NEW YORK — OshKosh B’Gosh is looking to pull out of the doldrums by pushing into casualwear for adults.
The 108-year-old children’s firm intends to open 120 OshKosh Co. Stores through 2007, marking the first time OshKosh has ventured into apparel for the whole family and regular-priced retailing with any conviction, according to Douglas Hyde, chairman and chief executive, in an interview.
“Children’s is a small sandbox to play in,” said Hyde. He also acknowledged business has been “tough,” turnaround efforts haven’t born fruit as soon as hoped and that he’s “very impatient by nature.”
That’s why he’s anxious to roll out the new format. Three OshKosh Co. stores selling children’s, women’s and men’s apparel, as well as some decorative home accessories, opened in the past three weeks, in South Lake, Tex.; West Cobb, Ga., outside Atlanta, and Maple Grove, Minn. Thirteen additional openings are planned by the end of this year, including Plano, Tex., and Colorado Springs, both in June. “In 2005, we’ll open 25 more. In ’06 and ’07, we’re planning 40 stores per year,” Hyde added. Stores will be in the 5,600- to 6,000-square-foot range.
“These are our strategic, long-range plans,” he said. “They’re subject to change if certain things are working or not working. We’ll know better after the back-to-school and holiday seasons.”
When OshKosh was founded, it sold men’s functional work clothing, then shifted to children’s wear in the second half of the 20th century. In the Eighties and Nineties, the company dabbled in men’s and women’s casual sportswear, without much success. Currently, the business is primarily in children’s wear distributed through wholesaling and outlets. The brand ships mainly to moderate department stores, such as Kohl’s and May Department Stores, which have been hurt by shoppers gravitating toward discounters on one end of the price spectrum, and upscale chains at the other. Last year, OshKosh cut a deal with Target to design a line called Genuine Kids. It’s sourced by Target and line extensions are planned.
In addition to wholesaling, the company’s fleet of 157 outlets has been hurting, along with many other outlet operations, due to the overproliferation of outlet centers and wide price promoting at so-called “regular-priced” department and specialty stores.
Still, Hyde said OshKosh continues to resonate with consumers. “We’ve done some research on the notion of whether consumers would take us seriously in adult apparel and take the [new store concept] seriously,” he said. “Post-9/11, the whole thought process of the American family has changed. Things that express family values, longevity and Americana — the things that OshKosh stands for — are even more important now than they were before….What we are trying to do is leverage our relations with an expecting mother or a mother with young children who knows OshKosh, and create a very different, comfortable, home-like venue for shopping,” with natural wood fixturing, picnic tables and other elements reminiscent of a refurbished cottage, he said.
“This [strategy] is certainly not a slam dunk,” Hyde said. “As we have witnessed in the past, it’s a lot easier for adult brands to successfully enter kids’ [than for kids’ brands to enter the adult arena],” he said, citing Gap with GapKids and Abercrombie & Fitch with abercrombie, as examples. Carter’s and Healthtex don’t sell adult fashions, though Gymboree, another children’s firm, recently launched three Janeville stores selling misses’ apparel.
“We think OshKosh has a much broader appeal than a conventional children’s brand,” Hyde said.
At the Minnesota store, he said 22 to 23 percent of sales have been in women’s, but men’s wear has been “a little slower — under 20 percent.”
OshKosh products are designed at 625 Broadway here. There’s a staff of 20 designers — some were reassigned to women’s and men’s wear. The adult products are proprietary to the new family stores and won’t get distributed to other retailers. For spring 2005, all the children’s products in the stores also will be proprietary. OshKosh women’s jeans are priced from $38 to $44; polos, $22; belts, $19.50 to $24.50; outerwear, $42 to $59.50, and skirts and dresses, $34 to $44.
Babies’ clothing ranges from $9.50 to $29.50; girls’ shirts, $12.50 to $25.50, and girls’ jeans, $24.50 to $30. Boys’ shorts range from $16.50 to $26.50 and boys’ outerwear is priced from $29.59 to $44.50.
The stores play up a blue-and-gold label and logo design on “upgraded denim,” priced 25 percent higher than OshKosh denim sold at other retailers such as J.C. Penney.
OshKosh operates two regular-priced stores for children’s, outside Chicago, and on Fifth Avenue between 47th and 48th Streets, which next year will be relocated. Hyde said he has his eye on 34th Street, but no deal is set. OshKosh wants a bigger location, though Hyde said Fifth Avenue has been breaking even. Two other children’s stores are planned, but the family stores are expected to be more productive and to show higher margins. Hyde wouldn’t cite any projections.
OshKosh, based in OshKosh, Wisc., reported sales of $417.3 million for 2003, compared with $437 million in 2002, and net income of $7.2 million, compared with $32 million the year before. In the first quarter of this year, there was a net loss of $1.2 million on $79.5 million in sales, versus income of $1.3 million on $99.3 million in sales a year ago.