CAROLEE IS SOLD: OWNER PREPS ROLLOUT, RIPE FOR NEW DEALS
NEW YORK — In a surprise maneuver, Carolee Designs Inc., one of America’s premier jewelry and accessory brands, has been sold to retail Brand Alliance Group, a new company formerly called Casual Corner Group.
Retail Brand Alliance Group, aside from running Casual Corner, August Max and Petite Sophisticate chains, is seeking to become a major retail player and create the country’s first operator of small specialty stores featuring upscale brands. It’s planning to open Adrienne Vittadini stores, and is on the prowl for additional acquisitions.
The company is said to be among the seven or so firms vying for Brooks Bros., which is up for sale. This week, a second and more involved round of meetings and bidding for the men’s chain commences, though a deal is not expected to be culminated until late August or September. In light of its new strategy, Retail Brand Alliance emerges as a serious contender.
Others reported to be even stronger contenders for Brooks Bros. are The May Department Stores Co. and The Men’s Wearhouse. Texas Pacific and Dickson Poon are also said to be in the running, and this past week, rumors resurfaced that Ralph Lauren has shown some interest.
In the meantime, Retail Brand Alliance told WWD exclusively that it plans to roll out freestanding Carolee shops — 50 to 100 in three years — modeled after the Carolee designer prototype store opened in Greenwich, Conn., last year. The company would not disclose the purchase price for Carolee, a $50 million accessory and jewelry brand housed on the main floors of better and upscale department and specialty stores around the country, including Saks Fifth Avenue, Neiman Marcus and Bloomingdale’s, and led by Carolee Friedlander, a highly entrepreneurial and visible figure in retail and fashion circles. She founded the company in 1973 and owned it along with her family. Abroad, the Carolee brand is sold at Harrods, House of Fraser, Mitsukoshi, Holt Renfrew and David Jones.
With the purchase, Friedlander becomes a senior vice president and a director of Retail Brand Alliance, reporting to Claudio Del Vecchio, chief executive officer and president, and she remains ceo and president of the Carolee Designs division. Del Vecchio assumed ownership of Casual Corner Group in 1997 from his family, which owns Luxottica Group SpA, operator of LensCrafters. Retail Brand Alliance did more than $900 million in sales last year.
The deal for Carolee happened fast. Last April, Mark Shulman, chief operating officer of Retail Brand Alliance, contacted Friedlander, whom he has known for many years, for help in creating Adrienne Vittadini jewelry. When he visited the Carolee store in Greenwich, Friedlander said “the discussions escalated. We also talked about my retail strategies,” which were modest at the time, calling for a handful of openings in the next year or two. “We fell in love with Carolee’s store in Greenwich. It’s phenomenal,” Shulman said.
The store houses the “Signature” collection. It’s higher in price than the Carolee merchandise sold in other stores, which will enable the future Carolee stores, as Shulman and Friedlander stressed, to stand on their own and not cannibalize Carolee’s business in most department and specialty stores.
At the Carolee store, merchandise is displayed in “vignettes” with handbags, jewelry, belts, scarves, wooden boxes, hair accessories, tabletop, picture frames and other home accessories and items mixed together for a coordinated look and stronger style message. In department stores, categories are kept separate, so putting items together to create a look is tougher. Friedlander said her Greenwich shop “really reflects how a women shops. It’s a way of merchandising that you can only do in a specialty store.”
Eighty percent of the jewelry found in the store is sold at Neiman’s and Saks, but not other stores. It comprises bridge-priced, semiprecious stones and freshwater cultured pearls, versus the fashion costume jewelry sold elsewhere. The store has other exclusive products with limited distribution, and Friedlander is developing additional products just for her signature freestanding stores, including handbags. Carolee is planning to add hair accessories and watches to the signature collection in the fall and eyewear in the spring for her stores.
The store, created by Vignelli Design, has a modern, neutral, clean interior with a tile floor, green frosted glass surfaces on the wall and warm wood shelving, which helps the merchandise to project.
The Greenwich store, with 650 square feet, including 500 for selling, has been posting slightly less than $1,000 in sales per square foot. Future units are seen at around 1,000 square feet, and are projected to average more than $1,000 in sales per square foot, including the Greenwich unit.
Shulman and Del Vecchio envision the Carolee brand as a national rollout vehicle and said it fits right into their plan for reengineering the Enfield, Conn.-based Casual Corner Group into Retail Brand Alliance, now an umbrella organization for the Casual Corner Group, Adrienne Vittadini and Carolee divisions.
“This newly formed company was created to more accurately reflect our vision, which is to be a premier retail group with a portfolio of highly specialized fashion companies, each with its own distinct brand positioning and consumer identity,” Del Vecchio said in a statement.
The company also is continuing to turn around the moderate-to-better priced Casual Corner store group through renovations and product development.
“The company has tremendous clout with the malls, and with its infrastructure, will leapfrog Carolee to a new level,” said Friedlander. While Friedlander brings expertise in design and product and has a high-profile with retailers and customers, Retail Brand Alliance has the wherewithal in areas such as finance, real estate, MIS, systems and human resources, to accelerate the growth of Carolee retailing.
“Our vision is to develop retail concepts that are unique,” Shulman added. “There is nothing like the Carolee retail concept in the malls. For sure, we’re looking at 50 to 100 stores in the next three years,” and possibly more after that. Three to five leases for Carolee stores are expected to be locked up within 10 days. “We’ll get three to five opened this year, and evaluate the results, and start to roll out more stores in the spring,” he said. Asked if the general retail slowdown would stall plans, Shulman responded: “The timing couldn’t be better. Accessories and cosmetics do great in tough times.”
Carolee expansion costs will be high, considering that affluent street and mall sites are being sought, and the caseline and drawers with unique design and locks, and other fixtures, require custom detailed work.
Shulman said the group is seeking additional retail concepts to buy that are “very American, very focused” and wouldn’t cut into each other’s business.
While declining to comment on Brooks Bros., he did say that retailing men’s wear is being considered. Home is another category being considered. While seeking acquisitions, Shulman said that his group is also advancing the Adrienne Vittadini brand.
“We’re about to sign five locations for 2002,” he said. They will be about 5,000 square feet in size, with knitwear accounting for 50 percent of the assortment. There also will be other sportswear, footwear, handbags, legwear, eyewear, scarves, jewelry and fragrance. A Vittadini men’s collection will be introduced for fall 2003, Shulman said. Last February, under its former guise as Casual Corner Group, Retail Brand Alliance purchased Adrienne Vittadini for $8.5 million.