Saks Fifth Avenue stores, Old Navy jeans score with new audiences.
The retail world, in particular, has seen big names stumble trying to reinvent themselves and reach new consumers. Among the designer flops was Armani A/X's stable of overpriced jeans, Liz Claiborne's now-defunct First Issue line and Anne Taylor's disappointing A-Loft, dubbed by one industry watcher as a 'souffle that never rose."
More successful have been close-in concepts, like Saks Off Fifth, with nearly 50 stores carrying discounted merchandise to outlets and suburban centers - there's even a branch for tourists in Niagara Falls. Jeans lines from J.C. Penney's Arizona to Sears" Canyon River Blues have also thrived via instant distribution. A common thread among the winners has been a willihgness to position their brands not just on price, but with a dash of attitude, wrapped up in savvy marketing. "Instead of selling on the cheap, they're giving their brands panache," said Alan Millstein, editor of the Fashion Network Report.
Gap Inc.'s fledgling Old Navy brand is one of its industry's few standouts and is an example of learning from past mistakes. As Gap ran out of new markets to conquer in the early "90s, it cut prices on jeans and black T-shirts and watched as everyone else followed suit. It then served up a fashion line that strayed too far from its core basics. Shoppers apparently wanted value-priced merchandise without the fuss. At the same time, the company realized that some consumers were tired of malls and were content to shop in strip centers typically devoid of real fashion options. So it took Old Navy to outlying markets and sprinkled a bit of whimsy into the down-and-dirty world of discounting, filling its 150-plus stores with unique fixtures and a merchandising mix that displays funky accessories alongside jeans and sweaters. Some stores host disc jockeys and an occasional theater troupe.
Recognizing that consumers may have different interpretations of value, Old Navy also segmented its jeans line along three price tiers: Old Red, starting at $17.50, targets pure price shoppers, followed by Old Navy basics at $22 and fashion lines like the Star Series carpenter's jean at $26 to $29. Print ads, created in-house, carry the tagline, 'shopping is fun again." TV, outdoor and direct mail are used in select markets.
Old Navy bills itself as a one-stop shop covering babies to grandparents. "We want people to know they can come in and buy an outfit and not go broke," said Old Navy vp of marketing Richard Crisman.
To herald its spring arrival in New York City's former department store district, Old Navy sold branded chocolate bars for 50 cents along with a contest offering a $25,000 grand prize. "We wanted people to know that something delicious didn't have to cost so much. It was a way to get the brand into people's hands," Crisman said.
Old Navy will soon learn that hand is increasingly in demand. Fashion names from New York to Milan are racing to develop private-label shops to cash in on the move to casual wear. Up next: Ralph Lauren, expected to open eight Polo Jean shops within the next year.
Though they might disguise themselves as discounters, these fashion upstarts still provide manufacturers with full margins, even if some prices get marked down. "They're giving the consumer the illusion of great products at great prices, but it's all sleight of hand," said Millstein. - K.B.
Copyright ASM Communications Inc., 1996 ALL RIGHTS RESERVED
SCROLL SuperBrands 97