As retailers report, denim sales on average have been flat against last year. While most believe premium is past its peak, new colors and finishes are driving sales and may indicate potential for growth. We asked a few heavy hitters to weigh in on what’s working.
How’s the denim business? What’s selling?Stuart Millar, G-Star: Denim is strong and has been constant. The main volume comes from denim priced at $160 to $190 retail. Our signature style is the 3D Arc fit ($170 to $190), which we also make in colored denim and chino. And the success of our newer 3301 Basics line has led us to expand the styles and washes we offer. Straight-leg fits are driving sales in men’s, along with shades of khaki, gray… the typical market colors. There’s an emphasis on colored denim and variations of black.
Tony Chu, Hudson Jeans: Our year-over-year growth doubled from 2010 to 2011, and we’ve expanded our men’s offering to seven fits in 20 fabrics. Bestsellers are straight and slouchy-skinny cuts, but we also do well with an athletic fit, especially in a 37-inch inseam. We’ve always been a fashion basic, never “blinged out.” Colored selvedge in olive, brown and gray-black are doing extremely well at around $240.
Sam Ku, AG Adriano Goldschmied: Our current design focus is finding the right fabrics and washes. Guys want the “raw look” but actual raw denim is hard to care for; it’s a very small percentage of our business. We’re known for our comfort and our specialized washes. There’s also more embellishment this year, but still far less than two years ago. The sweet spot is right around $168 to $172.
Khakis and slim shorts in charcoal, sand, camel and black have sold well; jean shorts for men don’t really work…unless you’re a hipster or a dorky cowboy. We’re also experimenting with new non-denim fabrics: for fall ’12 we’re trying a thicker cord.
Tell us about some of the new technologies being used in denim production.Chu: Raw denim is so popular because it allows a guy to create his own one-of-a-kind finish. It will end up looking different if he’s a plumber versus a teacher, if he carries his wallet in his front or back pocket, etc. This usually takes about three to four years, but our new Turbotech treatment (developed by iSCO in Turkey) allows it to happen in three to four months.
The hang tag will illustrate the time lapse, and it’ll come with several different “recipes” for creating unique washes. We’re also producing a video that follows influencers (like Phillies centerfielder Shane Victorino and Mitsu Tsuchiya of Nylon Guys) to see how their denim evolves.
Ku: New state-of-the-art laser technologies help us create vintage references. One technician will spend anywhere from 30 seconds treating basic jeans, to 30 minutes on a high end denim jacket that will eventually retail between $300 to $400. We also run finished denim through an ozone generator, which keeps the dye from bleeding and keeps the pockets bright white. But many of our treatments are still done by hand because we think it produces the best results. Depending on the particular style, our denim is hand razored, hand sanded, finished with hand-molded wrinkles and then heat set. This 3D ageing [done on inflated balloon mannequins] is definitely an advantage over our competition. We’re also trying to be more eco-friendly, so we recycle any leftover fibers, and we’re using more modal, which takes 10 times less water to produce than cotton.
Consumer interest in American-made products seems to be on the rise. What are some other advantages to producing denim here in the U.S.?
Chu: All production is done within a 10-mile radius of the Hudson offices, so design and quality control staff can constantly monitor the progress. We’re able to deflect price increases by making our processes more efficient, and a small company that’s privately owned, like ours, can react more quickly to changing trends.Ku: Since we employ 1,000 workers in L.A., we’re keeping jobs here and aren’t influenced by rising Chinese labor costs. Koos Manufacturing is vertically integrated, so every step, from design through production, is all done in the same facility. This means our designers can test out their ideas with the technicians upstairs, to fine-tune every fit and finish. We make about 500 SKUs per season and most orders can be processed and shipped within one week, a much quicker turnaround than if we produced overseas, and of course we can guarantee the quality.
How have flash sale sites and your own websites affected your business?
Chu: Vendor e-commerce is a win-win. The more demand we can drive for the brand, the better our window to the world.
Ku: We do a small portion of our business with discounters; that’s never going away. But Gilt and HauteLook are different—being associated with them is a good thing. We never offer styles that retailers are currently carrying at full price. Our own internet business grew 60 percent from 2010 to 2011, and at the same time our sales on ShopBop, Piperlime and Revolve all increased. So it has only been good for the brand.
What about competition from your own branded stores?
Ku: AG has 11 full-line stores and two outlet stores, and our Japanese distributor is opening a Tokyo store (our first internationally) this month. Our web-based and brick and mortar retail partners are all still doing extremely well with the brand and there haven’t been any complaints.
Millar: Distribution builds brand awareness. The person who shops at Nordstrom may not be the monobrand store customer. But the presence of the monobrand store will bring more awareness to that consumer. Currently our stores are 60/40 men’s to women’s, but we do hope to make that 50/50 at some point.
What are some of the challenges in marketing denim to men?
Chu: Now that jeans are so appropriate for so many situations, guys are willing to spend. (But they also have no problem wearing the same pair everyday…) The best thing you can do is offer a product that makes his life more efficient and makes him cooler, with a consistent fit experience.
Celebrity is less influential for them. They need to either discover a brand on their own or hear about it via word of mouth from a credible source. We’re also trying to harness the power of social media. It’s not about getting 1,000,000 friends or telling everyone how cool you are, but about letting your customers talk, and being engaged and responsive.
Ku: Men care about two things: looking good and being comfortable. So we try to produce the most flattering fits, and for softness, we wash 99 percent of our garments before shipping. We’re also using more Lyocell blends and soft cords and twills from Japan.
What can retailers do to improve their (and your) denim business?
Ku: With khakis the presentation doesn’t matter as much, but denim must be laid out so customers can see the wash, the details, the fit…folded and stacked is no good.
Millar: We believe in a “Buy Now Wear Now” strategy when it comes to product and merchandising. We were influenced by [the concept behind] Zara and H&M, and invigorate our stores with fresh product once a month. It keeps customers coming in to check out what’s new. G-Star has one million pairs of denim in stock and can ship replenishment product to retailers that will arrive within four or five days.
Chu: We take our retail marketing very seriously and think that communicating with the sellers is key. So we love to collaborate with retailers on seminars to educate the salespeople on fits and quality, and especially get them into the product. I also think it’s crazy to give your buyer a million dollar pen and not pay for them to go to the trade shows! Seeing whose booth is buzzing is a completely different experience than looking at a line in a showroom.