Most Recent Articles In Retail Features
Latest Retail Features Articles
- Desigual to Focus Growth in 2015 in North America
- Mad Over You Launches T-Shirts to Make a Difference
- San Francisco Passes Retail Schedules Rule
More Articles By
Specialty store partnerships can be a good option for better lines, but few cater to moderate resources, analysts noted. And, as most traditional department stores exit the moderate business, lower-priced lines are left with few partnerships, most notably Kohl's, which does an increasing amount of private label and exclusive products.
"When the stores are going private label, we have to go private label," said Jamie Gorman, president of the moderate resource Only Nine, half of whose business is now in private label, up from about 30 percent only last year. "You can't put all your eggs in one basket."
Across the board, vendors are serving as a private label resource, gaining accounts they may have filled with branded products in a former life.
"We secure retail partners by giving them design development that is different from what they are developing on their own brands, product they can't do themselves," said Joel Ratner, president of Spex Clothing Co. Inc., which manufacturers the moderate line Lemon Grass. "As a small company, we really study what they do in their own private label brands and supplement that."
But moderate manufacturing opportunities even in private label may soon be a memory, according to Allan Ellinger, senior managing director at Marketing Management Group.
"Vendors have to become less dependent on their private label businesses and develop branded businesses where possible, because eventually all retailers will cut out as many vendors as possible," Ellinger said. "A lot of vendors are one phone call away from a disaster. If a vendor has a large concentration with a retailer, and if a client decides to go direct, how does that vendor make up for that loss?"
Ellinger recommends trading today's version of diversification — between branded and private label offerings — with diversity in marketing offerings and distribution channels. For companies with moderate brands, he recommends developing or acquiring a higher-end branded business.
Rousso Apparel Group has followed that playbook. The $200 million, predominately moderate firm recently launched Naturally Organic World, a better-priced sportswear collection that fills what Rousso sees as a high-demand, underserved niche.
"One of our biggest single focuses is we keep our business diverse," said Amy Taub Kahn, president of Rousso Apparel Group. "Private label has become a real focus for us, and we are building upon our branded business with better lines that now make up 22 percent of our sales and give us better margins. Diversity gives us the ability to become much more of a well-rounded partner for retailers and to be beholden to nobody."