A new generation of denim firms are launching upscale lifestyle brand.
By Reena Jana
Updated: 6:47 p.m. CT Jan 22, 2007
You might think that for a young brand, netting $100 million in sales of $100-plus jeans is a sure sign of success. And indeed, labels such as True Religion, Rock & Republic, Citizens of Humanity, and 7 for All Mankind have graced the pages of fashion bibles like Vogue and Elle, and are sold in high-end stores from Saks to Barneys New York.
But for this new generation of fashion startups, "premium"—or $100-plus—jeans are just the springboard for launching upmarket lifestyle brands. Many are entering 2007 by offering expanded lines of clothes, accessories, outerwear, eyewear—even a hotel—that they hope will boost customer loyalty and fully establish them as multicategory brands.
A new status symbol
The success of these ambitious young jeans makers, who have seen sales double or triple in the past year, stands in particular contrast to the fate of the well-known traditional jeans maker, Gap, which is floundering with falling sales and talk of a buyout. In fewer than 10 years, these companies have effectively — and collectively — established a new category that's not quite luxury, and not quite downmarket weekend wear, but something in between.
"Consumers now see blue jeans as an investment and will pay more for them. They're a staple in a person's work wardrobe. Steve Jobs of Apple is always photographed wearing jeans," says James Sullivan, author of Jeans: A Cultural History of an American Icon (Gotham Books, 2006).
Sales of premium denim provide proof of jeans' popularity. True Religion, for example, saw net sales increase 41.8%, to $109.3 million, in the nine-month period ending Sept. 30, 2006, up from $77.1 million in the same period the year before. These are striking figures, especially compared to those from the company's first year in business. True Religion brought in $2 million in 2003.
Lifestyle branding
The company recently announced licensing agreements for scarves, footwear, and outerwear, making clear its intention to become a global lifestyle brand. And Rock & Republic, which saw estimated growth of 270% in 2006 from its $100 million sales in 2005, launched an accessories line of men's and women's shoes, bags, and eyewear at the end of last year. The company expects to expand into cosmetics and even a chic Rock &Republic boutique hotel in 2007.
"Adding accessories and clothing to build a lifestyle brand can work for those jeans companies with a strong customer following," observes Marshal Cohen, a retail analyst with market researcher NPD Group. "To be a one-trick pony in today's world is risky and limits growth, which every company in any market is judged on. But the brand has to be strong, otherwise the expansion is capricious."
And although the company is going downmarket, it is also following the lifestyle trend among its competitors by launching outerwear, sweaters, shirts, and other items targeted to a more mass-market audience.
Copyright © 2007 The McGraw-Hill Companies Inc. All rights reserved.
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Since the past couple of years, denim firms made their labels grace the pages of Vogue and Elle, many are entering 2007 expanding their lines of clothing, accessories, outerwear and even eyewear. Consumers now see blue jeans as an investment and will pay more for them. True Religion recently announced licensing agreements for scarves, footwear and outerwear so that consumers can see its intentions of becoming a global lifestyle brand.
-Vivian Yu