Courting sportswear - discount stores, clothing, marketing

DSN Retailing Today, May 8, 2000

New Jersey resident Beth Klinck was a dedicated Macy's shopper. When a Kohl's and a Target opened in her area, she shopped for outfits for her 10- and 6 year-old daughters. She came home with a casual outfit for herself. "I was shocked at the fashions at Kohl's and Target," she says. "It wasn't what I expected."

These aren't your parents' discount stores.

Nudged to improve by the success of The Gap, Old Navy and the new U.S. invader H&M, mass market retailers are sprucing up their selections of khakis, coordinating tops and other casual pieces.

Revamping styles also comes at a time when casual workdays have rewritten the career-apparel business. "Consumers need more casual clothing today, and they aren't always going to pay top dollar at department stores," explained Wendy Liebmann, president of WSL Strategic Retail, a retailing consultant.

Also, Americans today want less fuss from their clothing. "I'm seeing a general direction toward a casual-lifestyle approach," says Hector Torres, merchandise manager for VF Jeanswear. He says that translates into wrinkle-free looks or softy-washed treatments. The looks can be found in mass as fast as in class, he adds.

Initially, discounters captured leading share of the jeans business at the expense of competitors. According to figures from NPD, discount sales of jeans jumped seven percent for calendar 1999-a significant gain given the tier's already dominant position in the marketplace. In comparison, department store denim sales dropped more than 10 percent.

Buoyed by the success in denim, mass merchants have unfurled major efforts to grab more casual market sales with a two-pronged approach incorporating brands and private labels.

Torres sees tremendous potential in mass. "Forty two percent of jeans are purchased at discount, while only 20 percent of khakis are purchased there. We feel we can capture these consumers because they are confident in the denim they purchased. They trust our brand and look. Our goal is to build khaki as a destination with our core brand-then to build incremental sales, get sell through, and stair-step up customers."

Efforts are paying off. NPD finds mass merchant sales of casual slacks rose a whopping 28.8 percent last year. Department stores sales also significantly increased.

Admittedly, it hasn't been an easy task for mass marketers to convince shoppers they are on trend. "This is really something we've been undertaking for several years," says Skip Chustz, senior vice president and general merchandise manager for ShopKo. ShopKo revamped its entire merchandising philosophy a few years ago to create its offering based on lifestyle trends. Some categories were edited down, such as work clothes, to make room for lifestyle presentations. The result is double-digit sales gains in casual apparel, says Chustz.

Chustz attributes the growth to customers who have been comfortable with denim at discount, which are now adding khakis. He credits VF's Timber Creek with helping change consumer attitudes. "But, we're not done growing in this area," he promises.

Target is another success story-but its mantra has been to deliver stylish clothing under house brands. Always a trendsetter, Target is currently showing long skirts and stretch knit dresses under its Merona brand. The company has raised the stakes by licensing Mossimo, a brand that was a major player in the department and specialty store markets until recently.

Kmart is taking its own road, too, with more emphasis on Route 66. "The casual business has always been important to Kmart, but it currently is expanding by incorporating new fun, young looks into the mix," says Cindy Sapienza, vice president and general merchandise manager. Kmart execs believe Route 66 is courting away customers who frequented department stores. Realizing these customers want more than straight rack or rounder presentation, Kmart has added more four-ways and displays that house complete outfits. Soon, Kmart will start rolling out a revamped men's wear department based on lifestyle merchandising. The newly repositioned Starter line (formerly a department and specialty store brand and now available at mass) and an expanded Route 66 assortment will be a focal point of the area. In women's, Kmart is improving presentations of hot items, such as knit tops and capris.

Wal-Mart is making a statement with White Stag and Bobbie Brooks--two venerable names--in looks appropriate for casual or work.

Meijers has jumped onto Chic's wrinkle-free, now a VF property in its stores. There's also a wealth of brands mixed in with house labels, such as Whitefish Bay.

Courting the casual customer--especially one who hasn't always shopped mass--requires more of a commitment, according to VF's Torres. Right now he feels there are three stories that must be told. One is wrinide free, the second is softly washed and the third is a wrinkle-free, more dressed-up look. "The last two are newer and less fully developed-not every discounter is going after all three styles yet." He sees the market heading toward a dress/casual combination of cotton related products combined with synthetic fibers, a trend already established in department and specialty stores. "This is the newest trend for the mass market. We're going after a little dressier market, with cotton microfiber, cotton tencel and cotton/rayons," he says.