Mexx makes move to America: Claiborne opens first store in NYC

DSN Retailing Today, Oct 13, 2003 by Emily Scardino

NEW YORK -- Liz Claiborne Inc. took a major step toward securing its future in the red-hot, Euro-styling mass fashion sector last month with the opening of its first U.S.-based Mexx store on New York's 5th Avenue. The store is the first of three units scheduled to open in Manhattan by the end of the year.

Although new to the U.S. market, the concept is anything but new to the rest of the world. Since it launched in 1980 as a Dutch-owned and -operated chain, the company has grown over the course of two decades into an 870-unit chain spanning Europe, South America, Canada, the Middle East and Asia.

Today, some two years after being bought by Claiborne, the Mexx brand is at the top of its game. Though U.S. plans call for selling the brand exclusively at Mexx stores, Mexx-branded apparel retails in some 7,500 stores in 40 countries around the world, with projected 2003 sales of more than $700 million. This figure has doubled in the past two years under Liz Claiborne management, and now the brand is one of the largest in the company's portfolio, second only to Liz Claiborne in revenue.

Although originally picked up as a way of adding "valuable geographic and brand diversification to [the] portfolio," according to Claiborne ceo Paul Charron, Mexx is now ready to take on the rapidly growing U.S. appetite for an affordable high-style look. Positioned somewhere between Zara and Express in price, and H&M and The Limited in style, Mexx could help Claiborne capture the stylish young customers it has been avidly pursuing.

"We see this as an opportunity to leverage our brand to attract American consumers with a concept that has already gained a loyal following globally," said Amy Schecter, vp and gmm of Mexx U.S.A., in an interview with DSN Retailing Today.

Liz Claiborne's brand portfolio, which has been expanding rapidly over the past few years, has successfully nurtured names such as Axcess at Kohl's and bought lines--including Juicy Couture, a high-end loungewear line--to target young customers.

"The Mexx brand is a great complement to Liz Claiborne's other brands, which tend to skew older and are perceived as more traditional," Schecter said.

Another European fashion import that has successfully attracted young customers and likely prompted Liz Claiborne to bring Mexx stateside is H&M. The Swedish retailer has gone from zero to 64 units ill a matter of two years.

In fact, a 35,000-square-foot H&M store happens to be right next door to the new Mexx. Apparently, Claiborne feels the younger, hipper Mexx will better compete with its Norse neighbor than its Liz Claiborne store did in the same location.

There are many parallels between Mexx and H&M, especially in terms of consumer demographics. Both target 20-and 30-something women's and men's wear customers. At H&M, women's merchandise dominates as at Mexx, where it stands at about 75% of the assortment. As H&M features a juniors assortment alongside more conservative career offerings, Mexx has an XS line for juniors, that is faster trend-wise, comprising about 10% of the assortment. Like H&M, Mexx offers a line of established exclusive fragrances and lotions, and a broad assortment of headwear, fashion jewelry and other accessories.

Overall, Mexx is more conservative, with a section of all-black clothing, a better make, and higher price points to match--wool blend sweaters come in at $69.99 at Mexx versus acrylic sweaters for $39 at H&M.

"Our prices are about 20% less than at Banana Republic, for an offering of fashionable classics that can be worn for more than one season," added Schecter. "We're not selling disposable fashion."

'Disposable fashion' is often used to reference H&M's assortment. Mexx is still chic, but not as cheap.

The Mexx store design is also class versus mass. It looks more like an A/X (Armani Exchange) than big-box H&M, with slate flooring, yards of gleaming glass, wood and metal fixtures and soft lighting. Details like free water and candy in the spacious dressing rooms enhance the atmosphere. The store also features stylish modern lounges, including a CD station with headphones, shag throw rugs, and flowers, "to make it a high-end shopping experience," noted Schecter. Lifestyle merchandise, including candles, books, and home decor items, also differentiate Mexx from H&M.

To keep this merchandise flowing, Netherlands-based Mexx has a sourcing advantage H&M does not. Liz Claiborne has vast U. S. manufacturing and distribution networks that it can leverage on behalf of Mexx. This will allow it to expand at lightning speed across America relative to its competitors if the Mexx concept hits home. If it does, Mexx will help Liz Claiborne corporate strengthen its niche as a mall-based specialty retailer.

As noted, Liz Claiborne is already opening two other Mexx stores in the melting pot of New York before the end of 2003. First, a 10,000-square-foot unit formerly occupied by The Wiz in Union Square, which will be promoted with a live music event when it opens this October. A splashy marketing campaign for the 5th Avenue store included a contest, in which a couple won the chance to grace a Mexx billboard in Times Square The third store, half the size of the Manhattan stores, will open in The Westchester Mall in White Plains. There, Claiborne can get a read on how Mexx plays in the suburbs.