The Kids Are Alright

I love the kids’ business. Not only can it be imaginative and colourful but it is such a positive and cheery aspect of any retail category, but especially apparel. As a parent, I know I enjoy dressing the kids up (while we still can) to make them look handsome or pretty or cute or wholesome or whatever. The price tags don’t necessarily matter until they are old enough to want things for themselves. Then, mysteriously, all of a sudden a light switch goes on and price and usage become the be all and end all. This takes us into the “tween” and “teen” phenomena, which are less than thrilling from my perspective.

But mostly, a kids-only apparel store is a happy place to shop, work and create. Take, for example, the ultimate kids emporium babyGap and to a certain extent Gapkids. BabyGap especially has stayed true to its brand by designing and merchandising unique, cute, wearable, slightly higher end baby clothes. They are by no means the most expensive but one could argue it is the most premium of any of Gap Inc.’s brands. Gapkids has come upon some major competition in recent years and has had ups and downs but is still a fun place to shop. Gymboree, Children’s Place, babystyle, Jacadi, abercrombie, Crewcuts by J. Crew, AE77 (American Eagle) and every other national retailer also loves the kids business. H & M and even Zara have launched kids businesses as well.

I have to say I am partial to higher end kids retail as well those that target the 0-8 year old. During this time, price seems to be no object (especially with all the grandparents out there) and usually, the child has yet to really have a say in how they look (or at least can be easily persuaded one way or another!)

I recently came across a neat little shop called “Peek…aren’t you curious”. They have barely 5 stores in California and Arizona and have a distinct point of view – let’s call it “high end beach”. But what is distinctive about it is the fact that the national brands that are represented are fairly obscure, and pretty expensive. But the stuff is outrageously cute merchandised in a very friendly, open environment.

What caught my eye are their walls. They are adorned with the cutest quotations regarding children, and their personalities. My favourite poem of all time “When You Thought I Wasn’t Looking” by Connie Back (it will make your eyes well up every time – I promise) was stenciled, in its entirety, on the wall along with other quotations from the likes of Emily Dickinson, Pablo Picasso and A.A. Milne. I asked about the poem and the manager produced a photocopy of all the quotations for me to take home. Nice touch.

If you believe that the kids are our future, then wouldn’t it also portend that kids retailing also has a robust future?

TheRetailTherapist

Staying True

“Sticking to one’s knitting” has always been an axiom in our retail world. We can count on one hand how many retailers have been able to completely re-invent themselves and become more successful. Once dormant brands have been ‘re-resuscitated’ such as Banana Republic and Abercrombie and Fitch. Mostly though, brands and concepts have been ‘refined’ along the lines of Target, J.C. Penney and even Victoria’s Secret to match the customer’s demands for change but all the while remaining essentially what and who they were before.

One example of a ‘re-invention’ gone sour was when Gap decided to rid themselves of all their basic commodities and become a young, hip source for fashion, earlier in this century. The chain dropped 25% overnight and hasn’t fully recovered since. Any other success or horror stories of re-inventions out there? I would love to hear them.

In a recent outing at the mall I was struck by two retailers who have been hot lately and are taking slightly different approaches in this tougher environment. Anthropologie has honed in on the 20-30+ year old women who love the thrill of the treasure hunt, when looking for either something to wear or something with which to adorn their residences. They are unique not only in their approach to the theatre of retail (with their elaborate visual changes every quarter in every store) but their ability to create branded labels out of their own private labels. They have been consistent in this approach with their merchandising, staying true to their customer and not wavering from their core formula.

J. Crew has been another fabulous success. What Mickey Drexler and his team have done with that brand and those stores is nothing short of remarkable. They have extended the brand to wedding gowns, suitings, kids clothing and additional accessories, while, for the most part, staying true to the original premise of well made, preppy/fashionable weekend clothing for the young at heart. However, I hope the latest store set up is not indicative of a change in direction.

At the front of the store, were mannequins lined up with quite dressy looks in metallic fabrics in quite hideous mustard and gray colour combinations. It was not pleasing to this eye when walking in the door. It did not seem to fit what the general premise or direction has been for the past number of years. Maybe it was an aberration and it will change in the next few weeks (if it hasn’t already) but the point is, especially in these uncertain economic conditions, the customer must feel their favourite stores are familiar and trustworthy and must not stray from them in their time of need.

Staying true is difficult especially the more success one garners and especially in the “fashion apparel” business. But the customer must be able to recognize who you are and what you are offering as that is how they, in part, tend to define who they are and what they should look like to the rest of the world. A very important facet to keep in mind in any retailer’s strategic planning session.

TheRetailTherapist

Lulu for Lululemon

You never know when something is going to click. An out-of-the-way location on Queen Street (very) West of most of the action, turned into all the rage in a city, like Toronto, that was obviously craving one. My Wife, my Mother, you name it, had to take an extra hour or so to shlep out to this undersized, over-assorted hole-in-the-wall store that sold yoga inspired activewear. The fabric was nice, the fit was oustanding (especially on fit women), the colours appropriate and the prices high. A perfect storm erupted. This Vancouver based chain had barely 5 stores at the time, a very haphazard expansion strategy (territorial rights, internet rights and U.S. continental rights given out like gift with purchase schemes) and yet had hit on exactly what women were looking for.

This is barely 5 years ago. Today as a public company, it has a market capitalization of $2.2 billion. What the heck gives any more?

Most retailers are scraping and clawing, discounting and promoting to retain market share (let alone gain it!). Yoga inspired clothing has been around quite a while already with Danskin being the first and most popular (although coming out of the dance industry). Several others have been around just as long albeit more from a wholesaling standpoint with the exception of Portland based Lucy, which started on the web and then morphed into a bricks and mortar retail concept. What makes people go crazy for Lululemon as opposed to any other concept out there (maybe with the exception of Aritzia – from Vancouver also – and Buckle – from Nebraska of all places ?

It is hard to say and I have been at this a long time. The stores are not well merchandised and lack strong visual presentation. The product designs are quite nice and the colours and fabrics are rich but not overwhelmingly so. The staff seem nice and pleasant but not much different from the typical mall fare. The branding is not slick and is only promoted on a grass roots basis through yoga instructors, personal trainers and community initiatives. The pricing is premium so it doesn’t seem as accessible as it could be. So, what is it?

If you have any answers I would love to hear them but they have certainly created a large devoted following. They appeal to a range of ages and are even sprucing up their men’s assortment (which sorely needed it). They have opened as many as 60 stores now in Canada and the U.S. and are no means ubiquitous, which no doubt helps their productivities.

But if I were to think about it for a while, I believe there may be two main success factors: The logo identification is strong (a stylized horseshoe of sorts) and is strategically placed on each garment for maximum exposure without feeling you are a walking billboard (like you feel while wearing a Roots garment for example); and secondly, its approach within each community has resonated with its clientele. It has been subtle and supportive and they work hard at keeping their authenticity in tact, even as their market cap heads for the stratosphere. They have yet to advertise in any meaningful way and keep building their brand one fitness/yoga instructor at a time in each community in which they open a store.

It has been a wild ride since the private equity players invested in the concept almost three years ago. But their clientele could care less about those things. Their customer base only cares about whether they have the latest merchandise in their size and how good it looks on them. Word of mouth is any brand’s most effective means of marketing and communication.

These fitness buffs must also be expert socializers for the concept to be as popular as it is today. The gift of the gab has made Lululemon one of today’s most popular retail brands.

TheRetailTherapist