William McComb: What’s the New Look for the Fashion Industry?

– There were a few, what I’ll call, truths that we put at the center of our thinking and that actually drove
our strategic thinking. One was, that the best value
created for shareholders was coming from those
that had strong brands and enjoyed strong direct
consumer relationships. Not relationships disintermediated
by wholesale partners. Creating a company in a
culture that was back to the origins of the Liz Claiborne company, which was all about
brand, became our focus. But equally important
was that DTC component. Being able to pivot the company away from just the wholesale channel, to be a true multi-channel retailer, including opening our own retail stores and enjoying a strong
presence as a marketer and a commercial player on the web, became central to what we were doing. With that as well, came the realization that we didn’t have enough resources to adequately focus on 46 or 47 brands, but we needed to focus on those that had the best possible DTC future. We also wanted brands that had the potential to go around the world because globalization has definitely impacted the retail world as well. Luckily we had a portfolio
of 46 brands to choose from. We spent the next eight
years dieting off brands that had potential, but not
necessarily the kind of returns or cost profiles that we were looking for. In some cases we had to
rehab some businesses. We needed to fix their
distribution partnerships. We needed stronger designers
or better branding. Then we had the opportunity
to actually sell or out-license those businesses. Aiming to fix our balance sheet, so that we could shore that up, so that we had the strong
resources that we needed for the few businesses that
we ended up taking forward. What we did in the case
of both Kate Spade, and Lucky Brand Jeans, and Juicy Couture. Those were the three brands that met the, out of all of the 46, that met the criteria of
having high growth potential, of having the attributes
of an enduring brand, and highly differentiated brand, and having the ability
to go around the world. Also, what we call multi-category. Lifestyle brands, not tied
to one product category, but could be, could
dimensionalize the brand idea across a number of product categories, such as accessories,
apparel, home products, and other lifestyle products. So we chose those three
and we deliberately chose to continue selling in wholesale, but at a dramatically lower level, and opening a significant
number of retail stores. In all three cases, we opened
hundreds of retail stores, we took them around the world, and we built very successful, strong direct relationships on the web. I think that the race to the
bottom is only getting faster in some ways, for the value segment. I see the middle continuing
to, what I’ll call, evaporate. I see mid-tier priced brands actually competing at a lower and lower level. But I actually see the high-end actually kind of staying
on the course that it’s on. That it’s highly differentiated, and there are fewer players in it. The barriers to entry
there are very very high. But I think the biggest trend, if I were going to call it out today, over the course of the next 10-15 years, it would be in that whole
discussion of media and eCommerce The penetration of eCommerce, what the customer interface looks like, both, not only with mobile,
but even with a desktop, and the merging of brick
and mortar with technology. And the role that, I think
that generally speaking, stores aren’t going to go away, but I see them getting smaller. There’s probably too much
square footage out there. Retailers have the
opportunity to use technology to make a sale with fewer actual items in the store. To sell a broader range
of goods in a smaller box. I think this is the trend I’ve been seeing and calling out for the
last four or five years. But you see funny things,
like Amazon opening stores, and Bonobos opening
stores, and Warby Parker, you know, digital natives, opening stores. They’re not going to become
big time, big box retailers, but that just goes to show
that the blurring of the line, at the end of the day, is
a win for the customer. If we really are channel
agnostic and follow the customer, I think that those are the
trends that you’re going to see.

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