INNERWEAR SPACE RACE EXPECTED TO PRODUCE SMALL-FIRM SHAKEOUT
Byline: Karyn Monget
NEW YORK — The shakeout hasn’t begun.
Some of the biggest designer names in fashion have been sparring for additional dollars and space in intimate apparel departments of major stores for about a year, but even more are joining the battle.
Before long, say retailers, because of the finite amount of space available for in-store shops, there are bound to be casualties: smaller brands and even some designer names.
The struggle is not only churning among designer powerhouses. It’s already beginning to take a toll on established brands that do not have a national presence, as well as smaller labels that lack the financial resources or marketing skills to create a powerful retail partnership.
Another class of business also is crowding the innerwear landscape: private label brands created by major retailers — brands with their own cachet backed by the marketing muscle of a major buying group.
A classic example: INC, a private label multicategory line that includes sleepwear introduced by Macy’s parent, Federated Department Stores, in 1996.
INC sleepwear has been merchandised in what the company calls “value-driven” shops with customized fixtures in Macy’s, Rich’s, Burdines, Goldsmith’s and Bon Marche for the past year. A line of INC foundations was added to the mix in April to create a collection concept.
Other examples of how space has been cannibalized in innerwear departments include the Calvin Klein Underwear area at Macy’s Herald Square — which commandeered 2,400 square feet in 1996 — and Ralph Lauren Intimates, which swallowed one-half of the sleepwear area, or about 1,000 square feet, at the Bloomingdale’s flagship last summer.
Despite an expected upheaval among brands, retail executives generally said designer intimates is a classification that continues to create the big noise in innerwear departments.
They liken it to a sort of celebrity draw for consumers who yearn for designer goods at a fraction of the price they would pay for ready-to-wear with the same label. It’s often a buy based on aspirational goals — many consumers want to look and feel like supermodels such as Christy Turlington, who does the Calvin Klein Underwear ads, or Laetitia Casta, who appears in Ralph Lauren Intimates ads.
The annual budgets for each of the designer’s innerwear ad campaigns are about $25 million each, according to sources.
Key categories are women’s underwear, bras and related daywear items such as camis and tank tops that have a sportswear flavor. Retailers note that sell-throughs consistently are in the mid-to-high double digits.
The main players are Calvin Klein Underwear, which is owned by The Warnaco Group and which made its national launch under Warnaco’s aegis in 1995, and two licensees: Ralph Lauren Intimates by Sara Lee Corp., introduced last summer, and the six-year-old Donna Karan Intimates at Wacoal America.
The space race is expected to intensify this fall when a licensed collection of women’s sleepwear and robes bearing the Tommy Hilfiger label makes its debut. Cypress Apparel, a unit of Russell-Newman Inc., a Denton, Tex., apparel maker, is producing the line.
As reported, DKNY Intimates will make a big push in early 1999 with a full collection of women’s underwear, foundations and sleepwear. Wacoal America is licensed to produce it.
In addition, apparel giant Liz Claiborne Inc. is seeking licensing partners to do several lines of intimate apparel, including foundations and sleepwear under the Liz Claiborne name.
Stephanie Zernik, vice president and divisional merchandise manager of intimate apparel at Bloomingdale’s, sized up the situation this way:
“You want the hype the [designer] brand brings to the table, and particularly for Bloomingdale’s, the distinctiveness of a big brand is important. I believe there’s room for more designer names in intimates, but it does present a challenge for retailers. There’s definitely a customer out there who wants that designer name, just as she wants it in ready-to-wear. But it comes to a point of what will we carry and who will dominate the business.
“We are not yet at that point where we have to say no,” Zernik continued. “But choices will have to be made with certain non-branded resources. It really all comes down to the product. We’ve always found space and open-to-buy dollars for merchandise that is valid, different from the existing mix.”
As for designer innerwear business, Zernik said, “It continues to be the largest volume producer as a percentage of our total innerwear business. When we present it as a cohesive presence for our customer, it makes it a lot more understandable.”
She further noted that Bloomingdale’s will showcase two additional lines in “soft shops”: sleepwear by Tommy Hilfiger this fall and DKNY underwear for spring 1999. Sleepwear by Ralph Lauren Intimates, to be introduced this fall, will be sold at all Bloomingdale’s units, she said.
Barbara Lipton, vice president and divisional merchandise manager of intimate apparel at Saks Fifth Avenue, said she also feels the designer name business in intimates continues to be strong.
“But it is because of the brand recognition and beautiful product,” she added. “A lot of women are trading up and going for the best-quality merchandise.”
The designer names that are bestsellers at Saks include sleepwear by Natori and robes and sleepwear by Fernando Sanchez, and two sleepwear licensees — Valentino Intimo by Warnaco and Christian Dior by Carole Hochman Designs. Two top-selling European bra labels are La Perla and Chantelle, Lipton said.
“We keep our lines edited and constantly focused. We don’t want to confuse the customer,” she said. “We have a great team of buyers who are very focused, who understand the customer, her headset and how to merchandise the space. That’s why we have such a beautiful floor.”
As for providing space and dollars for new designer labels, Lipton said, “If a new fabulous line came along, it is something we would do. We are open to new designers and new lines. But it would have to be different than the collections we already have. Donna Karan Intimates is a very powerful name for us,” Lipton continued. “We will expand our Donna Karan presentation for fall 1998 and spring 1999. Saks Fifth Avenue wants to be the headquarters for Donna Karan Intimates.”
“Our designer intimates business is alive and well,” said Beverly Rice, senior vice president of fashion merchandising strategy for Jacobson Stores. “We will be featuring Oscar de la Renta sleepwear [produced under license by Carole Hochman Designs] in late July and August. We feel it will be a real shot in the arm for us. And we’ll be carrying Tommy sleepwear for fall. We are very interested in DKNY Intimates, and our team currently is negotiating for DKNY. Everything we have had from Donna Karan Intimates has been a success.”
Rice is introducing an upscale line of bras at Jacobson’s called Jonvive by Wacoal. “It’s expensive, $85 to $100, but it represents the cutting edge of what we want our intimates business to be.” Regarding space, Rice said, “We don’t do shop concepts, just signage, because we don’t have the space. But it works out very well for us.”
Lavelle Olexa, senior vice president of fashion merchandising at Lord & Taylor, said, “It’s a very positive story for us. We have had very strong results with Ralph Lauren Intimates, Calvin Klein Underwear and Donna Karan Intimates. We have found that both basics and fashion are being very well received in those three lines.
“I think the consumer has a high regard for a status name. But it has to be backed up by merchandise that’s well received — ultimately it’s the product that counts,” said Olexa.
She reported that bras by Natori are selling “very well.” However, Natori sleepwear — perhaps one of the early casualties in the pursuit of space — is no longer being sold at Lord & Taylor. It had been sold in the store for many years. Olexa would not elaborate other than to say it was a “merchandising decision.”
Marlin Pollino, assistant buyer of intimate apparel at Jenss, a three-unit specialty chain in Amherst, N.Y., said: “We’ve been selling more-expensive merchandise lately than less-expensive merchandise. We’ve carried robes, loungewear, panties and leisure bras by Donna Karan Intimates for two years. That business has been very steady.”
Because of the success of Karan’s intimates, Jenss will feature Donna Karan legwear in its hosiery departments this fall, she said. In foundations, Pollino noted several “premium” brands are bestsellers: Lejaby, Felina, Vogue Dessous, Chantelle and Wacoal. Jenss will carry the Parisa label this fall, she said.
The power of TV as a promotional tool was underscored by a recent development involving Oprah Winfrey. “We’ve always done a good business with Wacoal, but then Oprah talked about Wacoal bras in one of her talk shows — how well they fit, how well they are constructed,” Pollino said. “You couldn’t believe it. Women started rushing in here. Some couldn’t even pronounce the name Wacoal — they called it ‘wacky.’ But they had to have a Wacoal bra because they saw it on ‘Oprah.”‘