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During the past 20 years, the author has watch China move from being a developing country into an industrial superpower
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Get Four
|  | MAY 17, 2005
By David Kiley and Robert Berner Apparel Makers Go It Alone[Page 2 of 2]CRAFTING A MESSAGE. Says Jim Neal, principal at retail consultancy Kurt Salmon & Associates: "It's not as if Generation Y is going to get a ticket punched when they turn 30 that prompts them to suddenly want to shop at department stores." Young people will go to Walmart (WMT ) and Best Buy (BBY ) for value, says Neal. But they want to buy apparel they care about at smaller, more interesting stores. That's precisely the image specialty-clothing executives believe they can express in their own setting. Coach (COH ), the upscale handbag maker, has set the standard for limiting its exposure to the department store industry. Of course, its brands are in such demand that it has the power to set its own terms. The company is driving most of its growth through opening its own stores and expanding Internet and catalog sales. In its latest fiscal year, ended last September, Coach increased its North American full-price stores from 156, to 174. At the same time, it cut the number of U.S. department-store doors through which it would sell Coach bags by 300, to 1,100. Coach wants be offered only in department stores that have high traffic and can support the sale of a full range of Coach products, all steps that protect Coach's brand image. PLAYING OFFENSE. Last fall, Jones New York, which has been adding Anne Klein, Nine West, and Bandolino stores in recent years, paid almost $300 million for tony retailer Barneys, which has just 10 full-price stores. The purchase legitimately propels Jones, full of middle-market lines, into the luxury segment. But it also sees Barney's as a store and brand that attract the very people falling away from the old stores. "Clearly there are expansion opportunities," says Anita Britt, a Jones New York executive vice-president. Also clear: For big-brand apparel companies, the best defense against retailers wielding too much clout and limiting merchandising opportunities is to mount their own strong retailing offensives.
 Kiley is BusinessWeek Marketing editor in New York, and Berner is a writer in Chicago. with Jessica Thacher in New York Edited by Beth Belton Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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