BOSTON — Target has snagged its own major jeans label.

In the continuing evolution of major brands grabbing a piece of the mass market, VF Corp. has placed a sub-brand of its Lee franchise at Target stores, WWD has learned.

This story first appeared in the July 17, 2003 issue of WWD. Subscribe Today.

While Levi’s Signature Brand is making its much-ballyhooed bow at Wal-Mart, Target and VF has been cooking up a launch of their own.

Blue Jeans by Lee, a new brand designed exclusively for Target by the Greensboro, N.C.-based denim manufacturer, is just hitting the floors at the discounter’s major-market stores.

“They just arrived last night,” said a store associate in the Los Angeles suburb of Commerce, Calif., adding the new brand offered blue and black denim priced at $19.99 with matching belts.

Both Target and VF declined to comment, but VF chairman and chief executive officer Mackey McDonald has been vocal about his plan to use acquisitions or launches to make up for lost shelf space at Wal-Mart. Referring to the Levi’s deal during a conference call in February, McDonald noted, “We do see an impact at least for the short term, but we have many new growth initiatives we’ll be launching in the coming weeks and months across our jeans brands.”

With Blue Jeans’ launch — and VF’s announcement last week of its intention to acquire Nautica for $585.6 million —McDonald has filled both bills.

According to sources close to the deal, the launch spans women’s, men’s, boys’ and girls’ wear. It will be sold in most of Target’s 1,107 stores, but will not be a large or elaborate offering, at least initially.

On the women’s side, Blue Jeans by Lee gives the Minneapolis-based retailer an updated, basics line for the 25- to 45-year-old contemporary customer. According to a source, the product will initially focus on mid-rise bottoms, offered in petite, medium and tall lengths and in a variety of washes.

In dubbing the new brand “Blue Jeans by Lee,” VF is trading on one of its well-established brands to create an aura of quality and familiarity in its new brand. The practice is already commonplace in better and upscale department stores. Multiple permutations of Ralph Lauren’s name, for instance, denote different price and customer bases, yet reference an overarching mood.

Target has already successfully harnessed the credibility of multiple major brands in several of its proprietary lines, including Tykes by Carters baby accessories and clothing, Kitchen Essentials by Calphalon and Martex Royal Legacy sheets. Warehouse club Costco has been hugely successful linking major brands to its house label, Kirkland, marketing everything from Whirlpool by Kirkland washing machines to Kirkland jelly beans by Jelly Belly.

The VF-Target arrangement echoes the Levi’s-Wal-Mart partnership, although sources close to the deal say this one is much smaller in scope and will not immediately affect VF’s volume. In contrast, Levi’s ceo Phil Marineau has publicly bet on Levi’s entry into 5,000-plus Wal-Marts to end its long-running sales slump.

To date, Wal-Mart and Kmart have been VF’s mainstay mass accounts. The latter carries VF’s Wrangler and Riders brands, while the former carries Riders, Chic and Gitano.

Lee is arguably the denim jewel in VF’s crown — and it’s a coup, said observers, for Target to get it. On WWD’s top 100 brands, Lee came in at 14, edging its sister brand, Wrangler, by three spots.

Like Levi’s, Lee sells primarily to mid-tier retailers. Local Sears and Kohl’s stores recently had prominent table stands of Riveted by Lee, the brand’s more fashionable women’s collection endorsed by celebrity spokeswomen.

Ultimately, a deal with Target is another asset VF brings to its fight to stay atop the mass-market mountain.

The channel sells 63.3 million pairs of jeans annually and has been stealing business from other formats, according to Marshal Cohen, co-president of NPD Fashionworld.

“As much as I love Target, it is not the same powerhouse that Wal-Mart is,” reflected Cohen. “It will take them several Targets to catch up, but it’s a start.”

Thomas Lewis, an analyst with C.L. King, said VF is masterful at differentiating product lines in order to serve retailers, even producing small batches of brands like Gitano for a subset of Kmart customers who stick by the label. “One of the least appreciated things about VF is its ability to ID its customer, right down to the eight or so kinds of intimate apparel buyers.”

Jeffrey Edelman, analyst with UBS Warburg, said exploring new avenues is sound business, especially since VF is also taking a hit from Kmart’s store contraction. “Any company has to be on the search for new channels of distribution for new product, so I would not say this is at all out of the ordinary,” he noted. “This is not a business in which you can wait around to see what happens.”

Sally Schaadt, an analyst with Fourteen Research Corp., said: “I suspect Target has done its homework and knows specifically what it wants. Certainly then, VF would be the vendor of choice when it comes to a denim line.”

Currently, Target’s denim business revolves around trendy junior offerings from Mossimo and, to a lesser degree, more Americana-casual stylings from Cherokee. On recent visits to local stores, Target was notably lighter on denim than its competitors.

With Blue Jeans’ arrival, the retailer is taking another step in what appears to be a reshuffling of its contemporary business, which has been driven by plain-Jane career basics from Mossimo and private label Merona. Isaac Mizrahi is expected to introduce his exclusive line of updated basics in August. The department is also stocking a new novelty dress line — dubbed Faith, Love, Passion — as evidenced by merchandise in Massachusetts stores.

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