WWDMILESTONES BUILDING A BILLION-DOLLAR BRAND MARKETING THE BULLY PULPIT DENIM TRIMS DOWN KGROUP LTD. USING MAC COSMETICS; STYLED BY KIM FRIDAY USING MAC COSMETICS; STYLED BY KGROUP LTD. Southpole at A TWO-DECADE20 JOURNEY THROUGH THE URBAN LANDSCAPE. Polyester twill bomber jacket with cotton and spandex denim jeans and leather sneakers. PHOTO BY GEORGE CHINSEE; MODEL: MARINA/FORD; HAIR BY KAYLA MICHELE AT ATELIER MANAGEMENT FOR REDKEN; MAKEUP BY JEN MYLES AT WOR JEN MYLES AT MANAGEMENT FOR REDKEN; MAKEUP BY ATELIER MICHELE AT KAYLA GEORGE CHINSEE; MODEL: MARINA/FORD; HAIR BY PHOTO BY 2 WWD MONDAY, AUGUST 22, 2011 SECTION II WWD.COM WWD MILESTONES The Southpole Journey The route to a $1 billion retail business. By David Lipke 1899: David and Kenny Khym’s bags, footwear, headwear and cold grandfather, Ki-sun Khym, is one of weather accessories. A 2007 look Research shows the first Korean immigrants to the from Wckd. Southpole as U.S., moving here with the help of 2007: As part of its marketing ef- the fifth-largest Christian missionaries. forts, Southpole sponsors an out- denim brand in field billboard at Shea Stadium, the the U.S. 1926: Ki-sun Khym moves back to former home of the New York Mets. Korea after earning a degree from the University of Nebraska. 2008: The White Tag brand is launched. 1977: Ogden Khym, son of Ki-sun, and father of David and Kenny 2008: The A. Prodigee brand is Khym, moves from Korea to the launched. Riverdale section of the Bronx. 2008: Southpole inks a license for 1981: David Khym takes the fam- infant and toddler apparel. ily savings of $10,000, plus a $5,000 line of bank credit, and opens L&L 2008: Against All Odds opens Menswear in the Brownsville sec- stores in California, just before the tion of Brooklyn. financial crisis. 1989: The Khym brothers move the 2009: Against All Odds files for store to Jamaica, Queens, and re- Chapter 11 bankruptcy in January name it Metropolitan Total Fashion. and emerges in December. The company now operates 24 stores on 1991: David and Kenny Khym start the East Coast. their own line as Wicked Fashions Inc. White Tag Sears 1995: The Southpole began in picked up brand is founded, under 2008. Southpole the Wicked Fashions in 2002. parent company. 1995: Kenny Khym founds the Against All Odds retail chain as a mall-based streetwear store, eventually grow- ing it to almost 80 stores. 2001: Southpole transi- tions from a premium brand to a midtier brand and enters J.C. Penney for the first time. 2002: Southpole is picked up by Sears. 2002: Southpole is awarded the J.C. Penney Divisional Award for Men’s Apparel. 2002: The Lot29 brand is launched using licensed cartoon characters. The A. Prodigee brand is now on hiatus but the com- 2009: The RS by Ryan Sheckler was launched pany will relaunch it in coming sea- brand is launched. in 2008. sons under a different concept. 2010: The RS by Ryan Sheckler 2003: Southpole launches a juniors brand is shuttered. line. The brand is awarded the J.C. Penney Divisional Award for 2010: The WT02 brand launches. Women’s Apparel. 2010: Southpole is the fifth-largest 2003: Southpole inks a Japanese denim brand in the U.S., behind distribution license with Wise Levi’s Wrangler, Lee and Calvin Harvest. Klein, according to NPD Group figures. 2004: David Khym is selected as Ernst & Young’s Entrepreneur of 2011: Southpole launches its the Year. “Speak up, Step up” anti-bullying campaign. 2005: Pop star Ciara is featured in Southpole juniors advertising. 2011: Southpole relaunches its Web site from a business-to-busi- 2006: Southpole launches acces- ness format to a consumer-oriented sories with the addition of hand- branding site. congrats to Southpole® on their 20th anniversary 4 WWD MONDAY, AUGUST 22, 2011 SECTION II WWD.COM WWD MILESTONES Pole Position Two Korean brothers start an apparel company that emerges as one of the biggest players in urbanwear. By David Lipke ANYONE LOOKING for a tale of the base with lower-priced product. The mythic American dream realized may Kenny Khym following year, Southpole was picked find a classic example in the story of up by Sears. David and Kenny Khym, brothers and “Going into the midtier was the most founders of Southpole, which this year important milestone for the company be- marks its 20th anniversary in business. cause it opened the brand up to such a Their family came to the U.S. in wider audience,” said Khym. “Southpole 1977 when their father moved to the was the pioneer in making…[urban] Riverdale section of the Bronx from trend-right apparel accessible to Middle South Korea. In 1991, the duo founded America ahead of others.” the young men’s and juniors brand and Today, the sweet spot for Southpole its parent company, Wicked Fashions denim runs from $24.99 to $29.99. In Inc. The Southpole brand now rings up fleece, it’s $19.99 to $29.99, and in $1 billion at retail and is sold in more T-shirts, it’s $12.99 to $14.99. Denim than 5,000 department and specialty now accounts for 32 to 35 percent of store doors. total sales; fleece for 20 to 22 percent; Since taking a sales hit following T-shirts for 30 percent, and non-denim the 2008 financial crisis and making fashion from 10 to 15 percent. a round of layoffs, Southpole’s sales “Our biggest strengths are fashion, have been growing at a steady 8 to 12 quality and our competitive prices, percent clip annually, on the strength which I don’t think a lot of people can of its robust sourcing operations, sharp do in the way we can,” said Art Matura, focus on competitive pricing and fast- Southpole’s senior vice president of evolving designs that appeal to its core sales, who is among about 500 employ- customer base in the midtier channel. ees of the brand. “In the fashion business, passion is Describing the company’s partner- the number-one most important thing, ship strategy with retailers, Khym but then comes market research and explained, “Our foremost objective understanding what the trends are,” is maximizing customer satisfaction said Kenny Khym, who is president of and [retailers’] profitability. In other Wicked, which began as a single dis- words, we aim to become a ‘solution count men’s wear store in the inner-city provider,’ delivering what they need Brownsville neighborhood of Brooklyn. when they need it. There are various Today, Khym oversees the day-to- programs we provide, from replenish- day operations of the company out ment to retail sales analysis providing of its Fort Lee, N.J., headquarters, a merchandising solutions. All efforts seven-story building emblazoned with are aimed at creating a win-win sce- a prominent Southpole logo just off nario for all parties involved.” the George Washington Bridge. In ear- While Southpole is an urban-ori- lier years, Kenny directed strategy and ented brand, its appeal crosses a wide product development planning while ·· swath of the youth demographic, ac- older brother David ran the company. cording to company research. That’s es- David now holds the chairman title and pecially true in today’s market, where focuses on long-term growth strategies. there’s been a wide-scale blurring of The elder Khym also oversees the {Continued on page 6} Southpole Foundation, which provides scholarships to community college stu- dents in the New York and New Jersey area and provides grants to health and social-services organizations. Southpole today is sold in more than 1,000 doors of J.C. Penney, 600 units of Sears, 480 doors of Stage stores, STEPHEN SULLIVAN PHOTO BY 300 Peebles stores and 70 doors of Gordmans. Department stores account for 80 percent of sales and independent specialty retailers for 20 percent. In our definition, the term About 50 percent of Southpole sales are in young men’s, 25 percent in ju- ‘urban’ does not equal niors and 25 percent in kids. Unlike its current incarnation as a midtier brand, Southpole started life ‘hip-hop.’ Urban is a much as a premium urban brand, selling jeans for $60 at a time when Levi’s cost larger realm that may about $35, noted Kenny Khym. The big- gest category for it back then was the encompass hip-hop. puffy “bubble” jacket. “It was a big trend, and we were competing with brands like Bear USA, It’s a widely accepted The North Face and Triple Fat Goose. But I remember The New York Times misconception to correlate did a trend story, and maybe six of the 12 photos were of people wearing urban fashion with hip-hop, Southpole jackets on the street,” said Khym, recalling that symbolic moment for the brand. but we think otherwise. In 2001, Southpole decided to enter — KENNY KHYM the midtier market via J.C. Penney’s David Khym and target a much larger customer ·· 6 WWD MONDAY, AUGUST 22, 2011 SECTION II WWD.COM WWD MILESTONES {Continued from page 4} recalled Khym. “Back then, if you sold lines between the urban, skate, street Merry-Go-Round, you were the toast and progressive sportswear sectors, of the town. Our product was unique where diverse brands like LRG, Stüssy, — we came up with denim sets with Levi’s, Rocawear and WeSC all com- velvet patches. This was something pete for a broad range of young cus- nobody had seen.” tomers. In fact, according to an NPD Fast-forward 20 years, and study commissioned by Southpole, the today among the key challenges for brand’s customer base is equal parts Southpole and the industry in general white, African-American and Hispanic, are rising costs for sourcing and pro- with each accounting for about a third duction, particularly the skyrocketing of sales.