was too bad because many of us entered into fall with double-digit increases. The last few months have turned around, although they were probably more promotional than we would have liked.”
Among the things Friedlander expects to continue to drive sales are colored pearls, a company signature. “Our customer knows us for champagne, and our Nouveau Neutrals collection, which has black and gray Tahitian looks, has been very good. Also, longer and bigger pearls — such as our 10-milimeter, 72-inch rope for about $60 — have been doing well, probably because they have a lot of versatility and women don’t own them already.”
“Our outlook is comfortable, she added. “Clearly there are some economic changes which will impact consumer spending, but having said that, jewelry is a little luxury that women seem to find money for.”