Urban chic begs question: is fashion back at Kmart? - Apparel & Accessories - discount chain plans new fashion clothing lines

DSN Retailing Today, March 10, 2003 by Emily Scardino

Do Kmart's apparel brands address America's diverse range of consumers? Apparently, the answer is yes. As long as customers visit stores and purchase Kmart's clothing, there really is something for every cohort, in every category.

Or at least there will be by this fall.

Kmart's latest major brand rollout slated for back-to-school 2003, a young misses line named Thalia, will address a stylish younger woman that Kathy Ireland and Jaclyn Smith have neglected to varying degrees. It is true that over the past few seasons the two latter brands, in particular, Kathy Ireland, have gotten an injection of fashion, including hip leather and pleather jackets and pants, Calvin Klein-style matte jersey knits and appliqued attitude T-shirts. According to Kmart's Nick Just, senior vp and gmm of apparel, jewelry and drug store, both Kathy Ireland and Jaclyn Smith remain key in addressing every retailer's target shopper-the working mom. However, Thalia, based on the eponymous Latin American pop star's stylish image, will bring new opportunities to Kmart in attracting both younger and ethnically diverse women to the floor.

"Thalia is intended to round out our family of brands, which all remain important to Kmart going forward," added Just.

Not only is it a strong portfolio of brands, it is a strong portfolio of exclusive brands, intended to differentiate Kmart from its mass competitors and draw customers in, ideally helping to pull Kmart out of Chapter 11 status.

Exclusive brands are "key to our future," stressed Just. Kmart continues its strategy to carve out a niche for itself with a roster including Joe Boxer, Jaclyn Smith, Kathy Ireland, Route 66 and soon, Thalia.

Kmart's diverse spectrum of brands mirrors its multicultural customer base, which is also "a point of differentiation for Kmart, and we consider it a competitive advantage," noted Steve in ,senior vp of marketing at Kmart.

Of these brands, the one with the most visibility in Kmart's marketing programs is Joe Boxer, which, according to Kmart, sold more than $280 million worth of merchandise--dominantly in apparel-in 2002, the year of its back-to-school launch.

"[Kmart develops] brands and will continue to develop brands that appeal to customer segments that other discount stores or dollar stores can't get to," notes Greg Silverman, senior vp of strategy and research for Design Forum. Design Forum is a division of Omnicom Group, which collaborated with Kmart on its new store prototype currently testing in White Lake, Mich. "The results on Joe Boxer alone speak for themselves on how well that's done and is being extended," Silverman added.

The performance of Joe Boxer has inspired Kmart to keep looking for other new names to spark sales, an "on going initiative," according to Just. Kmart research early in the launch found that the brand, originally aimed at a young men's and juniors audience, had 87% brand recognition in all age groups, and the company has both used it to attract younger customers and made it a strong family lifestyle brand.

Joe Boxer has a high-end, department store heritage, one that the brand's owner, Windsong Allegiance Group LLC, is trying to maintain even as Joe Boxer remains a Kmart exclusive. The company recently held a fashion show in Bryant Park during Mercedes-Benz Fashion Week--in between the Donna Karan and Calvin Klein shows--to show off its underpants.

With Joe Boxer and Thalia, Kmart seems to have the bases covered in women's, men's and children's apparel and accessories.

Kmart was one of the first discounters to realize that prestige brands could attract a new spectrum of higher-end shoppers to the apparel department. Yet, it as been quite awhile since the grand dames of its apparel department, Jaclyn Smith and Kathy Ireland, have been emphasized in any significant way in Kmart's advertising. The retailer has a history of bringing in names, from Sesame Street, to, more recently, Disney, and then neglecting to tell people about them after the initial launch.

Aside from bringing entertainment licenses in and out of children's wear, Kmart's national brand portfolio has maintained its level. Kmart's private brands like Basic Editions and Route 66 dominate the floor in men's, women's and children's wear to varying degrees, alongside brands from vendors including VF Jeanswear and Sara Lee.

Does Kmart have enough good names to save its apparel department? The answer lies in both the product and marketing Kmart installs going forward. If Joe Boxer is any indication, the future looks brighter.