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06-16 Top 50 0709 COVER STORY t’s fair to say that no company went Iuntouched during the past year of sweeping changes and economic crises. Still, sudden collapse of the market in fall 2008 did not impact all equally. Some, already struggling, were driven to declare bankruptcy and in some cases completely remove their shingles: Mervyn’s, Filene’s Basement, S&K Famous Brands and Gottschalks are first to come to mind. Yet others continued to rack up sales and profits despite the collective boom of wallets shutting. The Buckle, for example, shows no signs of letting up. In short, each apparel company on the Top 50 list has its own story to tell, but common themes will out: Apparel companies across the board are in many highly populated regions experiencing triple-digit sales working diligently to generate strong of the country have opened up new increases. This will continue to be a cash flow, pay down debt by tightly possibilities for retailers looking to focus, along with finding new and managing inventory and expenditures expand. interesting ways to engage the and reduce overall company cost consumer. One observation on this structure. Topping the list of priorities Collectively, retailers are expected to subject: More companies than ever — is a focus on streamlining brands open 4,000 stores in the United States and not just the youth-oriented brands while improving merchandise this year and close 3,600 (according to — are going social. Even Perry Ellis assortments and allocation. the CoStar Group), while a heady mix wants to be on your Facebook page. of plans for international expansion Apparel companies continue to close include store openings across Europe, Starting with True Religion, Apparel’s under-performing stores and store Asia and the Middle East. Top 50 report explores some of the concepts — just last month, strategies that landed each on the list. Abercrombie & Fitch announced plans E-commerce has been a virtually to shutter its Ruehl stores — while universal bright spot of growth and plunging real estate and store closings excitement, with many companies 6 JULY 2009 • www.apparelmag.com While the economy is taking its toll on the industry, it’s clear that when the dust clears, some apparel players will emerge stronger than ever before. #1 True Religion Topping Apparel’s list for the second year in a row, this premium denim brand continues to find favor with its customers, who even in this tough economy are willing to shell out big bucks for the company’s distinctive stylings. The average sales prices in the company’s full-price retail stores in 2008? Those would be $207 (women’s products) $202 (men’s products) and $106 (kid’s products), with some of its best sellers made with the Super Big-T stitch, a dis- tinctive thread-stitch process patented by the com- pany in 2007. Other highlights of 2008 are the newly introduced jean collections “XXX” and “Stealth,” while “Disco” received a makeover with gold crystals. True Religion’s Consumer Direct segment generated net sales of $75.3 million, or 27.9 percent of total net sales. At the end of 2008 the company operated 42 branded retail stores, and expects to add 25 this year. Consumers continue to shell out big bucks for True Religion’s distinctive stylings. #2 The Buckle #3 lululemon athletica Growing from 222 stores in 1999 to 387 stores in 39 With a lengthy manifesto that includes statements ranging from states at the end of 2008, this retailer of casual the instructive “dance, sing, floss and travel” to the philosophical apparel, based in … wait for it … Kearney, “jealousy works the opposite way you want it to,” this yoga- Nebraska, has thrived in a retail environment domi- inspired technical athletic apparel brand has grown in just over nated by much larger, vertical operations. The 10 years from a single storefront in Vancouver to more than 113 Buckle’s successful formula includes selling a combi- locations and what might be described as a cult following that nation of national brands such as Big Star, MEK, stems from its community-based, grassroots approach to brand Affliction, Sinful, Lucky Brand Dungarees, Silver, building, and from its focus on women. (It also sells men’s Hurley, Billabong, Fossil, Quiksilver/Roxy, Miss Me, apparel.) Partnerships with local fitness practitioners, or “ambas- 7 Diamonds, OBEY and Ed Hardy, as well as its own sadors,” in lululemon lingo, drive customers to the retailer, private label, BKE, which comprised 28 percent of its (ambassadors get free swag and publicity for their classes), while sales in 2008. Known for extreme personalized in-store community boards and classes make each store a truly attention to its customers, The Buckle educates each unique place, and a magnet for those seeking a lifestyle of health, salesperson on product details and how to create a fun, personal achievement — and $54 tanks. Each retail loca- complete look for the customer by helping each tion’s dedicated community coordinator organizes fitness or phil- individual find the best fit and presenting merchan- anthropic events in the community, while “educators” are given dise as coordinating outfits. The company reported exhaustive training on the technical and design aspects of each earnings up 44 percent in the first quarter 2009. product, and are coached to develop a personal connection with each “guest.” www.apparelmag.com • JULY 2009 7 THE TOP 50 #4 Urban Outfitters #5 Guess? With an eclectic mix of apparel, accessories and home items, Already one of fashion’s most well-known brands, Guess’ the company says its core strategy is to provide unified store near-ubiquitous presence is poised to expand as the com- environments that establish emotional bonds with the cus- pany eyes Europe and Asia as key growth priorities. The tomer. If its web site is any indicator, that mission has crossed company opened 168 international stores in all brand con- to the online environment where the use of social media is in cepts combined in fiscal 2009 with its international licensees full play, with blogs touching on everything from art and music as key strategic partners, and has plans to open approxi- to tech and film around the globe. Somewhere between the mately 126 new stores in fiscal 2010 outside of the United Frank Lloyd Wright legos and the Sticky Fingers bakery in States and Canada. The company’s European segment, Washington, DC is an Urban Outfitters sensibility that cus- which includes both wholesale and retail operations in tomers are clearly tapping into. April 2008 saw the company Europe and the Middle East, generated 34.3 percent of net add to its Urban Outfitters, Anthropologie and Free People revenues. Guess credits its global sourcing and product retail banners with the launch of the first “greenhouse- development platform for its strategic role in significantly inspired” Terrain store, offering lifestyle home and garden reducing costs and lead times. In e-commerce, the com- products, antiques, live plants and flowers. The company also pany’s seven brand web sites are enhancing brand identity — launched Liefsdottir, a wholesale division for the Anthropolo- and also racking up sales. Fiscal 2009 saw the combined sites gie brand that is also sold through luxury department stores continue to grow, generating net sales in excess of the top including Nordstrom and Neiman Marcus. retail GUESS? store in the chain. #6 Nike The Nike Free shoe offers a The company continues to just do it, driving competitors to seek out barefoot experience coupled with product niches to avoid head-on competition with this athletic-wear the protection and traction of a lightweight performance shoe. behemoth. As the largest company on the Top 50 with sales approach- Inset: Nike Shox offer impact ing $19 billion, Nike continues to grow and innovate. 2008 saw the protection. 100-year anniversary and best year ever of the Converse brand, and record growth for the Hurley and Cole Haan brands and the Nike GOLF portfolio. The company sold its Starter and Bauer businesses, and acquired Umbro. Ever serious about its role as a corpo- rate citizen, Nike launched The Human Race, the world’s biggest single running event in history, raising funds along the way, and expanded the recent debut of Considered Design, products that combine sustain- able principles with innovations in sport, to include all six of the com- pany’s key categories: running, basketball, soccer, men’s training, women’s training and sportswear. #7 Gymboree #8 bebe Stores Fiscal 2008 marks a milestone event in the company’s 30+ While profits have started to mimic its apparel fit models year history, with revenues reaching the $1 billion plateau. (extremely slim) since bebe’s fiscal year end in July 2008 (profit Acknowledging challenging times ahead, CEO Matthew margins for the nine months and three months ending in April McCauley says Gymboree is well positioned for long-term 2009 were 2.7% and -4.0%, respectively), the company’s commit- growth with a cash balance of $140 million and no long- ment to updating its technology infrastructure should position it term debt. Churning out season after season of truly well for future growth. Last year saw the culmination of a three- adorable kids’ clothes doesn’t hurt either. The company year information systems and technology strategic plan with the has also planned carefully, opting for pay cuts for corpo- implementation of a product lifecycle management system to its rate and distribution center personnel and the elimination supply chain, fully integrated with its production system. Previous of the cash bonus program for senior management over investments focused on infrastructure upgrades, a new production layoffs. Capitalizing on the soft real estate market, the management system, upgraded planning and allocation systems company plans to expand with 75 stores, focusing heavily and the new clubbebe loyalty program.
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