With her back to a room full of Kohl’s
department store executives in a Manhattan studio, Vera Wang reviewed
prototypes from an exclusive new collection of mainstream fashion that
Kohl’s plans to sell under her name. “This is all black,” said Ms.
Wang, dismissively. “Black is very ’90s.”
Later, Julie Gardner, a marketing
executive for the Kohl’s chain, described the meeting as an epiphany
of sorts — a moment when she realized that much of what she had
assumed to be fashionable was, in fact, out of date. “We were hanging
on her every word,” Ms. Gardner recalled. “We all looked down and we
were all wearing black from head to toe.”
Kohl’s, based in the pastoral haven
of Menomonee Falls, Wis., is a retailer that sells clothes to the
masses, a far cry from the trendy New York image of Ms. Wang, who is
best known as a designer of exquisite — and often very expensive —
bridal gowns. So aesthetic tension is to be expected. But with its
introduction of Ms. Wang’s new cut-rate collections coming in
September, Kohl’s has been uncommonly deferential on matters of style
to someone more accustomed to Madison Avenue boutiques than suburban
strip malls.
Even so, as it tries to recast itself
as a department store that offers not only affordable fashion but a dash
of style as well, Kohl’s intends to make Ms. Wang the public face of
its reinvention. For her part, Ms. Wang says that her relationship with
Kohl’s is more than a marriage of convenience. Like many successful
entrepreneurs before her, she has reached a crossroads: her business has
grown so rapidly and in so many directions that she lacks the resources
— especially cash — to keep expanding it on her own.
“I know actors always say, ‘I’m
just grateful that I get to continue doing what I love most,’ but for
actors their tool is themselves and their talent — designers need a
lot more help,” Ms. Wang says. “We need money. We need
infrastructure, design talent, promotional budgets. We need a lot more
to play in the sandbox, so to speak. Because of that, every decision I
have ever made has been motivated by staying alive and keeping the doors
open with the employees that I have.
“I’m not being overly
dramatic,” she adds. “I’m being really truthful.”
Given the disastrous performance over
the last year of Wal-Mart Stores’ version of
inexpensive designer fashion — with a collection called “George M.E.”
by the lesser-known designer Mark Eisen — the union of Kohl’s and
Ms. Wang is a gamble. But democratized style and cheap chic peddled by
famous names has already found a successful niche, whether it’s Martha
Stewart at Kmart or Isaac Mizrahi at Target. Long lines for the latest
Karl Lagerfeld, Stella McCartney or Viktor & Rolf designs at
H&M, or Vivienne Westwood shoes for Nine West at Macy’s, or for
offerings from budding designers making clothes for Gap and Uniqlo, have
helped midmarket stores increase sales and gain more cachet with
consumers.
On the other hand, there have been
notable blunders besides that at Wal-Mart, which said its weakness in
fashion had crimped its recent sales. Kohl’s itself made a modest
attempt to move away from its classic looks four years ago, but
customers balked at designs like moose-themed shirts. Sales of its new
cosmetic lines by Estée Lauder, repackaged as “American Beauty” in
Kohl’s stores, have disappointed analysts.
By making a long-term commitment to
Kohl’s, Ms. Wang may be navigating even more dangerous waters. Many
high-end designers fear that creating mass collections undermines their
prestige among affluent customers, a worry rooted in the classic example
of the downfall of Halston, the designer of sexy jersey gowns for the
Studio 54 set: in the 1980’s, luxury retailers dropped his collection
after Halston signed a deal for a cheaper line with J. C. Penney.
But Kohl’s and Ms. Wang are plowing
ahead — boldly so, by the look of their collection. Called “Simply
Vera — Vera Wang,” it includes the designer’s high-end signatures
(or what fashionistas politely call “directional” designs), which
may be challenging for a broader audience. Among the offerings are an
inky black jacquard bubble skirt with an elasticized hem ($98), a
charcoal knit cap the size of a chef’s toque ($25) and an ash-colored
ribbed wool coat with short sleeves ($128).
A short-sleeve coat? At Kohl’s?
Well, yes, says Kevin Mansell, Kohl’s president.
“When we launch these brands, often
there are questions either on the investor or media side of ‘How do
you know it’s going to be good?’ ” he says. “They say, ‘Vera
Wang at Kohl’s seems more of a stretch,’ ‘It’s the next step
up’ and ‘Why do you feel so confident?’ The reason is, we do a ton
of research.”
As negotiations over a deal with Ms.
Wang stretched out over more than a year, Kohl’s surveyed consumers
about their perceptions of the designer and their expectations for the
proper price and quality of her collections. “This is not like putting
up dartboards, throwing darts and seeing which ones stick,” Mr.
Mansell says. “This is really based on quantitative research.”
For Ms. Wang, however, it is also
about something much more personal.
“This is more about keeping my
business going so I can continue to do what I love most,” she says.
AT 57, Vera Wang has worked in the
fashion industry for 37 years — longer if you count her college
summers as a sales associate at Yves Saint Laurent on Madison Avenue —
first as an assistant and an editor at Vogue magazine and then as an
accessories designer for Ralph Lauren. She started her signature company
in 1990.
She grew up in Manhattan, in an
apartment on an expensive block of the Upper East Side. There, her
father, C. C. Wang, the son of a former war minister under Chiang Kai-shek,
who made a fortune in pharmaceutical sales to China, discouraged her
from pursuing a fashion career. After studying at Sarah Lawrence College
in Yonkers, N.Y., and at the Sorbonne in Paris, Ms. Wang asked her
father to allow her to take fashion courses in New York, but he refused.
“He said, ‘If you really think you’re that good, go get a job.’
And I did; I went to Vogue,” she recalls.
In her late 30s, Ms. Wang went to
work for Mr. Lauren and discovered that she loved to design. When she
spotted a woman carrying a plaid tote she had made, Ms. Wang said she
started “jumping up and down.” At 40, she married Arthur Becker, a
technology executive. Only then, sensing that Ms. Wang had demonstrated
that her interest in fashion was sincere, did her father agree to
finance her own fashion collection — with the condition that she
design bridal dresses.
“What I haven’t said before is
that when my father suggested that I go into the bridal business, I had
lost that desire really to go off on my own by then,” says Ms. Wang,
whose father died in September. “This had been a dream for me since I
lived in Paris, but my father wouldn’t do it. He wouldn’t pay for
it. He wouldn’t help me. I had been in the business 21 years by
then.”
But once Ms. Wang got started, she
quickly made her mark. She became widely known in the 1990’s for
modernizing bridal design, which had traditionally been dominated by
billowing poufs and antique lace and ignored by serious designers.
Sharon Stone and Mariah Carey have been among the brides in Ms. Wang’s
gowns, the most elaborate of which can cost $15,000 to $30,000. Jennifer
Lopez ordered a Vera Wang dress, but never wore it, during her derailed
engagement to the actor Ben Affleck, then borrowed another for her
marriage to the singer Marc Anthony in 2004.
Ms. Wang’s frequent television
appearances, often commenting on red-carpet fashion, as well as heavy
magazine coverage of celebrities wearing her gowns, made her a household
name and made her designs synonymous with stylish weddings. She
developed the core of her bridal business with slightly less expensive
dresses — the simplest currently start at around $3,000 — and a
lucrative roster of licensed products like china, crystal and bedding
that are geared toward bridal registries.
Last year, she says, products bearing
her name, including a successful fragrance, had retail sales of $300
million (although Ms. Wang receives only a small fraction of that
amount, probably in the range of 5 to 10 percent, through royalties).
But her real passion, on which she has focused for the last four years,
is women’s fashion — apart from bridal.
Her nonbridal aesthetic may best be
described as ballerina grunge. She is fond of intentionally frayed hems
and raw edges, and complicated silhouettes of slim bodysuits worn under
oversized layers of heavy knits. A professional ice skater as a child,
Ms. Wang later developed passions for art, dance and ballet that
routinely influence her work, with colors that are almost always
rendered in muddy, somber shades — in contrast with the cheerier
bridal designs that she felt had handcuffed her creatively. She once
designed an entire collection around the theme of the raw,
down-and-dirty HBO Western series “Deadwood.”
Ms. Wang says that her more recent
fashion endeavors have been much more expensive for her to finance and
support than her bridal line — it costs her about $10 million a year
to finance just the fashion line — and that is what led her into
Kohl’s arms. Sitting at a conference table in her design studio on
39th Street, near Seventh Avenue, wearing a jacket with inverted pleats
on capped sleeves, she speaks pragmatically about that decision: the
risk of devaluing her trademark was outweighed by the resources and
business expertise that Kohl’s brings to the partnership.
“I didn’t spend 20 years going to
Harvard Business School and then Morgan Stanley,” she says. “I spent
20 years styling clothes.”
From a branding perspective, Ms. Wang
has much at stake. In a recent survey of 1,500 consumers with an average
net worth of $3 million, the Luxury Institute, a research firm that
tracks designer brands, found that the exclusivity of Ms. Wang’s name
was tied with Hermès — a fashion house so prestigious that only its
best customers are invited to the seasonal sales that female customers
covet. (The survey did not take Ms. Wang’s deal with Kohl’s into
account).
“She has been very focused on the
high end for a long time, so it actually concerns me that she is doing a
Mizrahi,” says Milton Pedraza, the chief executive of the Luxury
Institute. “It may not affect the prestige of Vera Wang, but if
you’re a betting person, if a brand becomes ubiquitous, how exclusive
can it be?”
But Ms. Wang says consumers’ desire
to find better-designed fashion and home lines at mass retailers, fed by
media attention for lines like Mr. Mizrahi’s at Target, justified her
decision to design for class and mass. (A person familiar with the
Target design program said Mr. Mizrahi’s merchandise has become a $100
million business there.) Ms. Wang says she plans to use the proceeds
from her contract with Kohl’s to finance new stores for her signature
line in New York and Los Angeles, which she hopes will reduce the
possibility of a Halston-like fate.
Still, some fallout has already
occurred. Macy’s, a major Kohl’s competitor, carries several home
and intimate apparel lines that bear Ms. Wang’s name, aimed at the
upper echelon of department store customers and bridal registries.
Wanting exclusivity, Terry J.
Lundgren, the chief executive of Federated, Macy’s parent company,
dropped Ms. Wang’s lingerie line after she signed with Kohl’s.
(Alas, Mr. Lundgren’s wife wore a Vera Wang wedding dress down the
aisle in 2005.)
LINDA PAYNE, a 48-year-old nurse with
a Vogue-like sense of style, is ecstatic that Vera Wang is coming to the
Kohl’s store in a Paramus, N.J., mall. “I love Vera Wang,” she
said in a parking-lot interview outside the store. “Her gowns are
outrageous. My girlfriend just found one of her dresses on discount for
her daughter’s prom.”
But another customer, who would not
give her name as she headed into Kohl’s with a teenage daughter in
tow, perused a catalog of Ms. Wang’s clothing and deemed all of it to
be a bad fit for her.
“It’s too over the top,” she
said. “I couldn’t imagine wearing that in my construction office.
This is not ‘mom’ clothing. I would not wear that to work, or to a
P.T.A. meeting, so where would I wear that?”
Such is the finicky — and often
unpredictable — customer base that Kohl’s and Ms. Wang are trying to
crack. The partnership represents the first time that Kohl’s will
offer a product line bearing the imprint of a high-class, high-gloss
Seventh Avenue designer, and is the pièce de résistance of the
retailer’s image overhaul. While it has spent much of its
35-year-history courting middle-income Americans — and intends to
continue doing exactly that — it wants to give its customers a
broader, more stylized range of choices.
“We’re not going to be the person
to bring fashion first,” says Mr. Mansell, the Kohl’s president.
“But I think we can bring fashion very close after that and at a much
better value and in a much more efficient way.”
Selling fashion by a renowned
designer is a far reach for a mass retailer that, in the beginning, was
never supposed to sell clothes. Max Kohl, a Polish immigrant, opened his
first grocery store in Milwaukee in 1946 and turned it into the largest
food chain in Wisconsin. In 1962 — the same year that Wal-Mart, Target
and Kmart opened their doors — Mr. Kohl started selling clothes the
same way he sold food. Instead of finding a traditional department store
layout, customers found shopping carts, doorside checkout counters, big
price stickers on the racks and a wide circular lane at the center of
the store.
Today, Kohl’s offers more
sophisticated layouts and merchandising, and since 2002 has introduced
exclusive brands like Daisy Fuentes, Chaps, Tony Hawk and Apt. 9 that
speak to different demographics, like teenagers or working moms. But it
still is well aware of who shops there. Having closely monitored the
successes and failures of competitors banking on the prestige of name
designers, Kohl’s says it is sensitive to the perils of moving its
fashion threshold so far forward, possibly beyond the expectations of
customers who rely on it as a neighborhood destination for a quick
purchase of sneakers, a dress or everyday work-friendly attire
Still, the company says that survey
after survey has shown that its customers, who are increasingly fashion
savvy, adore Ms. Wang and expect more style and higher prices in a
collection she would design for Kohl’s.
The biggest challenge in designing
for Kohl’s, Ms. Wang said, was adjusting to the concept of producing
fewer styles in greater quantities. She is a perfectionist who has
occasionally tossed out bolts of extravagantly treated lace and chiffon
that did not meet her expectations. She and her design team typically
create 300 to 400 designs for a season but select only about 55 to
present to the media and to stores just before her runway show,
ultimately discarding the rest. It is a wasteful process, but one that
allows Ms. Wang to show only the best of her work each season.
For Kohl’s, her average monthly
delivery will consist of 20 pieces, which need to be mapped out months
in advance.
“I wasn’t used to being very,
very merchandise-focused — to have to choose and make the right
decision and then be able to put it back together on the floor as a
collection,” Ms. Wang says. “I couldn’t just say, ‘Here’s a
sequin dress and here’s a little short skirt.’ They would say,
‘You have five skirts, Vera,’ and then we had to choose together
which are the best five.”
Ms. Wang began meeting with a team of
Kohl’s designers in October, when she assembled some of her most
popular designs from previous seasons, her favorite handbags and her
jewelry collection. There was an oversize satchel made of white
snakeskin, and necklaces and charms with early Russian Empire and
Japanese influences. To brighten the line of black clothing that
Kohl’s designers had shown her, she persuaded the company to add some
more unexpected designs, like a skirt in gold brocade.
“Kohl’s went, ‘Yikes,’ ”
she says. “ ‘Vera, this is for nearly 1,000 stores. You can’t just
start throwing things in,’ like I do on collection.”
But in limited quantities, the skirt
was added, looking nearly identical to one shown in her fall runway
collection that will cost $890 when it arrives in stores like Bergdorf
Goodman and Louis Boston. The Kohl’s version will be $68.
For his part, Mr. Mansell is bemused
by any concerns that Simply Vera is “too fashion.” The bigger issue,
he says, is ensuring a proper balance of contemporary and classic
clothes.
“Kohl’s was way too heavily
weighted to very classic and traditional styling,” he says. “We were
doing a disservice to our customer because we were duplicating so many
things in either different brands and labels or at the same price
point.”
To make way for Simply Vera, Kohl’s
reduced its stock of labels with older names like Villager and Sag
Harbor, and it dropped the Norton McNaughton label.
Kohl’s leaves pricier megabrands
— Tommy Hilfiger, Ralph Lauren and Nautica — to traditional
department stores like Macy’s, Bon-Ton and Dillard’s. Mr. Mansell
says that the retailing environment is just as competitive and cutthroat
as ever, and that Kohl’s wants to remain out front.
Kohl’s has also benefited from the
troubled consolidation wave that has swept over American department
stores, high and low. The 2005 merger of Federated Department Stores and
May Department Stores, and Macy’s absorption of many historical local
nameplates, have turned off many mall shoppers. The combination of Kmart
and Sears has not done much for the image of either chain.
“Other than inflation, the pie
essentially isn’t getting any bigger,” Mr. Mansell says. “It’s
all market share and we are trying to attack market share wherever we
see weakness.”
Growth in Kohl’s sales, profits and
number of stores has coincided with the exclusive brands strategy. Last
year, sales were $15.5 billion, up from $7.5 billion in 2001. The
company’s profits more than doubled over the same period, to $1.1
billion from $458 million. It has also doubled the number of stores it
operates — to 834 from 382 — all at a time when overall clothing
sales have languished. Kohl’s may be smaller than Macy’s and J. C.
Penney, but by one closely watched measure in retailing, it beats both
of them. Last year, Kohl’s sold $224 for every square foot of space in
its store, compared with $171 for Macy’s and $166 for J. C. Penney,
according to A. G. Edwards.
“Kohl’s has built a significantly
better mousetrap,” says Bill Dreher, a retail analyst at Deutsche Bank
Securities.
Kohl’S also intends to increase the
size of its average sales transaction. Its five-year-old roster of
exclusive brands, which are displayed prominently in various
departments, now accounts for 8 percent of its annual sales. By adding
Simply Vera and a Food Network-branded collection of housewares this
fall, Kohl’s believes that it can increase exclusive brands’ share
of its sales to 10 percent.
“We get more visits to our stores
than our competitors, which is not surprising because they are more
convenient and closer to neighborhoods,” Mr. Mansell says. The average
sale is for $50, and about half of customers buy items from only one
department.
“A very small percentage of
consumers on a visit buy something in women’s apparel and, in the same
visit, buy something in women’s accessories,” Mr. Mansell says.
“And they’re right across the aisle.”
By placing Ms. Wang’s designs in
multiple areas of the store, Kohl’s wants shoppers to explore — and
shop — in more departments. Ms. Wang herself says she shops at
Kohl’s. She has two daughters, 13 and 16, who buy cargo shorts there
by the armload. “Listen, I’ve been in Sports Authority, P. C.
Richard’s and Barnes & Noble,” she offers. “That’s my other
life.” Prices for luxury fashion keep going up, to the point that Ms.
Wang said it is a major achievement to sell 250 pieces of any one style
from her high-fashion collection.
She says that “$3,000 is the new
$1,000, and $6,000 is the new $3,000,” adding: “Actually, maybe
$10,000 is the new $3,000. The truth of it is, it can be very
frustrating when you have built up some degree of a name in this country
and not be able to dress more people.” -
2007 June 18 NEW
YORK TIMES by Eric Wilson and Michael
Barbaro
