Retailers told to get with the times
Speaking at the L'Oreal Melbourne Fashion Festival business seminar earlier this month, the former CEO of Liz Claiborne Inc said a diversified portfolio of brands was now essential for high volume fashion companies.
Paul Charron, who transformed the American lifestyle company from a four brand operation in 1994 to 43 brand empire in 2006, claimed that in an environment dominated by cross channel shopping and diminished brand loyalty, variety was the s"Years ago in a simple world we, and others, defined a way to sell the same brand and the same offer to every retailer. That aspiration is no longer viable."
Positioned across the womenswear, menswear, accessories, homewares and activewear categories, Charron said Liz Claiborne has tremendous flexibility to adapt to market changes and expand as new demographic segments emerge.
He said when the company purchased Prana, an activewear label based in the US, in 2005 it allowed Liz Claiborne to address the large growing segment for active apparel and accessories, offered brand and channel diversification and enabled it to build new partnerships with various retailers.
"Liz saw the opportunity to use its infrastructure to enhance product manufacturing, processing logistics and administrative capabilities.
"This approach to providing branded differentiation while capturing back-end synergies has served Liz Claiborne rather well in an era of unprecedented retail consolidation."
He said companies interested in acquiring labels needed to ensure three factors: the new acquisition complemented the business's overall portfolio, that it generated a relatively fast financial return and that it provided manageable, executionable risks.
"The way to mitigate risk is to have a really powerful base of knowledge about the category as we did in 2000 when we purchased a [now successful] brand out of bankruptcy," Charron said.
Charron also said it was also important companies did not overwhelm acquired brands with their "corporate culture".
"Generally we leave the fundamentals of these businesses alone. They are not necessarily the best strategists or big
For more on the subject turn to page 15 of this edition.