COVER STORY n another year of uncertainty and Ieconomic hardship, the companies that made Apparel’s Top 50 list of most profitable companies were all, unlike last year’s, actually profitable.
Given the state of the economy, the success of these top 50 is testimony to their flexibility and innovation, but it’s also the result of quick and often painful cuts to their organizations. The past year saw a major shift toward right-sizing everything from retail store locations and inventory to human resources and vendors, with companies adjusting to a contracting retail environment that despite some recent gains continues to be plagued by the effects of high unemployment, rising raw materials costs and lagging consumer confidence.
As might be expected, many of the industry’s best performers held strong, but as always, the jostling created
Striking a fine balance Wet Seal’s developments in mobile e-commerce and social media have between caution and tapped directly into its digitally savvy customer base, kicking up sales and aggression, this year’s Apparel Top 50 companies interest in the brand. are carefully managing costs and inventories while continuing to invest in their strongest brands and Buckle’s extreme focus on making the customer happy no doubt gets businesses, going social and expanding internationally, some of the credit for its record- setting year that included a 21.9 to drive growth and gains in market share. percent increase in earnings.
8 JULY 2010 • www.apparelmag.com some rising stars and some that fell out of the rankings entirely. In the latter category were No. 1 The Wet Seal dELiA*s, Hampshire Group, Destination It certainly has an air redolent with “turnaround,” but the specialty Maternity and New York & Co. retailer’s No. 1 positioning on the Top 50 is nonetheless a bit deceiving: the 209 percent spike to its net income and the soaring profitability Charlotte Russe, bought by private equity firm numbers that it produced were the result of the reversal of a valuation Advent International, exits the Top 50, as does allowance against net deferred tax assets, to the tune of $71.3 million. Tween Brands, bought by Dress Barn. Still, the retailer of fashion apparel to teen girls is one to watch: Wet Seal’s phenomenal developments in mobile e-commerce and social media have tapped directly into its digitally savvy customer base (see The awards for the biggest leaps upward go to Apparel, April 2010, for more on the company’s mobile strategy), while Wet Seal (up 24 places to No. 1), J. Crew (up recent focus on improved assortments and more fashion items is show- 19 places to No. 12) and G-III (up 17 places to ing results, with first quarter 2010 comp-store sales up 1.5 percent at No. 33), while Chico’s, Phillips-Van Heusen, Wet Seal and 4.8 percent at Arden B over the same period last year. Limited Brands, The Warnaco Group and The company also deserves kudos for maintaining a strong cash position Carter’s all moved up in the rankings by at ($170 million) and a low level of debt. least 10 places.
It’s a tough time to be a retailer, but it’s also No. 2 an exciting time. Particularly for companies True Religion Apparel with cash in the bank and little or no debt, I used to think “True Religion” was about praying that you’d have some opportunities abound, and we find many of our money left over after purchasing a pair of the brand’s jeans, but now it’s Top 50 seeking new markets for their brands become eminently clear that the gods of consumerism are squarely on in Asia, Europe, Brazil and the Middle East, or the side of this phenomenally and consistently profitable company. seeking to expand their portfolios through Maybe it’s the huge, thick thread stitches, which impart a unique look to the denim while adding to the garment’s strength. But whether it’s strategic acquisitions. Technology, too, the fit, the distinctive styling, the store experience, the brand cachet, or continues to open possibilities like never some combination of it all, the brand continues to please — in depart- before, as apparel companies implement ever ment stores and boutiques and across 50 countries. This year True Reli- more capable systems to refine merchandise gion continues to spread the Word, opening its first store in the United planning and allocation, or to track consumer Kingdom last month with a location in London’s Covent Garden shop- behavior in real time. ping district, to be followed by stores in Tokyo and Toronto.
Perhaps most importantly, the accelerated pace of technology development and adoption has wrought a sea change in the way people, No. 3 The Buckle and businesses, communicate with each You might say the buckle stops here, as the 412-store (and growing) other. As companies try to truly engage the Nebraska-based specialty retailer locked down another record-setting consumer through loyalty programs, daily year on many fronts, including a 13.4 percent increase in sales over fis- blogs, mobile commerce and social media, the cal 2008 and a 21.9 percent increase in earnings. Composing 43 percent whole idea of what it means to shop is of total sales, denim remains the cornerstone of the business, with sales undergoing a drastic transformation. in this category increasing for the 10th year in a row (by 17.5 percent) with record-level sales of 4.3 million pairs of jeans. No doubt Buckle’s extreme focus on creating a positive shopper experience gets a lot of the In recognition of the way in which the virtual credit. Its new “Get Fitted” program offers customers the opportunity world continues to transform the global retail to schedule personal shopping appointments with its denim specialists; scene, Apparel for the first time this year also free hemming, complimentary gift wrapping and layaway services don’t has ranked its Top 50 based on their hurt either, a fact not lost respective number of Facebook fans on the company’s 20 dis- and Twitter followers. Is there a trict managers, who aver- correlation between profitability and age 21 years with the engagement in social media? You company. Sales on can find the answer online this month Buckle.com were up 45 in “features” at apparelmag.com. percent to $52.3 million, spurring expansion of its And in the following pages, starting online fulfillment center, with Wet Seal, Apparel’s Top 50 while the company also report explores some of the broke ground on a new strategies that led each firm to DC equipped to serve profitability. more than 600 stores.
www.apparelmag.com • JULY 2010 9 THE TOP 50
No. 4 lululemon athletica Rounding out the fiscal year with the launch of a youth-focused brand, ivivva athletica, the Vancouver-based retailer of yoga-inspired technical apparel continues to thrive by bringing its grassroots, community-based approach to its mission of providing people with the com- ponents needed to live a longer, healthier and more fun life. Its 115 lululemon stores offer a distinctive retail — and workplace — experience of free in-store yoga classes and well- trained “educators” who develop personal connections with each “guest.” It’s an environ- ment that fosters passion, personal enrichment and $1,318-per-square-foot average comp-store sales (in corporate-owned stores) — with virtually no advertising. Ever ready with an aphorism (“the pursuit of happiness is the source of all unhappiness”), lululemon doesn’t let science take a backseat to philosophy as it remains heavily focused on differenti- ation through technology-enhanced fabrics and performance features. Look out for new categories such as bags, undergarments and outerwear, expansion of its men’s business and a greater presence outside North America.
Lululemon’s 115 stores aren’t just retail venues, they’re community hot spots that bring people together for yoga, friendship and personal enrichment.
No. 5 Guess? No. 6 Urban Outfitters Guess who continues to perform as if they’d never even heard If you’re a fan of the lifestyle specialty retailer you’ve probably the word “recession?” You got it. Known for a distinctive, fun observed the company’s leadership in creating two-way con- and sexy fusion of American lifestyle with European fashion versation — and inspiration — with its customers through sensibility, Guess? achieved record revenues and earnings — social media, blogs and regular online updates, and you’re for the seventh consecutive year — quickly streamlining oper- likely familiar with its highly visible store locations, operating ations, reducing inventory exposure and preserving capital in under the Urban Outfitters, Anthropologie, Free People and response to the economic downturn. Its North American Terrain brands, where creativity of store design and visual pre- retail business was the most significant contributor to earn- sentation complement an attractive assortment of merchan- ings growth in fiscal 2010, with operating earnings up 42 per- dise. (Who can help but take home a meowing cat keychain cent. The year also saw the rebranding of its GUESS? by whose eyes double as a flashlight? Not me.) But behind the MARCIANO concept and the launch of the PULSE loyalty scenes the company has been busy putting technology in ser- program in its G by GUESS? stores, which resulted in expan- vice of its successful enterprise, completing construction on a sion of its loyalty membership to 2.8 million customers. 100,000-square-foot addition to its company-owned DC in Guess? continued to expand its sales and retail stores globally, Lancaster County, PA, and beginning a warehousing software opening 81 free-standing stores in Europe along with its part- implementation for its retail segment there. It also successfully ners, and recording 26 percent revenue growth in its South implemented warehousing software for its wholesale segment Korean business. Expect the trend to continue, with 52 new at its Trenton, SC, fulfillment center and began work on an stores planned in North America in 2011, and $1 billion in order management system to improve online and in-store cus- sales expected in its European business within three years. tomer service.
No. 7 Aeropostale Climbing from spot No. 13, the company continues on a tear, with same-store sales up 10 percent, net sales up 18 percent, operating margins in excess of 17 percent and e-commerce net sales up 48 percent to $129 million. Maybe it’s true what comes around goes around: the company puts a premium on giving, such as through its Teens for Jeans program, which this year delivered 625,000 pairs of jeans to homeless U.S. and Canadian teens, and victims of the Haiti earthquake. “Philanthropy is important; nobody ever thinks their life will go in the wrong direction,” says CEO Julian Geiger. This year Aeropostale will implement an order optimization solu- tion, target the cross-channel shopper through social media and other technologies, and expand its real estate, including to two new Aeropostale brings its fantastically successful retail formula to high-profile locations in New York City, at Herald Square and NYC’s Times Square and Herald Square this year. Times Square.
10 JULY 2010 • www.apparelmag.com THE TOP 50
No. 8 Gymboree In a small footprint it squeezes in a TV and seating area to distract the kids while mom shops. It’s that attention to detail, combined with winsome designs on its apparel and expansion of assortments in its boys’ business, Play & Music classes, the Gymbucks loyalty program, and the highly crafted apparel in its 120 Janie and Jack stores, that keeps customers coming back. In his letter to shareholders, chairman and CEO Matthew McCauley credits every individual at the company with its success during tough times — for sacrificing compensation while still delivering unique product, for delivering excellent customer service and opening 72 new stores — resulting in operating income up by 10 percent. Crazy 8, its new concept focused on offering fashion at compelling values, exceeded financial expectations. Up next, its greatest expansion opportunity: international growth, including in Canada and Australia. In addition to opening wholly-owned stores globally, Gymboree signed its first retail franchise agreement with Azadea Group Holding, which will take the Gymboree brand into the Middle East this year.
No. 9 Polo Ralph Lauren Despite an overall decline in revenues, the company turned in a gross profit percentage of 58.2 per- cent primarily due to supply chain cost savings initiatives, improved inventory management and decreased promotional activity, particularly across its global Retail businesses and its European Wholesale operations. There was also growth in its Japanese concessions-based business dri- ven by the newly acquired Polo-branded apparel business in the Asia-Pacific region and the children’s wear and golf businesses in Japan. Still, it’s difficult to exaggerate the global reach of the empire built by Ralph Lauren. In just the past five years, acquisitions and organic growth have pushed sales to $4.979 billion from $3.746 billion, with business diversified by just about every channel of dis- tribution, price point, target consumer and geography possible. Ralph Lauren-branded merchandise is available at approximately 9,000 retail locations worldwide; the company also sells directly to the con- sumer via 350 full-price and factory retail stores, 281 concessions-based shop-within-shops and its websites, RalphLauren.com and Rugby.com. The empire built by Ralph Lauren continues to expand. Pictured here is the Classic-Fit Big Pony Polo.
No. 10 JoS. A. Bank No. 11 Maidenform Brands How does a business selling men’s pro- Navigating sweeping changes to the intimate fessional apparel manage to wow Wall apparel industry over the past decade — the explo- Street during a time when unemploy- sion of shapewear, consolidation at retail, growth in ment is through the roof? By responding the mass-merchant channel and competition from to the economic downturn with products established retailers’ expanding into intimate apparel and promotions that serve its customers’ with new lingerie store concepts, such as American needs. While other companies were bat- Eagle’s aerie and Chico’s Soma — Maidenform tening down the hatches, JoS. A. Bank increased net sales from $382.2 million in 2005 to made headlines by issuing a “risk free” $466.3 million in 2009, and the marketer of brands suit promotion just one week after the such as Lilyette, Flexees and Control It! pushes for- bottom fell out of the stock market in ward with five strategies for branded organic growth: March 2009, promising a full refund to 1) expand its shapewear business, (2009 revenues in any customer who bought a suit and this category were $139.3 million) including through then lost his job within four months of this year’s launch of Maidenform At Home, part the purchase — and let the customer demonstration party, part educational experience; 2) keep the suit! Other aggressive offers expand the mass merchant channel; 3) grow interna- Aggressive promotions kept included a buy-one-get-two-free pro- tional business (which currently represents less than JoS. A. Bank customers motion. That’s hard to turn down, good 10 percent of sales); 4) drive growth in its newly coming in despite the rough economy. times or bad, and president and CEO R. launched Donna Karan and DKNY licensed collec- Neal Black says the discounting will con- tions; and 5) develop new business, including its tinue as long as necessary. The Hampstead, MD, retailer also new Maidenform Charmed junior collection, set to relaunched its website (working with interactive agency Rosetta to launch later this year, a new website and sales kiosks install IBM WebSphere Commerce software as the platform), opened at high-traffic malls. new stores, started a tuxedo rental business, and announced the launch of a factory store rollout, to begin with five stores in fiscal 2010.
www.apparelmag.com • JULY 2010 11 A ranking of U.S. publicly traded apparel companies with at least $100M+ THE TOP in annual sales by profit margins for their most recent fiscal years. SALES NET INCOME %% % Profit Profit Last Most % Most Change Margin, Margin, 2010 Year’s Recent Previous Change Recent Previous Net Most Previous RANK Rank Company50 FY FY FY Sales FY FY Income Recent FY FY 1 25 Wet Seal Jan. $560.9 $593.0 (5.41) $93.4 $30.2 209.27 16.65 5.09 2 1 True Religion Apparel Dec. $311.0 $270.0 15.19 $47.3 $44.4 6.53 15.21 16.44 3 2 The Buckle Jan. $898.3 $792.0 13.42 $127.3 $104.4 21.93 14.17 13.18 4 3 lululemon athletica Feb. $452.9 $353.5 28.12 $58.3 $39.4 47.97 12.87 11.15 5 5 Guess? Jan. $2,128.5 $2,093.4 1.68 $246.3 $215.0 14.56 11.57 10.27 6 4 Urban Outfitters Jan. $1,937.8 $1,834.6 5.63 $219.9 $199.4 10.28 11.35 10.87 7 13 Aeropostale Jan. $2,230.1 $1,885.5 18.28 $229.5 $149.4 53.61 10.29 7.92 8 7 Gymboree Jan. $1,014.9 $1,000.7 1.42 $101.9 $93.5 8.98 10.04 9.34 9 11 Polo Ralph Lauren Mar. $4,978.5 $5,018.9 (0.80) $479.5 $406.0 18.10 9.63 8.09 10 10 JoS. A. Bank Jan. $770.3 $695.9 10.69 $71.2 $58.4 21.92 9.24 8.39 11 20 Maidenform Brands Jan. $466.3 $413.5 12.77 $37.0 $24.7 49.80 7.93 5.97 12 31 J. Crew Jan. $1,578.0 $1,428.0 10.50 $123.4 $54.1 128.10 7.82 3.79 13 17 Gap Jan. $14,197.0 $14,526.0 (2.26) $1,102.0 $967.0 13.96 7.76 6.66 14 6 Nike May $19,176.0 $18,627.0 2.95 $1,486.7 $1,883.4 (21.06) 7.75 10.11 15 18 Volcom Dec. $280.6 $334.3 (16.06) $21.7 $21.7 0.00 7.73 6.49 16 21 UniFirst Aug. $1,013.4 $1,023.2 (0.96) $75.9 $61.0 24.43 7.49 5.96 17 27 Carter’s Jan. $1,589.7 $1,494.5 6.37 $115.6 $77.9 48.40 7.27 5.21 18 32 Phillips-Van Heusen Jan. $2,398.7 $2,491.9 (3.74) $161.9 $91.8 76.36 6.75 3.68 19 14 VF Jan. $7,220.3 $7,642.6 (5.53) $461.3 $602.7 (23.46) 6.39 7.89 20 9 Cintas May $3,774.7 $3,937.9 (4.14) $226.4 $335.4 (32.50) 6.00 8.52 21 19 American Eagle Outfitters Jan. $2,990.5 $2,988.9 0.05 $169.0 $179.1 (5.64) 5.65 5.99 22 22 Under Armour Dec. $856.4 $725.2 18.09 $46.8 $38.2 22.51 5.46 5.27 23 16 Columbia Sportswear Dec. $1,244.0 $1,317.8 (5.60) $67.0 $95.1 (29.55) 5.39 7.22 24 26 The Children’s Place Jan. $1,643.6 $1,630.3 0.82 $88.4 $82.4 7.28 5.38 5.05 25 28 Nordstrom Jan. $8,258.0 $8,272.0 (0.17) $441.0 $401.0 9.98 5.34 4.85 26 39 Limited Brands Jan. $8,632.0 $9,043.0 (4.54) $448.0 $220.0 103.64 5.19 2.43 27 30 Cato Jan. $884.0 $857.7 3.07 $45.8 $33.6 36.31 5.18 3.92 28 40 The Warnaco Group Jan. $2,019.6 $2,062.8 (2.09) $96.0 $47.3 102.96 4.75 2.29 29 24 Dress Barn July $1,494.2 $1,444.2 3.46 $69.7 $74.1 (5.94) 4.66 5.13 30 34 Timberland Dec. $1,285.9 $1,364.6 (5.77) $56.6 $42.9 31.93 4.40 3.14 31 New rue21 Jan. $525.6 $391.4 34.29 $22.0 $12.6 74.60 4.19 3.22 32 46 Chico’s FAS Jan. $1,713.2 $1,582.4 8.27 $69.7 ($19.1) 464.92 4.07 (1.21) 33 50 G-III Apparel Group Jan. $800.9 $711.1 12.63 $31.7 ($14.0) 326.43 3.96 (1.97) 34 23 Levi Strauss Nov. $4,105.8 $4,400.9 (6.71) $151.9 $229.3 (33.75) 3.70 5.21 35 33 Citi Trends Jan. $551.9 $488.2 13.05 $19.7 $17.4 13.22 3.57 3.56 36 36 Men’s Wearhouse Jan. $1,909.6 $1,972.4 (3.18) $45.5 $58.8 (22.62) 2.38 2.98 37 29 Zumiez Jan. $407.6 $408.7 (0.27) $9.1 $17.2 (47.09) 2.23 4.21 38 8 bebe Stores July $603.0 $687.6 (12.30) $12.6 $63.1 (80.03) 2.09 9.18 39 New Stage Stores Jan. $1,431.9 $1,515.8 (5.54) $28.7 ($65.5) 143.82 2.00 (4.32) 40 42 Superior Uniform Group Dec. $102.8 $123.8 (16.96) $2.0 $2.1 (4.76) 1.95 1.70 41 New Stein Mart Jan. $1,219.1 $1,326.6 (8.10) $23.6 ($71.3) 133.10 1.94 (5.37) 42 44 Delta Apparel June $355.2 $322.0 10.31 $6.5 ($0.5) 1400.00 1.83 (0.16) 43 Back Oxford Industries Jan. $800.7 $947.5 (15.49) $14.6 ($271.5) 105.38 1.82 (28.65) 44 47 Perry Ellis International Jan. $754.2 $851.3 (11.41) $13.5 ($12.3) 209.76 1.79 (1.44) 45 37 Hot Topic Jan. $736.7 $761.1 (3.21) $11.9 $19.7 (39.59) 1.62 2.59 46 Back Casual Male Jan. $395.2 $444.2 (11.03) $6.1 ($109.3) 105.58 1.54 (24.61) 47 35 Hanesbrands Jan. $3,891.3 $4,248.8 (8.41) $51.3 $127.2 (59.67) 1.32 2.99 48 38 American Apparel Dec. $558.8 $545.1 2.51 $1.1 $14.1 (92.20) 0.20 2.59 49 Back Christopher & Banks Mar. $455.4 $530.7 (14.18) $0.2 ($12.8) 101.56 0.04 (2.41) 50 15 Abercrombie & Fitch Jan. $2,928.6 $3,484.1 (15.94) $0.3 $272.3 (99.89) 0.01 7.82
*NOTES: New = The company is appearing in the Apparel Top 50 for the first time. Back = The company has been ranked in the Apparel Top 50 in previous years but was not ranked last year because of its performance, because it was not publicly traded, etc. Dollar amounts are in millions of U.S. dollars. Levi Strauss & Co. is a privately held company that releases financial data publicly. Apparel does not include department stores in its Top 50 rankings. Nordstrom files with the SEC under “Retail - Family Clothing Stores” (SIC code 5651). THE TOP 50
No. 12 J. Crew One of the most heralded and closely watched person- alities in retail apparel has taken his company into new territory with the opening in May of J.Crew’s first bridal boutique, on New York City’s Upper East Side. Five years ago, CEO Mickey Drexler moved the company into bridal gowns (online only) after learning from a call-center operator that customers were ordering J.Crew sundresses as brides- maids dresses. It’s that sort of fine-tuned ear for change that contributes to his legendary reputation as a visionary — one who famously turned around Ann Taylor and Gap and who has now put J.Crew on the map as a destination for high- quality, preppy looks, uniquely pairing the J. Crew brand with the best of other heritage brands (see No. 34). Perhaps because of his bad experience with overexpansion at Gap, Drexler is moving forward cautiously at J.Crew, whose foot- print now spans 321 stores in the United States, including J. Crew, crewcuts (preppy for kids), Madewell, and two men’s- only specialty boutiques, The Liquor Store and The Men’s Shop, in Manhattan.
No. 13 Gap How Green Is My Customer? No, it’s not a follow up to the 1941 classic film, but it is the latest $64,000 question for retailers, and Gap may be able to provide some insight to the answer, as consumers donated a record-setting 270,000+ pairs of jeans in just two weeks to the com- pany’s recent “Recycle Your Blues” drive. The donated denim will be converted into UltraTouchTM Natural Cotton Fiber housing insulation for 500 homes in underserved com- munities; in return for their donations, customers received 30 percent off a new pair of 1969 Premium Jeans. Whether it’s as a result of the company’s serious commitment to socially and environmentally conscious conduct, or its turn toward more fashion-right merchandise, the owner of the Gap, Banana Republic, Old Navy, Piperlime and Athleta brands, long strug- gling with stagnant sales, is starting to see its fortunes look up. This year, the 3,100+ store retailer will open its first locations in China and Italy.
14 JULY 2010 • www.apparelmag.com THE TOP 50
No. 14 Nike No. 15 Volcom Named a 2010 Apparel Sustainability All-Star (see Continuing to draw inspiration from the Apparel, June 2010), Nike’s culture of innovative “energy of youth culture,” 2010 saw the thinking is at the heart of the business, from its boardsport apparel brand launch the Vol- Considered Design standards for progressing com Pipeline Pro surfing competition right toward fully closed-loop product design to its in front of the company-owned Pipehouse efforts to improve the lives of the 800,000 workers — a mecca of the surfing world, situated in its contract supply chain, to its advertising cam- directly in front of the Pipeline surf break paigns (think Tiger Woods). Now, the company on the North Shore of Oahu, Hawaii. The gets major props for spreading that culture of inno- event is a natural extension for a company vation outside its four walls. This year, Nike will fully immersed in the surf and skate make available manual, systems-independent ver- lifestyle, from its apparel, footwear and The boardsport apparel brand this year launched the Volcom sions of its Considered Apparel and Footwear accessories to its Volcom Entertainment Pipeline Pro surfing Indexes online. The goal? To advance industry-wide music label, Veeco Productions film divi- competition on the North adoption of best practices in sustainable product sion and its sponsorship of high-profile Shore of Oahu, Hawaii. design. “We know we don’t have all the answers skateboarding, snowboarding, surfing and ourselves, and realize future effectiveness hinges on motocross athletes. Volcom branded products are currently sold through- an increasingly open-sourced and interconnected out the United States and in more than 40 countries either by the com- world,” the company says. Nike is looking to its pany or international licensees. Behind the scenes the company deals non-swoosh brands for growth — Converse and with forecasting inventory levels, CPSIA regulations and controlling Hurley saw revenues increase 26 percent and 19 sourcing costs like everybody else — and must be doing a good job, as it percent, respectively, in 2009 — while the acquisi- pulled in the same net earnings ($21.7 million) as the previous year on tion of soccer brand Umbro in 2008 looks to score revenues down 16 percent — but online at volcom.com it’s all about big for Nike. hanging 10 and enjoying the ride.
No. 16 Unifirst No. 17 Carter’s High unemployment and a weak economy are bad for most Awwww! Who can resist that little giraffe or those flower-shaped companies and that holds doubly true for the uniform busi- buttons? Apparently not many moms, as Carter’s sells more than ness. Unifirst saw an increase in lost accounts in fiscal 2009, 10 products for every child born in the United States. In 2009, the as customers went out of business or fell on tough times. market for children’s apparel (sizes newborn to seven) decreased The First Aid segment of its business, with revenues 4 percent to $23 billion, but the owner of the Carter’s and decreasing 9.9 percent from $31.6 million in fiscal 2008 to OshKosh B’gosh brands increased its share of the market from $28.4 million in fiscal 2009, was particularly impacted by the 11.7 percent to 12.5 percent. Like many companies, in 2009 the declining economy, which begs the question: is safety the company froze wages, downsized benefits, lowered its cost struc- first thing to go when times get bad? Still, earnings are up ture and asked for the dedication of its employees — and on sales slightly down for one of the largest suppliers of uni- achieved a record level of sales and earnings. March 2010 saw the forms, workwear and related products to businesses of all launch of the carters.com and oshkoshbgosh.com ecommerce sizes, and — talk about not putting all of your eggs in one websites, supported by PFSweb Inc.’s End2End eCommerce® basket — no single uniform rental customer accounted for platform, with merchandising capabilities from Demandware. more than 1 percent of revenues. Unifirst deserves kudos for its commitment to becoming a more environmentally- friendly enterprise. Sci- entifically calculated No. 18 Phillips-Van Heusen laundering formulas, Its headline-making $3 billion purchase of Tommy Hilfiger from for example, ensure the London’s Apax Partners almost doubles the size of the company optimal combination of and propels it toward its stated goal of becoming the largest and cleaning agents, water most profitable branded apparel company in the world. It also and temperature for should give Phillips-Van Heusen a stronger foothold in Europe each garment, maxi- for some of its other labels, such as Izod and Arrow, while its mizing efficiency and close relationships with U.S. retailers should help bolster preventing waste. Tommy’s domestic presence. Calvin Klein anchors the com- pany’s large portfolio of owned and licensed brands, and remains The uniform company is one of its most significant opportunities for growth. At retail, “working” to become a worldwide sales of products sold under the Calvin Klein brands greener enterprise. totaled approximately $5.8 billion in 2009.
www.apparelmag.com • JULY 2010 15 THE TOP 50
No. 19 VF Keeping Up with VF Corp. is not yet a reality TV show, but it probably could be, as the world’s largest apparel company powers on. Just a few recent highlights include 7 For All Mankind’s third LA store opening, Kipling’s exclusive partnership with Macy’s, The North Face’s engagement with sustainability network Ceres, Nautica’s new blog, Eastpak’s collaboration with furniture design label Quinze & Milan, launch of the Vans Hub app for iPhones and Android OS phones (for joining the “inside” conversa- tion with Vans’ bloggers), and Napapijiri’s new e-commerce site. Meanwhile, VF Corp. climbed to the No. 2 spot among apparel companies on FORTUNE magazine’s list of the World’s Most Admired Companies. Global momentum continued in its Outdoor & Action Sports businesses, with revenues up 6 percent for The North Face and 5 per- cent for Vans. International revenues for 7 For All Mankind increased, and growth in Asia continued, with revenue from that region up 28 percent. Less fruitful were its Pictured here is 7 For All Mankind, one of European jeans business and its uniform business, while its Nautica®, lucy® and Reef® the star performers in VF’s vast portfolio brands also have not met expectations. of brands.
No. 20 Cintas No. 21 American Eagle Another Apparel Sustainability All-Star (see Apparel, June 2010), The apparel retailer has been Cintas has achieved 8 percent compounded annual growth over struggling for the past couple the past 10 years, with revenues up from $1.8 billion in 1999 to of years, with comp-store $3.8 billion in 2009. The largest North American provider of corpo- sales down 4 percent for the fis- rate identity uniforms through rental and sales programs puts a cal year ending in January 2010, premium on providing comprehen- and 10 percent for the prior year, sive service and innovative perfor- while profits are less than half what mance technologies to its customers they were two years ago. To reverse to help reduce workplace disasters the slide, American Eagle and injuries. Did you know that fire will focus on growing its costs businesses more than $2.3 bil- successful aerie intimates lion annually, that more than 4 mil- business (comp-store sales lion workers were injured on the job rose 25 percent last year) in 2005, and that an estimated 9,600 into a full lifestyle brand, opening five brick-and-mortar electrical shock and burn injuries locations for its previously online-only 77kids brand, and occur each year — most of which this summer closing its money-losing Martin + Osa chain are preventable? of 28 stores, which failed to lure its targeted 25-to-35-year old consumer. The company also announced last month Cintas puts a premium on providing that it will open three retail stores next year in Hong Kong, innovative performance technologies Beijing and Shanghai, respectively, through a franchise that will keep its customers safe from workplace disasters and injuries. agreement with international retailer Dickson Concepts.
No. 22 Under Armour The Squeeze Makes You Stronger. Under Armour’s talking about its Heatgear compression apparel, but philosophically speaking, it could just as easily describe the company’s scrappy determination to succeed against the odds (see p. 5 for more insight to the company’s start-up story). The athletic wear brand also kept the squeeze on development of its five key growth drivers — Men’s & Women’s Apparel, Footwear, International and Direct-to-Consumer — in its ongoing quest to make Under Armour a multi-billion dollar global brand. This year it moved closer, with international revenues from Europe up almost 50 percent, net revenues from its Direct-to-Consumer sales channel up nearly 50 percent, and Footwear net revenues showing the largest dollar increase of the five. Pushing deeper into the category, UA is developing basketball footwear, testing with top teams and athletes such as Brandon Jennings, who was wearing UA footwear when he scored 55 points for the Milwaukee Bucks last year and broke the team record for most points scored by a rookie, previously held by Kareem Abdul-Jabbar.
Under Armour continues to put the squeeze on customers and competitors alike. Pictured here is UA’s Recharge suit, its newest apparel technology designed to help athletes recover faster from intense workouts.
16 JULY 2010 • www.apparelmag.com THE TOP 50
No. 23 Columbia Sportswear Exploding its commitment to innovations that differentiate its products from other brands, Columbia Sportswear has applied for more patents in the past two years than it has in the past seven decades, and in fall 2009 launched the newest addition to its portfolio with the Omni-Heat™ suite of warmth technologies (which this editor personally tested out in the walk-in freezer at the Okamoto ice sculpting studio in Long Island City, New York. It works. See next month’s feature, “Columbia Sportswear: Putting the Heat on the Skeptics,” for more on the company’s transformative strategies and technologies). Its extreme and strategic focus on innovation and design must be working, as a growing number of high-influence specialty and sporting goods retailers are adding its brands to their assortments for the first time, and the company reported first quarter 2010 net income up 33 percent on 10 percent sales growth, over the same period last year.
No. 24 The Children’s Place No. 25 Nordstrom CEO Jane Elfers identifies value centers as a major growth opportunity for The Children’s The company recently opened an out- Place, with only 52 of its almost 950 stores located in these centers. The largest pure-play let store, Nordstrom Rack, in Manhat- children’s specialty apparel retailer in North America plans to open 65 more this year, tan’s Union Square, reflecting an adding 5 percent in square footage to the chain, and doing so with lower build-out costs increasingly common shift in retail resulting in part from the lower lease costs at these centers and a “particularly friendly strategy. No longer situated out in the tenant environment.” Also on the whiteboard: evolving from a one-size-fits-all mer- boonies as the last stop for liquidating chandise planning approach to its San Juan-to-Saskatchewan store base to a more unsold inventory, outlet stores are strategic approach to up-front inventory planning and to allocation, by volume, climate now popping up in prime real estate and market demographic. Aligning its channels and marketing to one clear message, locations, with more merchandise and communicating that to the con- made exclusively for these stores. Like sumer, is also in the works, as is contin- other retailers, while Nordstrom will ued focus on its e-commerce store (which have to be cautious about diluting its currently drives just 7 percent growth), brand, it will also have the opportu- expanding its merchandise offerings and nity to put high-end brands in the pushing outside the United States. hands of shoppers who cannot now afford full-price product, but will likely More kids can head back to school attired in trade up when finances allow. This apparel from the company as it opens 65 year plans are to open 17 Rack stores, stores this year in value centers, a retail format The Children’s Place has barely bringing the total to 89, vs. just three tapped and which it sees as a huge new full-price department stores. opportunity for growth.
No. 26 Limited Brands No. 27 Cato Women make up nearly half of Major League Baseball’s fans, a In a weak economy, the Charlotte, NC-based specialty fact not lost on Limited Brands, whose Victoria’s Secret name- retailer of low-priced women’s fashion delivered a 36 percent plate recently partnered with MLB in the launch of a new fash- increase in earnings, paid $19.5 million in dividends and ion line under its PINK brand, featuring the logos of 11 ended the year with approximately $200 million in cash and baseball clubs, including the New York Yankees, Boston Red investments with no debt. The 1,300-store chain followed up Sox and Chicago Cubs. Victoria’s Secret is hoping to score a with record first-quarter results over the corresponding home run with a female fan base that wants to wear apparel period last year, with same-store sales up 8 percent and net designed and cut for them — not oversized men’s jerseys. It’s income up 44 percent, which chairman, president and CEO that type of eye for the zeitgeist that has characterized the John Cato attributes in part to strong Easter sales and favor- company’s evolution from an apparel-based specialty retailer able weather, while citing “a significant degree of uncer- to an approximately $9 billion segment leader focused on lin- tainty” in its markets and taking a conservative view of gerie, beauty and personal care product categories designed to second-quarter sales. Cato continues to grow and refine its make customers feel “sexy, sophisticated and forever young.” It’s Fashion Metro concept and for its Cato division is testing Led by Leslie Wexner since its founding in 1963, the company different store sites and formats including power centers, more than doubled its earnings in 2009 vs. 2008 despite a sales larger-sized stores and other test stores in larger markets in decrease of 4.5 percent. the Midwest.
18 JULY 2010 • www.apparelmag.com THE TOP 50
No. 28 The Warnaco Group Around the time that Phillips-Van Heusen was announcing its purchase of Tommy Hilfiger (see No. 18) there was some buzz that it might purchase Warnaco. While that didn’t pan out, some speculate that it will, given the significant global growth potential of the Calvin Klein brand and the potential synergies surrounding a merger that would bring the two CK houses together. Warnaco is the largest Calvin Klein licensee, and the brand remains the growth driver at Warnaco, with Calvin Klein underwear and jeans generat- ing $1.5 billion in 2009, or 73 percent of revenues. The company has set its sights on doubling that figure in the next few years, while maximizing revenues from its heritage brands, including Chaps, Core Intimates and Speedo. In 2009, the company entered new markets including Chile and Peru, while in Europe, emphasis was on developing underpenetrated countries such as Germany, where it opened four new stores.
No. 29 Dress Barn No. 30 Timberland In another example of a weak retail market The CEO known for his personal spurring consolidation, Suffern, NY-based Dress convictions and his commitment to Barn made headlines in June of last year when it a business model in which com- announced plans to acquire New Albany, Ohio- merce and justice are inextricably based Tween Brands (last year No. 48 on linked has not lifted his foot off the Apparel’s Top 50) in a deal valued at roughly $157 gas pedal (er... okay, bad metaphor million. You could be excused for not seeing that choice) when it comes to making one coming, but the move allowed Dress Barn to the world a better place, even dur- diversify from value-priced apparel for career ing more trying times for the com- women into that for “tweens,” as it took over 908 pany. The culture Jeffrey Swartz nationwide Justice stores that target seven- to has built is reflected throughout 14-year-olds with low-priced fashion items such Timberland, in its pursuit of a car- The lattice of reclaimed timber branches as dresses and graphic t-shirts — and it allowed bon neutral footprint, recyclable that wrap Timberland’s Westfield, Tween Brands to repay $165 million in outstand- products and fair workplaces, in its London, store in the brand’s iconic logo, ing bank debt. So far so good: For the nine- extreme employee engagement in show its environmental values in action. (The façade was created by design month period ending April 24, 2010, Dress Barn community service and in the consultancy Checkland Kindleysides.) reported net sales of $1,663.7 million, an increase eponymous tagline of its blog: from $1,095.3 million, comp-store sales up 9.9 We’re Timberland. We’re Earthkeepers. A recent post by Swartz on the percent (dressbarn up 6.4 percent, maurices up Earthkeepers blog has likely stoked some controversy but may also make a 5.5 percent and Justice up 21.1 percent) and a net positive difference in his employees’ lives and to the company’s bottom earnings increase to 91.4 million from $41.0 mil- line: the CEO issued a smoking ban on Timberland grounds. It all makes lion, over the prior period. you wonder: Can you imagine where we’d be today if Swartz ran BP?
No. 31 rue21 No. 32 Chico’s FAS Bringing style to the nation’s breadbasket, rue21’s strategy The 1,104-store specialty retailer is up of targeting secondary markets and rural, underserved from spot No. 46, reflecting the towns with populations of fewer than 200,000 across the progress of turnaround efforts that United States — typically located in Wal-Mart strip malls, focused on improved fashion and cus- or “shadow centers” — is paying off handsomely. The tomer service, enlivened marketing and 535-store and rapidly expanding retailer plans to open 100 merchandising, and cuts to expenses. new locations this year focused on offering cheap, stylish The results speak for themselves, with and quick-turn apparel to fashion-starved teenagers aspir- 2009 providing the company’s first ing to look 21, or adults hoping to feel 21. Its new store yearly comp-store sales increase (6.1 formats featuring the rue21 etc! store-in-store layout are percent) since 2006. The Chico’s brand turned in its best comp- larger and more profitable at approximately 4,700 square store sales performance since 2005 with sales up 4.2 percent, feet, and historically pay back start-up costs within while White House | Black Market saw comp-store sales rise 10.8 12 months. Do you rue? I do expresses the rue21 culture, percent and net sales increase 12.1 percent, and Soma Intimates and while girls currently “rue” the most, the guys are kick- experienced growth in new and existing stores. Betting that mobile ing it into gear, as rue21 faces limited direct competition in e-commerce will help continue the momentum, the company part- the young men’s category in most of the communities nered with Useablenet to optimize its websites on all mobile phones; where it sets up shop. A recent upgrade of rue21’s distrib- customers can now find product information, search nearby store ution facility will allow it to support 1,300 stores. locations and complete purchases wherever they please.
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No. 33 G-III Apparel Group No. 34 Levi Strauss Charging up from the bottom spot, G-III turned in an excellent per- Because it brought in turnaround experts several years formance fueled in part by one of its best outerwear seasons in back to deal with its then overwhelming debt load and many years. Like some other Top reposition the company for growth, Levi Strauss was 50 companies, its Calvin Klein label better situated than many to ride out the recession and showed its power to produce: its emerge in attack mode. As part of its global retail introduction of Calvin Klein growth strategy, last year it opened 154 stores (including women’s sportswear proved one of the acquisition of 73 Levi’s and Dockers outlets), vs. 60 the most successful new initiatives the previous year. And while a few years ago the 157- for the year, and furthered the year-old company was busy launching its value-priced company’s overall vision of trans- Signature brand, of late it’s done a 180, staking its claim forming G-III from an outerwear at the fashion end of the market with the opening of a maker to an all-season diversified new premium division based in Amsterdam that over- apparel company. The company’s sees the development of its high-end Made & Crafted strong financial position was and Vintage Clothing labels, opening its “re-crafted” enhanced with the completion of a Levi’s flagship store on London’s tony Regent Street fourth-quarter public stock offering and distributing in new venues (check out the dark- that yielded $35 million to the com- rinse slim-fit men’s 501s for $265 at J. Crew). While it pany, possibly to be used for future surely won’t replace the iconic image of Levi’s as the strategic acquisitions. jeans that can take a lickin’ and keep rushing for gold, its newfound fashion cachet may regenerate some The unseasonably cold winter likely contributed to one of G-III’s best excitement for the entire business, which, at $4.1 billion outerwear seasons. in revenue, is still well off its high of $7.1 billion in 1996.
No. 35 Citi Trends No. 36 Men’s Wearhouse Since its IPO in 2005, the 420-store company has yet The company streamlined its organization, cutting freight expenditures, to borrow the first dollar, as it maintains a strong reducing core occupancy expenses and optimizing its DC, lowering balance sheet and continues to show much promise costs by more than $50 million in response to a challenging environ- for long-term growth. The value-priced retailer of ment and what chairman and CEO George Zimmer notes is a funda- urban fashion and accessories catering primarily to mental shift in the way people spend money. While adopting a stance the African American community added 49 stores to of more “conspicuous frugality,” Men’s Wearhouse will pursue new its base in 2009, increasing its selling square footage opportunities such as those offered by its web-based business, which by 15 percent, which it expects to do again this year. today receives 1 million hits per month. In 2009, the well-capitalized The implementation of a new warehouse manage- men’s discount apparel retailer used its market leadership position to ment system and put-to-light technology at its Dar- aggressively pursue market share through heavy promotions, a strategy lington, SC, facility in 2009 increased the company’s that helped sales despite declining traffic, and which it continues to pur- distribution productivity and throughput capacity, sue. Margin pressures from its promotional activities were somewhat and based on projected growth in its store base, the offset by strong performance in its tuxedo rental business, and the com- company will likely expand this infrastructure soon pany moves to capitalize on that momentum this year by offering a free with a new DC in the Southwest. suit to qualified wedding parties.
No. 37 Zumiez Unlike competitor Pacific Sunwear, which slipped off the Top 50 when it filed for bank- ruptcy protection two years ago and which continues to lose money, the surf-and-skate lifestyle chain earns street cred for its one-stop-shopping experience that lets customers pick up a board (or design one online) as well as apparel in the chain’s 384 mall-based stores. It builds on that by offering a huge variety of brands including emerging, alternative labels that resonate with a countercultural clientele inclined toward independent names. Plus, Zumiez does all this in a distinctive environment of “organized chaos” that makes teenagers feel right at home — because it’s so much like their rooms — and includes couches and video games. All that’s really missing is an empty pizza box and some dirty socks on the floor. This year the company plans to bring the home-away-from-home expe- rience to more youths with the opening of 25 new stores.
20 JULY 2010 • www.apparelmag.com THE TOP 50
No. 38 bebe Stores The launch at New York Fashion Week of new label “bebe-Kardashian,” a col- laboration with reality TV celebrities Kim Kardashian, Kourtney Kardashian and Khloe Kardashian-Odom, let bebe stores play up its strengths in social media and cross-channel interconnectivity, as the brand received serious buzz from a two-week social media campaign developed by iCrossing that resulted in a more than 20 percent boost in Facebook fans and an almost 60 percent increase in Twitter followers. Its success led to a second campaign that included Twitter Q&A with the sisters, blogger outreach, in-store promotions and fan-only sneak- peeks. Social media is a key marketing strategy for bebe, whose audience is young, hip and digitally savvy. In a statement, middle sister Kim said of the col- lection, “This is honestly a dream come true,” and, with bebe stores reporting net earnings down 80 percent over the previous fiscal year, you can bet the company is hoping sales of the line will let it echo her sentiments.
No. 39 Stage Stores No. 40 Superior Uniform The small-town retailer operating 770 Faced with declining sales due to high unem- stores bought the Goody’s name at a ployment and delayed uniform replacement bankruptcy auction, adding the name- purchases, the company implemented aggres- plate to its Beall’s, Palais Royal, Peebles sive cost reduction initiatives, including shift- and Stage stores, and expanding market ing some administrative positions to its share in 104 markets where Goody’s Central American subsidiary, The Office stores previously overlapped with Stage Gurus, and improving operating efficiency. It Stores locations. During 2009 it branded maintains a strong financial position — in fis- 15 of its 29 new stores with the “new” cal 2009 it generated more than $17 million in Goody’s nameplate, and also entered cash from operations and eliminated its out- Oregon, its 39th state. On the IT side, the standing debt — enabling last year’s acquisi- company implemented a streamlined tion of Blade Sportswear, an award-winning POS software platform and completed provider of uniforms to U.S. restaurant and development of a markdown optimiza- foodservice chains, and CEO Michael Benstock said in a statement that the com- tion tool, while this year it will reintro- pany is actively pursuing other potential strategic acquisitions. Financial and logis- duce the moderately priced casual tical assistance it provided to its Port-au-Prince, Haiti-based supplier One World sportswear brand JH Collectibles, now an helped the contractor get up and running just two weeks after the devastating exclusive to Stage Stores, and launch the earthquake. Superior remains committed to the country, and was amazed by the Wishful Park private label for its juniors’ resilience of One World employees and by the continued level of customer service customer. it received.
No. 41 Stein Mart No. 42 Delta Apparel The company, founded by the current The sixth consecutive year of record sales at Delta chairman’s grandfather just after the turn Apparel was achieved through organic growth at each of of the last century, ended the year much its operating units plus the fourth-quarter acquisition of stronger than it began, going from a loss of To The Game, which brought branded headwear to the more than $70 million in 2008 to a profit of business. The momentum continues, with sales up 19.1 nearly $24 million in 2009. Along the way percent and net income up 162 percent for the nine it instituted new supply chain distribution months ended in March, over the same period last year. practices and added a new CFO and chief Fiscal 2009 saw the closing of the textile facility associated merchant to its executive team, having just with its M.J. Soffe business, a move that is expected to recently brought on board a new CEO. save approximately $1 million annually, with Soffe fabrics Making progress toward its goal of attract- now produced in its more modern, lower-cost facilities in ing a more youthful customer, the retailer Maiden, NC and Honduras. Delta looks forward to intro- of moderate-to-better apparel at below- ducing Junkfood (apparel, not potato chips) to additional department-store prices updated its ladies’ consumers by building direct relationships through the sportswear offerings with branded denim and related tops. brand’s newly launched website, junkfoodclothing.com.
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No. 43 Oxford Industries It slipped off the chart last year, but the operator of the Tommy Bahama, Ben Sherman, Lanier Clothes and Oxford Apparel divisions is back on the Top 50 and showing solid improvement that has continued into fiscal 2010, with first quarter sales up slightly and net earnings almost double what they were during the same period last year. Increased customer demand during the period led to stronger-than-expected sales at its own retail stores and those of its wholesale customers, and drove Oxford to ship some second-quarter merchandise ahead of schedule to service its customers. Responding to continued retail consolidation and the increasing concentration of sourcing locations for apparel manufacturing, the company continues to emphasize branded apparel vs. private-label apparel products. The operator of the Tommy Bahama, Ben Sherman, Lanier Clothes and Oxford Apparel divisions is back on the Top 50 and showing solid improvement.
No. 44 Perry Ellis International Sales were down but the company was back in the black in fiscal 2010, and first quarter fiscal 2011 results are promising with earn- ings up 56 percent as the consumer returned to more normal shopping patterns. Conservative inventory planning at retail and a favorable consumer response to its products fostered increased sales, lower markdowns and better gross margins. Perry Ellis’ port- folio of 32 owned or licensed brands targets a wide range of lifestyles, demographics, socioeconomic groups and product categories, but the company’s two largest customers, Kohl’s and Macy’s, accounted for approximately 20 percent and 11 percent of net sales, respectively, in fiscal 2010, and its five largest customers accounted for 53 percent of net sales.
No. 45 Hot Topic The teen retailer of pop-culture-influenced apparel and accessories nabbed an exclusive licensing deal with cult phenomenon Twilight that brought legions of fans to its stores, but music remains the core of its business. As Hot Topic’s strategy evolves to focus less on major names and more on emerging and mid-tier artists, the company is attracting cus- tomers through its free in-store and mall-based acoustic shows — and merchandise — featuring local talent, while positioning itself as the authentic voice of new music through its own e-music store and social networking site, Shockhound.com. Although its focus has shifted to music-themed t-shirts and its body jewelry appeals to a wider swath of teens than ever before, the 836-store chain (including 156 Torrid stores) hasn’t been able to completely shed its image as a “goth” destination.
No. 46 Casual Male No. 47 Hanesbrands With more than 470 stores in 44 states, Casual CEO Rich Noll says the company has emerged Male is by far the leading specialty retailer in the from the 2009 recession with “significant extremely fragmented, approximately momentum,” and it’s hard to argue with that, $6 billion big & tall market (the next largest com- particularly given Hanesbrands’ strong first petitor has just five stores). It cut expenses and quarter results. Net sales increased by $70 mil- inventory in the face of a difficult retail environ- lion to $927.8 million, and the underwear ment, but its intensive capital investments (to the maker posted sales increases in every business tune of $75 million) in its stores and infrastruc- segment except hosiery, with innerwear mak- ture since the owners acquired the firm from ing up the lion’s share at $33 million, including bankruptcy in 2002 should position it for contin- double-digit increases in men’s underwear, ued growth. The retailer has shown a keen ability while its Just My Size brand of plus-size to listen to its customer — it famously rebranded its stores from Casual Male apparel drove retail casualwear sales growth of Big & Tall to Casual Male XL after learning from a customer of the stigma nearly 50 percent. Noll attributes much of its associated with the words “big and tall” — and it continues to seek ways to growth to the 62 miles of additional shelf meet his needs through expanded multi-channel operations, additional size space it gained from its U.S. retail customers offerings, improved assortment planning strategies, new Casual Male this year, and the company projects net sales XL/Rochester Clothing “hybrid” stores and via international expansion. gains of 6 percent to 8 percent for 2010.
22 JULY 2010 • www.apparelmag.com THE TOP 50
No. 48 American Apparel Dropping from No. 38, the hipster apparel retailer that never fails to make controversial headlines — many of which are not publishable in polite com- pany — was the subject of much ink last year when a factory shakeup turned up approximately 1,600 illegal workers at its downtown L.A. location. The 280+-store retailer, which has for years been calling for immigration reform through its “Legalize LA” campaign, now has more problems on its hands, losing so much money in the first quarter of this year that it could soon be out of compliance with certain loans and default on its debt. Déjà vu, any- one? It’s also in danger of being delisted from the American Stock Exchange if it doesn’t file its quarterly financial report with the SEC by next month, and if that’s not enough, the company was recently flogged by plus-sized model For years, American Apparel has been calling for and porn star April Flores for not producing plus-sized women’s clothing. immigration reform through its “Legalize LA” campaign.
No. 49 Christopher & Banks Sneaking back into profitability, and back onto the Top 50, the Minneapolis- based specialty retailer of women’s clothing still fell well short of its own expecta- tions for the year. The operator of more than 800 stores last month enrolled the one-millionth member in the Friendship Rewards Program it launched just this March, reflecting a measure of success in the company’s stated goal to build value for its customers and differentiate its brand. Other initiatives receiving top priority are expanding in smaller markets, growing its plus-size market share and expanding its e-commerce business. The company completed the closing of its Acorn division in December.
No. 50 Abercrombie & Fitch Its continued free-fall, from spot No. 15, mimics the continued decline of its sales and earnings. Abercrombie & Fitch’s negligible profits in fiscal 2009 also reflect the costs to close its 29 poorly performing Ruehl stores. The New Albany, OH-based retailer, which operates 1,100 stores, has struggled in recent years as consumers make fewer discretionary purchases — and those often at competitors such as Aeropostale and American Eagle. Still, first quarter 2010 results show net sales up 14 percent over the same period last year, with international net sales (including direct- to-consumer), up 102 percent to $119 million. Growth this year will include accelerating international expansion, with plans to open Abercrombie & Fitch flagship stores in Copenhagen, Denmark and Fukuoka, Japan, 25 international mall-based Hollister stores, and its first international Gilly Hicks store in the United Kingdom.
Jordan K. Speer is editor in chief of Apparel. She can be reached at [email protected].
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