Fast fashion is surely a draw for the young crowd, but well-established names exude the cool that scores best in the young contemporary arena.
With a major expansion effort and numbers that beat Wall Street estimates almost every time, Guess once again leads the top 10 for the young contemporary market. Abercrombie & Fitch also did well, making a leap to second place from fifth last year, and Express, Esprit and Limited Too all improved since 2005. New to the roster is Ocean Pacific, eighth, and Mossimo, 10th.
Guess’ marketing, expansion and a return to profitability in wholesale have characterized the past year. The brand quickly branched into Europe, adding over 34 freestanding retail sites in 2005. Along with U.S. labels American Apparel and Rock & Republic, Guess took part in a boisterous “Los Angeles Fashion Event” in Paris to trumpet the West Coast brands’ arrival in the City of Light. Guess Man, a musky scent launched at 1,800 doors in March, is projected to generate $20 million in first-year retail sales. Thanks to such developments, Guess’ first quarter had an 88.6 percent increase in earnings and a 20 percent hike in sales.
Famous for clothes-optional advertising, second-place A&F posted strong sales last year as it stepped up anticounterfeiting efforts. In the quarter ended April 29, net sales increased 4 percent to $312.7 million. The company is growing internationally. It plastered London’s Burlington Gardens with eye-catching billboards to herald its arrival on the block, scheduled for next year, and opened three stores in Toronto and two in Edmonton, Alberta, in December. It also recruited a former FBI agent to head its protection team and fight counterfeiters, and in January, in cooperation with authorities in Taipei City, Taiwan, it uncovered over 4,000 T-shirts, polos and other counterfeit items.
Down one place to third, Disney has several new ventures in the works. In May, at the Minnie Marathon weekend, there was a Champion-Disney collaboration for Champion’s new women’s athletic line, O2Cool. Following the example of hot youth retailers Kitson and Junk Food, Disney continues to license its famous characters for upscale products like cashmere sweaters and diamond necklaces. Last fall, Victoria Casal launched a diamond jewelry line featuring Tinkerbell, priced from $833 to $27,770. Disney Couture has also done well, boasting sleepwear and loungewear from Modal, which is peppered with Disney characters like Bambi, Alice in Wonderland and Princesse Tam Tam. Disney Couture Jewelry announced a collaboration with handbag designer Judith Leiber, to create “Pirates of the Caribbean”-inspired accessories. The first of Disney’s handbag ventures, the Judith Leiber line includes gold and Swarovski crystals to entice high-end customers.
Limited Brands Inc. is well represented; Limited Stores came in fourth and Express climbed to fifth from 10th place last year. In April, Avra Myers of Club Monaco joined Limited Stores as its top merchant. The division finally appears to be turning a corner, after being thinned out to 320 stores that generate approximately $580 million in volume. Recent offerings have included skinny jeans, cargo and cropped pants, and tops with eyelet, lace and pleats.
Express, no stranger to WWD lists this year, placed sixth on a weekly list in April that ranked women’s retailers based on what teens considered to be the trendiest. John Morris of Harriss Nesbitt Research said Express’ “new merchandising executives are showing early signs of success in repositioning the brand to be more on trend with compelling product.” In February, Express posted a 6 percent rise in comp-store sales. Separately, Express created hip uniforms for the staff of Hotel Vicor, a boutique hotel in Miami’s South Beach.
Esprit continued its comeback this year, tying tween favorite Limited Too at number six. Esprit aims to grow in North America and named Jerome Griffith, formerly joint global chief operating officer of the brand, as president of Esprit North America. Though its performance is strong internationally, Esprit’s resurrection of retail in the U.S. has faced challenges. It canceled its U.S. distribution of Collection women’s suits and career clothes and all of its men’s wear. Despite the setback, Esprit Holdings Ltd. stock was recently upgraded to “buy” by Deutsche Bank Securities, thanks to revenue in 2005 of $20.63 billion and a net profit margin of 16.17 percent.
Limited Too has ambitious plans to expand internationally. The tween retailer has 19 international locations, but it aims to open more than 500 stores eventually. Chris Williams, vice president of international franchising, stressed that 70 percent of the merchandise is suitable for any climate, making it an ideal product for virtually all geographical markets. Too Inc., the operator of Limited Too, said in June that it would change its name to Tween Brands Inc. to better reflect its clientele.
Looney Toons/Warner Bros. has achieved much success with cartoon-turned-couture fashion. In seventh place, Warner Bros. has crafted characters from Tweety Bird to Daffy Duck and Bugs Bunny into hot, high-priced merchandise. Most recently, Nicky Hilton partnered with the studio on Tweety Designed by Nicky Hilton accessories and high-end apparel. Tweety has figured prominently in such collaborations and has been featured at Kitson and New York’s Scoop. In May, D’Annunzio Groupo International teamed with Warner Bros. to create high-end character jewelry selling from $750 to $50,000.
Ocean Pacific’s top 10 appearance is a sign that efforts to renew the brand into a directly operated wholesale firm are paying off. The brand, founded in 1972 by a surfboard maker, boasts several label spin-offs and a foray into premium denim and swimwear. Op is a subsidiary of Warnaco and has licenses for four brands, including Op Classic, Seven2, Ocean Pacific and Opbaby.
Twenty-year-old B.U.M. Equipment earned its ninth-place spot with a continued commitment to new licenses and partnerships, all of which have kept the name fresh. B.U.M. licensed Buffalo Group as exclusive licensee for men’s and women’s sportswear, which began this spring.
Tenth place Mossimo recorded a 74.1 percent increase in net income in the fiscal year ended in December, and was bought this year by Iconix for $33 million. Mossimo has become one of Target’s shining stars in fashion through its exclusive licensing deal. Despite this winning partnership, the brand posted a first-quarter net loss of $1.2 million in May. Mossimo president and co-ceo Edwin Lewis, remains unfazed by the temporary setback: “We were pleased with the pace of our business during the quarter, as we registered meaningful gains in both our men’s and women’s business at Target.”
2. Abercrombie & Fitch
6. Esprit (tie)
6. Limited Too (tie)
7. Looney Toons/Warner Bros.
8. Ocean Pacific/Op
9. B.U.M. Equipment
This article appeared in The WWD 100, a special annual supplement to WWD available to subscribers.