Indies Morph Into “Power Brands”
It’s been hard to miss the headlines: Liz Claiborne, VF Corp and other industry biggies are slashing their bloated brand portfolios to focus on “power brands”.
(Ironically, many of these power brands weren’t so powerful 10 or even five years ago: Kate Spade, Juicy, Seven, etc. Go, indies, go.)
The media usually cites ongoing retailer consolidation and the rise of private label brands as the main drivers behind all this axing of the weak brand siblings.
But the biggest driver is today’s fast-moving, empowered consumer, who finds less and less resonance in big, soulless retail stores with merchandise to suit.
So the indie horde is moving in, slicing and dicing markets, offering resonant brands linked to dynamic founders via direct-to-consumer distribution.
Bond No. 9 anyone? Malin & Goetz? Earnest Sewn? The list goes on…
But the big guys aren’t dumb and they’ve got lots of money, so let’s not be too disrespectful.
Liz Claiborne is taking bold action and seems like it’s moving in the right direction. And VF can probably take Seven a lot further, even if they paid a crazy multiple (did they?).
Speaking of Seven, here’s a telling quote via WWD from Eric Wiseman, VF’s President and CEO:
“A business like Seven For All Mankind, it’s clearly a lifestyle brand, clearly has international potential and it has a great direct-to-consumer opportunity… We weren’t really in the premium jeans space and we don’t have a big portfolio of contemporary brands, but we were looking for a platform to build from. We think Seven, positioned in Los Angeles, will be a great platform for us.”
In other words, VF paid all that money ($775 million) for:
- A contemporary lifestyle brand
- International potential
- Direct-to-consumer growth potential (own stores)
- A brand community rooted to a strong - and influential - sense of place
- Oh, and let’s not forget strong management…
- … And critical mass, which never hurts going into a softer market
Now, if you can only get those six things in place, maybe VF will come knocking.
