Since arriving in North America in 1996, the Mavi brand has grown into a $40 million enterprise on the continent. But over the past year, its growth track in the region has leveled off, with executives at the firm contending that the slow economy is largely to blame.
In an effort to ensure that the brand remains on track, Mavi America Sportswear last month brought in David Frankel to fill the new post of president of U.S. operations. In an interview last week, Frankel and Mavi chief executive officer Ersin Akarlilar said they are trying to balance their goal of growth, while avoiding the dangers of overdistribution.
“We are satisfied with the wholesale accounts that we now have in place. That’s not to say that this business won’t continue to grow,” said Akarlilar. “The growth this year has slowed down, but that is a sign of the macroeconomy slowing down.”
Frankel said his goal will be to drive sales by increasing the volume the brand does at the roughly 1,000 retail doors in which it’s currently distributed.
“There is an opportunity to increase the doors,” said Frankel, who joined the company after serving as president of Urban Outfitters’ wholesale division, Free Peoples. “The most growth will come through increased penetration through our existing accounts.”
In addition to selling more jeans, the company plans to expand its presence in other apparel categories, such as knit and woven tops, as well as accessories. The key strategy, he said, would be “being very consistent in how we manage and present the brand to the consumer.”
While the company has experimented with advertising in recent years — briefly running a TV campaign in 2001 and 2002, Frankel said he didn’t plan to emphasize conventional advertising.
“We’ll look to invest in nontraditional ways of marketing,” he said. “I’d rather spend our marketing dollars in our partners’ stores, by having the visual collateral, by having a Mavi person in there to help manage the collection.”
Building the brand’s prominence was also the goal when the company opened its first North American retail store in New York this spring. Since then, it has opened a unit in Vancouver, and this weekend opened in Berlin. Akarlilar said there are also plans to open a Montreal location in March or April, and perhaps another U.S. unit next year.
“This is the critical market,” Akarlilar said of the U.S. “This is where global brands are made.”
Part of the reason for adding Frankel to the management team was to free up Ersin Akarlilar, son of company owner Sait Akarlilar, to drive growth elsewhere in the world.
Worldwide, Mavi’s current volume exceeds $200 million, the younger Akarlilar said, and the company has major markets in Europe — where it’s on track to do about $30 million in sales this year — and in its home country, Turkey, where it makes all its jeans and sells about $70 million worth of product a year.
The company also has distribution in Australia, the Far East and the Middle East, as well as countries such as Jordan and Egypt.
Akarlilar said the company would continue to apply the retail formula it developed in New York, which calls for setting aside about one-third of the store for gallery space to showcase local artists or other attractions, to the rest of the world. His goal, he said, is “not to become a retail chain, but to have strategically located flagship stores.”
Frankel said long term, he believes the brand can grow exponentially. “I think Mavi is on the way to becoming a billion-dollar brand,” he said.