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Top 50 Sponsors TOP 50 SPONSORS Fifty top-performing apparel firms are working feverishly to innovate with product, win the hearts of the consumer, balance their footprint, and bring home the profits. Read on for a curated examination of what’s happening inside the walls of the prestigious 2016 Apparel Top 50. #1 Michael Kors The global lifestyle brand makes its debut on the Top 50 this year, after issuing an IPO in 2012. (The company files under leather and leather goods, which Apparel did not previously consider. Had it done so, MK would have debuted at No. 6 in 2013, hit the No. 1 spot in 2014 and held steady there through this year. Also, at press time, MK had filed for its most recent fiscal year, and while its earnings and profit- ability are down, it still churned out a whopping 17.78 profitability). The brand, which produces a range of products under Michael Kors Collection, MICHAEL Michael Kors and Michael Kors Mens, including accessories, footwear, watches, jewelry, ready-to-wear and a full line of fragrance products, operates stores either directly or through licensing partners, in 95 countries around the world, and also has a large wholesale business. MK has expanded so rapidly in the past few years that many have judged it overexposed. Whether true or not, that rapid growth combined with decreases in mall traffic, heavy promotional activity and other chal- lenges at retail have recently spurred the company to cut back on the number of products it sells to wholesalers, as well as to retailers that sell many other brands, so as to better control its pricing, protect the Michael Kors brand image — and increase demand for full-price product. This year the company continues to expand its international markets and e-commerce flagships and is building up its men’s business. Also, in the spring it launched Michael Kors ACCESS, a line of wearable technology. In May, the company acquired Michael Kors (HK) Limited, the exclu- sive licensee of MK in China and other parts of Asia. COVER STORY #2 Gildan It nabbed the No. 1 spot for the second year in a row, just one more demonstration of how powerful it can be to have the “voice” of five-time CMA Male Vocalist of the Year Blake Shelton on your team. Then again, maybe it’s a sign of just how powerful it can be to own your manufacturing base, which Gildan continued to strengthen with $230 million in capital expenditures, including significant investments in yarn-spinning in 2015 that are reducing costs while also enhancing the company’s product offering with higher-end yarns. Nah. It’s probably Blake, who signed on as a celebrity endorser in early 2015. To date, Gildan, whose family of brands includes Gildan®, Gold Toe®, Anvil®, Comfort Colors®, Secret®, Silks®, Powersox®, Kushyfoot® and Therapy Plus™ as well as licenses for Under Armour® and Mossy Oak®, has sold 7 billion shirts in more than 50 countries and operates more than 25 facilities in North America, Central America, the Caribbean and Bangladesh that employ more than 42,000 employees. (In March 2015, Gildan received a $3.5 million special grant from the Honduran government in recognition of its significant job creation there, which it redistributed to educational, healthcare and housing projects in that country.) It continues to invest in vertical manufacturing and complementary acquisitions, in 2015 purchasing Comfort Colors, and just this past May acquiring Alstyle Apparel LLC, manufacturer of activewear products, which comes with its own manufacturing operations in Mexico. Gildan is gaining market share across segments: U.S. Printwear is up 12 percent, Branded Apparel sales grew 11 percent; and the Gildan® brand gained 14 percent market share in men’s socks, to reach the No. 2 brand position in the United States retail market. #3 The Buckle Since it debuted on the Top 50 at No. 2 in 2009, The Buckle has re- mained at the top of the chart with a steady winning formula that puts the customer first. Sales, net income and profitability were all slightly down in 2015 but the company still turned in an impressive perfor- mance, with profitability of 13.16 percent. Online sales were up 11.8 percent, to $105.5 million. Men’s sales were up approximately 2 percent; women’s sales were down approximately 6.5 percent; and the company’s private-label business took a slightly larger share at 36 percent of sales. The popular denim destination opened nine new stores, completed 44 remodels and closed one store during the year, closing 2015 with 385 of its 468 stores in its newest format. This year it expects to open four new stores and complete 18 remodels. #4 lululemon athletica Despite its now infamous see-through yoga pants and its founder’s comments about women’s thighs, lulu has nonetheless remained very profitable, and that is likely because it’s striking at the hearts of its ideal customers — a “32-year-old professional single woman named Ocean who makes $100,000 a year” and her counterpart, Duke, a 35-year-old athletic opportunist who enjoys surfing in the summer and snowboarding in the winter (and also makes more money than Ocean) — focusing on the “experi- ence” part of the retail experience, expanding its community concept with Hub 17, a unique 5,000-square- foot space above its Flatiron store in NYC for fitness classes, monthly dinners, concerts, art shows and more. Also available: a concierge service to help with anything from sending packages home by messenger (free of charge), making dinner reservations, or booking a spot at an exercise class. Great Q4 top-line mo- mentum exceeded expectations (global comps were up 11 percent and ecomm was up 33 percent), while lulu launched “Engineered Sensation” with new tech fabrics and construction techniques, also reorganiz- ing its “pant wall” to sell its yoga pants by fit or “sensation” instead of silhouette, which contributed to a 19 percent increase in women’s bottoms from September to January. Lulu is turning up the heat on digital with new CRM capabilities and marketing, opened new locations in London, Seoul and Tokyo, and expects to open 11 stores this year. International is expected to account for 20 percent to 25 percent of business by 2020, by when it expects total revenue to double to roughly $4 billion. Men’s business continues to outpace overall growth, and lulu hired Lee Holman to its first ever creative director position, with a goal of bringing men’s and women’s together under a unified brand vision. www.apparelmag.com • JULY 2016 13 THE TOP 50 #5 Nike In an era when big established companies often find that their processes are cumbersome and that their businesses are outpaced in innovation by younger, more flexible startups, Nike has proven that big and nimble are not mutually exclusive. From its powerful marketing spots such as last year’s clever “We’re short a guy,” (watch it) to its Sport Research Lab which continues to develop product to enhance athletic performance, to its new NIKE+ app that combines on demand coaching, a personal store, and engaging experiences, Nike is just doing it. One other thing it just did (perhaps feeling the pressure from Under Armour’s rising roster of star athletes) was sign LeBron James to a lifetime deal — the largest single- athlete guarantee in company history. Nike has made more versions of James’ shoe than it has for any other athlete except Michael Jordan, who is on his 30th Air Jordan. Since signing James in 2003, Nike has made 13 versions of James’ signature shoe, with annual sales in 2015 for his line estimated to top $400 million. A few of Nike’s many new concepts and innovations include 1) the AntiClog Trac- tion football cleat, which keeps mud from sticking to the shoe; 2) the Free RN Motion for runners with a new outsole design that expands in multiple directions when the foot strikes the ground; and 3) the NIKE HyperAdapt 1.0, featuring auto adaptive lacing, with laces that tighten when your heel hits a sensor in the shoe. In the nine months since its annual filing, Nike has outperformed last year’s pace, with revenues up 5.7 percent, net income up 21 percent, and profitability at an impressive 12.1 percent. #6 L Brands There’s a good chance that men everywhere will no longer bother to check the mail. It’s the end of an era for the company’s flagship brand: Victoria’s Secret announced that it is scrapping its famous catalog, which the company says is an outdated concept — and one that cost $125 million to $150 million annually. Other recent big changes at the company include job cuts, the elimination of swimwear, shoes and accessories, and the division of the VS business into Victoria’s Secret Lingerie, PINK and Victoria’s Secret Beauty, each of which will be managed by separate executives. (Former Spanx CEO Jan Singer will take over VS Lingerie and former Coach executive Greg Unis will run the VS Beauty business.) L Brands, whose portfolio also includes Bath & Body Works, La Senza, PINK and Henri Bendel, will grow this year via: real estate (27 new openings in North America, including a new Victoria’s Secret flagship store on Fifth Avenue); increasing store selling payroll in efforts to improve the customer experience; and investments in international expansion, which grew by 144 new stores in 2015 to reach 531, and will add about 175 stores this year globally. #7 VF Corp. You can’t help but be inspired by the stories of The North Face’s Never Stop Exploring® campaign, the company’s first expansive view of exploration and its first truly global brand effort.
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