L.A.’S DYNAMIC DUO
A VENDOR AND A RETAILER FIND SUCESS WITH TRENDY STYLES AND REASONABLE PRICES.
Byline: Katherine Bowers / Kristin Young
FANG: THE BRAND, NOT THE CLUB
LOS ANGELES — When Stephan Brown joined Fang five years ago, it was a sleepy, local screen-printing operation with a bad case of mistaken identity.
“When I started, most of the calls were wrong numbers. People would be asking if this was the Fang Club,” Brown said. “One day, I asked what the Fang Club was, and they said it was a vampire fan club.”
When Brown asked if the club actually drank blood, the response was disconcerting.
“No, but we used to,” the caller said.
Brown’s plans for the Gardena, Calif.-based Fang were distinctly less ghoulish: to take an operation doing less than $1 million annually and put some teeth into it.
In combination with head designer Denni Kopelan, Brown has succeeded in bringing Fang’s business on track to surpass $40 million this year, more than doubling last year’s volume. The brand is sold in chains such as Wet Seal, Rampage, Charlotte Russe and J.C. Penney Co., as well as in a network of specialty boutiques.
Tony Kim, who founded Fang, rewarded Brown and Kopelan with an equity stake in the company in 2000. Brown attributes the firm’s fortunes to two key factors: in-house production and Kopelan’s creativity, which has included medallion print tops. These top-selling items feature intricate, jewel-like motifs often embellished with glitter, gems or metallic thread.
“We’re in the millions of units sold at this point, and it’s still the core of our line,” Brown said. “The medallion opened many doors to us.”
Penney’s junior tops buyer, Mary Carol Wolfendale, said the store has carried medallions for more than a year and they are still selling well. In a tough retail environment, the company is ahead of plan in sales for Fang’s glitter flag screen and “attitude-sayings” tops, she said.
Although medallions remain in the mix, the line’s offerings range from athletic tops spliced with contrasting images to Raoul Dufy-esque tropical sketch prints. Inspired by handbag designer Isabelle Fiore, Kopelan has used sequins to highlight a single feature. For example, a pineapple is picked out in golden sequins in an overall design of a fruit bowl.
Harriet Sustarsic, president and chief merchandising officer of San Diego-based Charlotte Russe, said of Kopelman: “She’s incredible in her ability to react to forward fashion and what’s shaping trends on the streets and runways.”
Although 80 percent of its business is tops, the company is diversifying. Bottoms bowed at the October market in Los Angeles, and dresses launched in August.
The dress category has downtrended in recent years, but Kopelan said she believes in the resurrection of “sneaker dresses,” casual jersey dresses that can be thrown on with thongs or tennies.
“You have to be flexible in the junior market,” Brown said. “What’s hot this morning is cold this afternoon.”
To handle rapid growth, the company has boosted production, adding a night shift to bring capacity to 150,000 pieces per week. Although they use some T-shirt suppliers, they cut and sew key bodies in-house.
Rachael Barnard, a buyer for Wet Seal, said Fang’s quality is “really good.”
“A lot better in construction than other vendors,” Barnard said. “They’re not at the mercy of everybody else for how their product turns out.”
Still, keeping things mostly in-house means Fang has to turn some things down, such as inquiries from major retailers about a plus-size tops program.
“I just don’t have the capacity,” Brown said.
September was the biggest shipping month in company history, Kopelan said. To celebrate, the company threw a party for its 150 employees to mark the milestone.
“Here’s the way I look at it,” Brown said. “This could all go away tomorrow, so when I get an order, even for 36 pieces, I say, ‘Thank you very much.”‘
REFERENCE: FASHION, NOT RESEARCH
LOS ANGELES — Trendy fashion at rock-bottom price points is taking precedence over brand names in the junior market, according to industry watchers.
The phenomenon has given rise to Reference Inc., a privately held, 25-unit chain based here that claims sales per square foot rivaling Wet Seal, Rampage and PacSun, some of Southern California’s big junior retailers.
Reference’s concept is the same that has propelled Los Angeles-based Forever 21 and Sweden’s Hennes & Mauritz to cheap-chic status: Fashion, at price points ranging from $22 on the low end to $100, can be bought today and thrown away tomorrow.
From California to New York, handfuls of Reference stores now dot several top markets, including Los Angeles, San Diego and Chicago, in addition to areas in Texas, New Jersey and Pennsylvania. Depending on location, they rack up sales ranging from $300 to $800 per square foot, claimed Young On, president of the three-year-old venture.
Malls are hungry for a Reference.
Paseo Colorado in Pasadena, Calif., opened a Reference store late September. Montgomery Mall in Bethesda, Md., Tysons Corner in Virginia, and The Grove at Farmer’s Market in Los Angeles are some sizable projects that have signed Reference for future stores.
“Mall owners are always willing to talk to a tenant that is productive in their mall and builds exciting stores,” said David Contis, chief operating officer of The Macerich Co., owner of malls throughout the U.S.
Confirming On’s sales estimates, Contis has opened Reference in Los Cerritos, Calif., and Pacific View Mall in Ventura, Calif., and is negotiating to add them to several other Macerich projects in New York.
“They do unbelievable business at Los Cerritos Mall, almost 75 percent more than the mall average,” he added. “We’re talking to them about coming to Santa Monica Place. That shows you about how well we think of them.”
On, interviewed at Reference’s downtown Los Angeles headquarters, said he has an ambitious growth plan to open 10 stores per year, with the goal of 50 units nationwide in the next few years.
On said his concept is based on variety. At stores that are designed to match each mall’s style, apparel for the junior customer, like low-rise jeans, logo T-shirts and sweater coats, hangs alongside blouses and suits for an older age group. The target customer can reach from teens up to a woman in her 40s.
Most stores are about 6,000 square feet in size. About 60 percent of merchandise is Reference private label, while 40 percent of space is devoted to XOXO, Candie’s and Skechers. Shoes, handbags and jewelry round out the mix.
“Better lines in our junior stores is our goal,” said On, who has spent the last 15 years running a trimming company called Judy’s Belts Trimming. “We develop more sophisticated junior clothing. If some company is selling a T-shirt with an American flag, we have it in rhinestone.”
At any one time, there are between 200 and 500 styles in stores. Since 80 percent of clothing is farmed out to local manufacturers, if a trend is missed, it can be produced in about a week. About 20 percent of commodity goods like T-shirts are produced in Hong Kong and South Korea.
“The clothing is basically disposable clothing and what’s most important to juniors is the look and the price point, not necessarily the brand,” said Richard Giss, a partner in the retail services group of Los Angeles-based Deloitte & Touche. “Reference is not the only store that’s benefiting from that.”
Giss said the junior market is benefiting from something else: The group generally doesn’t follow the news as closely as other age groups and have been initially immune to the psychological downturn caused by the Sept. 11 attacks.
“They’ll be the secondary victim when their parents or when the money source starts to cut them off — that’s when it will hit them,” he said. “But for right now, retail locations that offer [junior customers] value for dollars are going to succeed.”