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Fashion’s New Mass: Oscar, J.C. Penney Said in Talks

J.C. Penney and Oscar de la Renta are said to be in talks about bringing the designer’s cachet to the chain through the launch of a new label.

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Will Oscar de la Renta products soon hang in Penney’s

Will Oscar de la Renta products soon hang in Penney’s?

Photo By WWD Staff

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NEW YORK — The rush to mass may soon have two new partners —J.C. Penney Co. and Oscar de la Renta.

Sources said Tuesday that the designer, whose signature coats, dresses and suits routinely retail for four figures and beyond, has held serious talks with Penney’s about the possibility of launching a new label at the chain.

“It is something he is considering,” a close source said, “but the truth is, he doesn’t have any contractual arrangement with anyone at this point.”

While negotiations could take another season to conclude and could turn into something else or fall apart entirely, sources said the parties involved will present a concept for an Oscar de la Renta spinoff within a matter of weeks in the moderate-to-better price zone for spring 2004 retailing. It would have a new, as yet undecided, name that would be positioned so that it does not compete with or compare to de la Renta’s existing license for bridge sportswear under the Oscar by Oscar de la Renta label.

Adding a de la Renta concept to the store would be a major coup for Penney’s, which has been striving to recreate its image as a fashion-oriented, moderate-priced department store for the masses with the introduction of new and exclusive labels over the past year. In February, the store launched its exclusive Bisou Bisou contemporary collection, designed by Michele Bohbot, in about half of its 1,048 stores, and the next month announced an exclusive rollout of a plus-size collection called True Beauty by Emme.

The de la Renta concept is said to be priced a tad higher than the basic moderate zone, playing off the prestige of the designer’s $600 million fashion empire, although it could not be immediately learned just what type of customer Penney’s has in mind or whether flamenco skirts and ruffled blouses would really translate to the $100-and-under crowd.

But one thing for certain is that under the strategy led by Allen Questrom, chairman and chief executive of the Penney’s corporation, and Vanessa Castagna, chairman and ceo of stores, catalog and Internet, there’s no intention of repeating the company’s designer albatross of the Eighties, when the store failed to drive sales with watered-down Halston and Mary McFadden collections.
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In December, when Questrom and Castagna outlined their plan to bring exclusive lines into the stores, they indicated that one of their goals is to bring the store into the competitive world of fast-fashion, currently dominated by H&M and Zara, and is putting a particular focus on the contemporary category. At the time the deal was announced with Bisou Bisou, which pulled its merchandise from stores like Nordstrom and Bloomingdale’s to sole distribution at Penney’s, the store acknowledged it would be looking for other labels to modernize its other top in-house brands: St. John’s Bay, Stafford, Worthington, Delicates and J.C. Penney Home Collection.

The exclusive deal for True Beauty by Emme was announced in February and came with an option to renew its contract with the supplier, Kellwood Co., after a year. Kellwood is a major supplier to Penney’s, selling its Sag Harbor, Koret, Vintage Blue Bottoms and Energy labels to the chain, leading to some speculation that de la Renta’s project could be connected to the moderate apparel specialist. Kellwood also has produced bras and panties under the Oscar de la Renta name under license through its Biflex division since last year.

However, insiders insisted as far as the development of a new product was concerned, “There’s nothing concrete about it. We haven’t answered, ‘Who is the manufacturer? What is the distribution?’”

Some also questioned what would be the appeal of such a deal to the designer. Noting how quickly deals were struck with Bisou Bisou, which was in financial trouble, and with Emme, they said the uncertain and slow talks with de la Renta indicate the conclusion of such a designer-to-mass collaboration might just be as unlikely to ever happen.

On the other hand, the designer industry seems to have suddenly discovered gold in the mass and better zones. Marc Jacobs said he wants to go there and hopes to have a licensee for better-price sportswear lined up within a year, while Calvin Klein Inc. is expected to announce a women’s licensee for a new better concept within a month, following its acquisition by Phillips-Van Heusen in February. Kellwood also recently launched an Izod women’s collection, and Perry Ellis, a new introduction in the category, is gaining momentum with the addition of Patrick Robinson as its designer.
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A new venture also might make financial sense, as de la Renta has resisted many attempts to sell his firm in recent years, refusing to yield control of the 38-year-old brand. His licensing business is quite lucrative and well organized, and the designer could stand to reap huge rewards from royalties if a Penney’s deal should go through, considering the chain’s national presence.

For instance, Bisou Bisou was projected to become a $500 million business within three to five years at Penney’s as it expands into other categories. De la Renta’s name is more broadly known — and that’s outside of the teen- to twenties-oriented contemporary category — and could potentially have a bigger impact in the mass channel. Of course, the companies would have to keep a tight control on image to avoid the pitfalls that have historically befallen designer brands that have been licensed out into too many categories.