Tuesday, August 17, 2010

Fashion House Mistakes

I posted this on my other blog for seniors but realized that it is a good blog for business people, too.

I was in Macy's, and I wondered what had happened to my favorite clothing brands. Where were clothes that I could wear -- and look good in? When I was a YUPPIE the fashion world produced all these great clothes that were perfect for me - professional, stylish and reasonable. But now that I'm just an aging professional, I can't find anything to wear. I can look like a frump with boiled wool jackets and pants up around my waist or a middle-aged mom trying to look young with skinny pants with a waistband around my hips.

Why? Because it's all about the young. You gotta sell to the young who are bursting with a desire to spend fresh money. We mature women don't spend as much, but we still have a demand for clothing. The young are a tough market. They are fickle and feckless, and developing the latest "must-have" item and marketing it is expensive and risky. I think fashion brands like Liz Claiborne are being really short-sighted to switch their focus from boomers to babes. Haven't they heard of the cash cow? A cash cow is a brand that you can milk. It has an established base of consumers who are loyal, and you just rake in the bucks from them.

I knew that the cash cow concept hadn't even occurred to Liz Claiborne (one of my favorite brands) when I read in the Wall Street Journal on August 16, 2010 (After Targeting Younger Buyers, Liz Claiborne Hits a Snag) that the head of Liz Claiborne had made a deal with JC Penny to license its brand to them as a young, mass-market private label, while blowing off their older base who shops at Macy's. Furthermore, I discovered why a lot of the brands I used to rely on, like Ellen Tracey, were no longer available. The Liz Claiborne CEO William McComb had killed them off to focus on Juicy Couture, Kate Spade and Mexx.

Interestingly, the change in focus has not been good for Liz Claiborne. The stock has gone from $43 when McComb joined the company in 2006 to $4.82 on August 13, 2010. Meanwhile, I have a more cash in my bank account because I could find fewer appealing clothes to spend it on.

I wish someone would have the guts and the vision to pick up the old brands like Ellen Tracey and Liz Claiborne and re-establish them in the marketplace. Until they do, I will keep hunting for clothes that fit my needs. I think it's a great opportunity.


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