Fleece flowers in new ways: chains seek margin in heavier weights, house brands - discount stores

Discount Store News, July 15, 1996 by James Mammarella

NATIONWIDE DSN REPORT - Business is not booming in fleece, whether measured by volume or margin. Retailers are taking various approaches to this key casual apparel area.

"Fleece is a commodity, driven by need," said John Lupo, senior vp, gmm of apparel at Wal-Mart. "I think it's purely down to weather." He said sales growth has been less than spectacular over the past several seasons.

While Wal-Mart is sticking with its huge 7-oz. branded assortment, other chains are deploying a variety of strategies to differentiate and chase better margins.

At Wal-Mart, the mix is made up of Hanes in women's and girls' departments,with Jerzees the key commodity line in men's and boys'. In addition to these 7-oz. programs, Wal-Mart uses a heavyweight program for men's by Fruit of the Loom under the BVD brand name.

The chain is also testing fleece under its proprietary Faded Glory denim lifestyle label.

At another part of the spectrum, upscaling regional chain Bradlees has decided to drop the major brands in fleece altogether. It is also staking out an extreme position in private label. While some retailers source their house labels from the major rivals to Hanes and FOTL, such as Russell or Tultex, Bradlees is getting product from much smaller vendors to obtain a mix of 80% basics and 20% fashion fleece.

The 124-store chain is using its Exchange Unlimited house label as its fleece brand. Exchange Unlimited is coming forward as the denim lifestyle label for Bradlees, and fleece is a natural complement to denim.

Celia Clancy, senior vp, gmm for women's and juniors' apparel, said Bradlees will offer only 9-oz. fleece in an 80%/20% cotton/poly blend. The whole line will provide better value to the customer willing to pay from $2 to $5 or more above commodity fleece prices.

" Exchange Unlimited will have more needle, not a raglan sleeve, but a set-in," she noted. "And better silhouettes."

The fashion segment will be a direct import program spearheaded by vp of product development Carol Reed. The look calls to mind offerings by Limited or Express, with deep colors and richly embroidered multicolor trims or an Exchange Unlimited crest.

Clancy said there will still be jog sets and related separates from outside sources, but such items have been downtrending. "We've eliminated a lot of categories storewide that didn't perform," she explained. "Some of the fashion fleece styles looked old, so we're responding to the trends."

Due to the demand on the consumer to invest more per item in a less than coast-to-coast label, Clancy expects volume to be down for fleece this fall and revenue to be down or flat. The point, however, is to build the brand for the long term, Clancy said.

"If the trade-up is to be a success," she said, "we have to be serious about how we nurture this business."

Other regional retailers, including Pamida, ShopKo and Venture, have traded up their fleece assortments toward a higher proportion of 9-oz. product and have added in private labels where feasible.

Another option for mass merchants is to use an insurgent brand for differentiation. For example, Brittania is providing a basics fleece program, manufactured by Tultex, for Kmart, Hills and California's Fedco chain. The increased visibility of the Levi's parent brand on Brittania hangtags is likely to add some impact for sell-through at these chains, although the primary issues in fleece are quick response replenishment, durable quality and an on-trend color palette.

Target is one chain with an already strong private label fleece program in Pro Spirit. While mass merchants typically use private label to provide basic and fashion casual fleece sportswear, Target's product development staff teamed up with Tultex to romance Pro Spirit into a well-performing activewear/body wear line as well.

By contrast, Wal-Mart's experiment with L.A. Gear bodywear seems to have run its course. Across the parking lot, as Kmart reinvents itself, look for sharper definition in the Kathy Ireland private label bodywear line.

To build up their casual programs in the activewear arena, discounters in general spike their fleece and jersey mix with team licensed sports goods and sporting goods name brands such as Wilson (licensed to FOTL), Spalding (licensed to Sara Lee), Rawlings and Everlast. Some regional discounters have been fortunate enough to obtain brands like Nike and Reebok, but this is decidedly exceptional.

In the casual fleece selections, entertainment licenses are more important, especially when they achieve broadly popular status, as properties like Space Jam and 101 Dalmatians are expected to do during the third and fourth quarters this year.

The underlying fashion component is color. "We see brighter colors in demand for this Holiday season," said Susan Rector, director of merchandising for the Wilson brand at FOTL. "Jewel tones like eggplant and green, as Well as Atlantis blue will be key; colors will be very bright for spring, too."

Zippers are another fashion direction for fleece, one that Caldor is testing aggressively, particularly in juniors.