NATIONAL: The department store wars have moved into new territory - with menswear missives now being launched by Australia's two leading competitors.
David Jones has announced an exclusive brand agreement with Industrie, an Australian youthwear brand which generated $35 million in annual sales through Myer. The announcement came just a fortnight after Ragtrader reported Myer planned to shake up its menswear offering with three new labels including an exclusive range by designer Wayne Cooper. It is understood youth brand Ben Sherman and men's business label Rodd & Gunn have also joined Myer's menswear ranks.
Prior to its exclusive arrangement with David Jones, Industrie was a successful fixture of both department stores. According to sources, the brand traded at significantly higher margins than David Jones' target of 39.5 to 40 per cent for its category and also represented Myer's largest menswear offering.
Industrie managing director Nick Kelly said his decision to align the brand with David Jones was in the brand's best long-term interests, particularly under current economic conditions.
"Both department stores were presented with my concerns [about] retailing obligations and the potential saturation and discounting of the Industrie brand to drive traffic. David Jones has a long term approach to Australian retailing. It is constantly creating reasons other than discounting for the customer to visit and purchase goods from its stores."
Kelly said the move away from aggressive discounting would also mean some "real breathing space" for the brand's independent clients and network of 33 retail stores.
"This segment of our distribution which includes our sales agents has been incredibly loyal to me personally and to the brand and we all need to get through this challenging economic period together."
A report by Macquarie Research Equities noted the agreement would be equally beneficial to David Jones, with trade feedback suggesting its menswear category was underperforming. Positioned at the value end of the market and targeted at men aged 25 and over, Industrie would help to draw new consumers with a more competitive price offering to other youth brands such as FCUK, Nudie and Lucky.
The report claimed David Jones' youth segment had grown more than 60 per cent annually over the past four years and now accounted for nine per cent of overall sales. In addition to its menswear component, Industrie would soon launch a tweens range through the department store targeted at consumers aged between nine to 13 years.