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The Paths to Growth: Know Thy Customer, Get a Niche, Innovate

Achieving growth in an environment as tough as this depends on carving a unique identity with distinctive products and services. Here are some ideas.

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"It’s not chasing after last season’s trends, it’s fresh, new design," said Lundgren. "The combination of consumers being ready to spend and us having fashion-oriented products back is what’s going to make it work for us."

Bendel’s Burstell and his team turned up a new core group of resources in Berlin, Tokyo, Warsaw and Sydney, among other places. "You have to be attuned to popular culture and be a trend-tracker who can divine the cultural mood," said Burstell, whose early interest in vintage resulted in Lair, Tiffany Dubin’s retro boutique on the third floor.

Denise Seegal, president and ceo of JLo by Jennifer Lopez, studies the anatomy of trends. "Snowboarding fundamentally changed the apparel worn for skiing, which changed what’s worn on the streets. That’s what started the baggy pants craze," she said. Seegal’s new buzzword is "fun." Anything that connotes happiness, like the beach, "is going to be more important as we get more serious politically and economically," she said.

3. PUT EGGS IN DIFFERENT BASKETS

Just as the smart investor diversifies his portfolio, smart retailers and manufacturers are diversifying their venues, targeting audiences and price points. Kellwood Co. ceo Hal Upbin is going after women’s sizes and the ethnic market and searching for any new demographic, sociographic or psychographic group. Kellwood recently launched the Lucy Pareda collection at Sears for the Hispanic market and is working on a line of clothing for African-American women. Maternity and clothes for aging consumers are two markets that are still underdeveloped, according to Upbin, who said the company will continue to acquire niche businesses.

Seegal’s strategy for JLo involves selling in various retail categories. "The greatest growth potential is to play across a multichannel distribution strategy," she said. "Everything is now mixed and there’s no channel loyalty. You need to say, ‘I want to own Generation Y, so let me have a multibrand strategy to capture her wherever she shops.’ The key is to stay close to your consumer and understand the shifts in their buying patterns."

4. DARE TO THINK SMALL

If it doesn’t appeal to everyone, it’s not worth selling — or so the conventional thinking goes. But bigger isn’t always necessarily better. When Diane Von Furstenberg’s company expanded in the Seventies, distribution spun out of control and her products turned up in some unappealing places. Now, she prefers to sell a deeper selection of products to fewer stores.
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