King of Style “Game of Thrones” actor Peter Dinklage’s fashion
is spot-on from head to toe. (OK, maybe the boots could use some
work.) Page MW4
April 4, 2013
PLUS:Entrepreneur Jon Koon
turns his attention to apparel with Private
Stock. Page MW4
MAN OF THE WEEK
Brief EncounterLong gone are the days of the
hard, rectangular briefcase. The soft case in a variety of
colors, rich materials and styles has taken the lead in the
men’s accessories
market. For more on the updated staple,
see pages MW2 and MW3.
PHOTO BY RODOLFO MARTINEZ BOGO BROUHAHA
{Continued on page MW4}
by JEAN E. PALMIERI and ARNOLD J. KARR
HOW MUCH IS too much when it comes to promotions?
That’s an issue publicly held men’s wear retailers are grappling
with as both Jos. A. Bank Clothiers Inc. and The Men’s Wearhouse
Inc. found their aggressive price cuts over the holiday season fell
flat with consumers.
George Zimmer, founder and chair-man of Men’s Wearhouse, was
blunt in his assessment during the company’s fourth-quarter
earnings call last month. “I think it is clear that the more
promotional one is, the less each promotion works. And, of course,
one of our direct competitors is experiencing that problem at a
magnitude greater than we are,” he said in a reference to Jos. A.
Bank.
Men’s Wearhouse’s solution, according to Zimmer, is “to bring in
another everyday low-price garment to move away from
buy-one-get-one-free, but not eliminate it.”
During the holiday season, Jos. A. Bank became notorious among
retailers for run-ning promotions as eye-popping as
buy-one-get-seven-free. But the strategy apparently took its
toll.
On Wednesday, the Hampstead, Md.-based men’s specialty retailer
reported that for the three months ended Feb. 2, net in-come
contracted 35.7 percent to $28.4 mil-lion, or $1.01 a diluted
share, from $44.1 million, or $1.58, in the year-ago period. Sales
rose 2.4 percent to $354.8 million from $346.3 million, while gross
margins fell sharply to 55.9 percent of sales, from 60 per-cent in
the 2011 quarter.
The company warned Wall Street on Jan. 25 that poor reactions to
holiday promotions of cold-weather sportswear and accessories had
failed to excite consumers and issued revised guidance implying
that fourth-quar-ter earnings per share would fall to about 95
cents. The $1.01 per-share profit in the quarter was 3 cents better
than the latest consensus estimate from analysts, while the revenue
result came up short of the $368.5 million expected.
“For the most recent fourth quarter, sales started out slowly in
November, partly due to Hurricane Sandy and the distractions of the
national election,” said Neal Black, president and chief executive
officer. “Going into the critical holiday selling season, we
believed we had a strong marketing and pro-motional strategy for
the period. However, many of the promotional items and a large part
of our holiday assortment were items that sell in cold weather, and
the weather was unseasonably warm.”
He reiterated a point made in January that suit promotions
garnered a strong re-sponse, while those for sweaters, outerwear,
hats, gloves, scarves and jackets did not.
Retailers Hurt byHeavy PromotionsJos. A. Bank reports 35.7% drop
in Q4 profits.
MOD
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Bally’s briefcase. Band of Outsiders’ wool suit and Dior Homme’s
cotton shirt. Sermoneta gloves.
Men’s WeekMW4 WWD THURSDAY, APRIL 4, 2013
by JEAN E. PALMIERI
JoN KooN was 16 when he made his first million with an
aftermarket auto company that essentially spawned the MTV
television series “Pimp My Ride.”
When others started getting into the act, he moved on and
created his own auto accessories brand, Koonichi, which patented
Dubz, an air freshener that replicated a spinning car rim, as well
as other innovative products.
It wasn’t long before the young en-trepreneur turned his
expertise to the apparel industry, establishing a private label
manufacturing company and then a licensing business that pro-duced
for brands including Rocawear, L-R-G and others. In 2008 he formed
Tykoon Brand Holdings, an umbrella company that owns and operates
the Young Jeezy 8732 apparel brand that he purchased from Jay-Z’s
Roc Apparel Group, and he will launch a contem-porary streetwear
label this fall called Mostly Heard Rarely Seen. other proj-ects
have included a denim collection he designed for Italian luxury
men’s wear designer Domenico Vacca.
But the latest obsession for Koon, who will turn 30 this August,
is Private Stock, a men’s brand he conceived three years ago and
that shipped its first product for fall 2012 to retail-ers
including Fred Segal, Moda, Ron Herman, Riccardi and Traffic. “I
had a sourcing and production company that evolved into a licensing
company that evolved into a fashion house,” he said, declining to
provide a volume figure for the new line.
Koon cryptically describes the col-lection in this way: “When
Europe met Japan, got married in Hong Kong and took a honeymoon in
New York City.” The offering ranges from Japanese sel-vage denim
and lamb’s wool/cashmere sweaters with a lamb’s wool draw-string to
jackets with mixed-media knit and woven panels, stretch bow-leg
cashmere-blend pants and quilted T-shirts and woven shirts with
match-ing quilted trousers finished in a wa-ter-resistant cashmere.
The pieces are produced around the world: Denim is made in okayama,
Japan; watches in Switzerland; leathers in Italy; suits and shirts
in Hong Kong, and jewelry in New York City from beads sourced in
Brazil and Peru.
“I believe the world is becoming a much smaller place,” he said,
“and there’s a real merging of people and cultures.”
The collection is large — 120 to 150 styles a season — and
unique, offer-ing cottons, wools and cashmeres that have been
treated to be waterproof or water-resistant; engineered seams, and
dual-function items such as an anorak that folds into a backpack or
jackets with removable sleeves that double as bags. Hidden vents,
temper-ature-regulating knits, an angora wool monk’s cape and a
$1,500 chinchilla letterman’s jacket are among the of-ferings
targeted to the “progressive modern gentleman,” Koon said. Prices
for the denim start at $248 and go up to $898; woven shirts average
$258 to $368, and outerwear and jackets start at $898 and go up to
$1,998.
on Saturday he will open the doors to a Private Stock flagship
at 76 Wooster Street in New York’s SoHo. The two-level,
5,000-square-foot land-marked store, which was the site of Andy
Warhol’s last home and studio, was obviously a labor of love for
Koon, who designed every inch of the unit. He’d like to eventually
export the con-cept to other major cities around the world, but
right now there are no plans for other stores.
Upon entering the SoHo store, the customer is met with a stark
white inte-rior of lacquer, leather, fabrics and fur-
niture. Inside the front door is a 758-pound black dragon
granite sculpture of the God of Guan that Koon views as the
protector of the location. The sculptor worked on the statue for
three years, and it is one solid piece of stone.
only about 80 pieces of Private Stock apparel and accessories
are shown in the store, and they’re tucked away in specially
designed fixtures such as the white lacquer walls that slide out to
showcase the denim col-lection (each style has its own
muse-um-style card explaining its origin and manufacturing
technique) or opaque glass displays that light up when acti-vated
to show the small leather goods. The dressing rooms, designed to
look like an elaborate Victorian residence, allow salespeople — or
“stylists,” as Koon prefers them to be called — to bring
merchandise to customers to be tried on in their size.
“This is not just about selling,” Koon said. “It’s more about
amuse-ment and interaction. It’s like a gal-lery, and there’s a
sense of discovery.”
Saying he was “very superstitious,” all of the features in the
store include the number eight: Walls are eight-feet high; there
are 28 individually hand-blown glass balls; hang-ers are 6.8 inches
apart; a mirror on the staircase to the lower level has 28 panels,
and there’s a 20-by 8-foot koi pond at the bot-tom with 18 fish.
“Eight in the Chinese language is the almighty lucky number,” he
said, noting that it was “challenging and fun to design the entire
space” around the number.
The lower level is re-served for appointment-only shopping, and
features hand-made limited-edition pieces such as a python and
alligator backpack for $18,800 and deerskin jack-ets handmade by
artisans in Kyoto, Japan, for $3,800 to $5,800.
At the rear of the store is a private tea room where Koon’s
photos of his world travels will be on display for the opening and
his custom-blended teas will be sold.
Hidden off the tea room is a private space where Koon will
showcase his collection to the press and his international
custom-ers on a 60-foot line of mannequins.
Koon declined to say what it cost to open the store, but with
the fish alone costing $50,000, it was undoubtedly a large
sum. “It’s set up for business,” he said. “But I believe in
architecting a store that is different from a traditional shopping
experience for the guy who is shopping for fashion. And I wanted to
create a new retail experience that salutes fashion and
creativity.”
Peter Dinklage: a-
Although he’s only 4-feet, 5-inches tall, the “Game of Thrones”
actor excels in his fashion choices, allowing his sexiness and cool
factor to shine through.
Man ofTHE WEEK
phot
o by
Ste
ve G
rani
tz/W
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maG
e
the disheveled but boyish hairstyle adds roughness but is still
within grooming limits and it masks his large forehead.
Jon Koon Breaks Mold With Flagship
the black-and-white gingham shirt paired with a textured gray
tie is an unpredictable, yet savvy, choice to tone down the tuxedo.
Who can forget Hervé Villechaize in his formal attire in “the Man
With the golden gun”?
the made-to-measure tuxedo does the job, slenderizing his
torso.the tip of the tie hitting his waistband
is a clear indicator that he has strong knowledge of men’s
wear.
the slight carrot shape of the pants makes the ensemble look
more fashionable and works perfectly with his proportions and
measurements.
the scuffed leather ankle boots look a bit out of place. Some
shoe polish and a buffing rag would add a needed finish without
losing the roughness.
Further, he said that sales in the first eight weeks of the new
retail year are ahead, and “new and more focused casual assortments
and additional slim-fit suit inventories are ar-riving this
spring.…However, we remain cautious about the first quarter of
2013, especially since we have not fully an-nualized the calendar
shift for Easter and the larger volume sales periods are still
ahead of us.”
The company will host a call with analysts today, and Black
declined to comment further in advance of that call.
Last month, Men’s Wearhouse reported a larger-than-anticipated
loss for the fourth quarter, posting a net loss of $3.4 million,
slightly smaller than the loss of $3.8 million in the previous
year’s fourth quarter. Revenues expanded 8.2 percent to $608.4
million from $562.2 million, but compara-ble-store sales at its
K&G discount division fell 5.7 percent in the quarter “as
customers did not respond to our promo-tions and new marketing
campaign as well as expected,” according to Douglas Ewert, ceo.
Comps at the flagship Men’s Wearhouse division rose a modest 1
percent, while the Moore’s division in Canada was hit with a 5.5
percent comp decline.
The retailer had also run BoGo (buy one, get one free)
promotions last fall, but they were not nearly as over-the-top as
Jos. A. Bank’s.
Arnold Aronson, managing director of retail strategies for Kurt
Salmon, called BoGos in general a “very, very high-wire act” that
lead to “an issue of consumer credibility. And there’s also a
question of whether a retailer makes any profit on it.”
He said retailers tend to “go to the well more times than they’d
like” with these types of promotions, leading to a downward spiral,
and the “results are not optimum.”
Antony Karabus, president of Hilco’s SD Retail Consulting
practice, said Jos. A. Bank has done “a remark-able job” over the
years using promotions to drive traffic to its stores and
“perfecting the art of the deal,” and it would be “dangerous to
move away from that.” But the company should work to make its
offering more “compelling” by “sprinkling in special items” such as
patterned socks, fra-grances and basic men’s jewelry.
“The men’s business has been extremely strong, but because men,
by nature, are not in stores every week, it’s not all about price.
There has to be compelling fashion.” Despite the fourth-quarter
slowdown, Jos. A. Bank man-aged to put together its first year of
billion-dollar sales as revenues grew 7.1 percent to $1.05 billion
from $980 million in 2011. Same-store sales were down 0.5 percent
for the year while direct marketing revenues rose 22.7 percent,
giving the company a 2 percent increase in comparable sales.
Net income fell 18.3 percent to $79.7 million, or $2.84 a
diluted share, from $97.5 million, or $3.49, in the prior year.
Gross margin descended to 58.3 percent of sales from 62.1 percent
in the prior year.
Shares of Jos. A. Bank rose $1.10, or 2.81 percent, to close at
$40.28 Wednesday.
Jos. A. Bank Profits Fall{Continued from page MW1}
Mannequins in the private space.
the jeans display.
phot
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For more images, see
WWD.com/retail-news.
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