Kohl's new Vera Wang line could entice new shoppers
By Sarah Coffey
NEW YORK, Aug 31 (Reuters) - Kohl's Corp (KSS.N) will roll out its Vera Wang clothing line in early September, the department store's biggest launch ever of a designer-label brand and a key part of its strategy to use private labels to draw in new customers.
The Simply Vera collection, featuring apparel, accessories, shoes, lingerie, bedding and bath items and jewelry, lets Kohl's, which sells mid-priced clothing and household products in the United States, upgrade its image and gives Wang, best known for her wedding gowns, the chance to broaden her clothing line.
"It will be a complete revenue driver and Kohl's will increase sales, even though it will basically be this last quarter," said McMillan Doolittle retail analyst Morgan Ward.
The Wang line is important to investors because it shows Kohl's commitment to drawing in new consumers and taking its clothing in a trendier direction that Kohl's hasn't been known for in the past, Ward said.
The line's debut comes as the Menomonee Falls, Wisconsin retailer is adding more private label offerings in an attempt to broaden its customer base and bring in more revenue.
"This fits well with Kohl's strategy to offer more products in the best part of its good, better, best spectrum," said Robert Baird analyst David Cumberland. "For those consumers looking for Vera products, but viewing those available in other channels as outside of their budget, the Kohl's collection will be attractive."
The launch comes as fashionistas flock to New York City for fashion week, including a preview show of Wang's Kohl's line on Sept. 7 that will include an appearance by the designer.
RISK OF DILUTING BRAND
Wang is following in the footsteps of designers such as Isaac Mizrahi and Todd Oldham at Target (TGT.N) stores and Chanel's Karl Lagerfeld at H&M, all of whom have enjoyed success without damaging the brand appeal of their higher-priced lines.
While some of those lines were one-offs, Wang has a long-term agreement with Kohl's. That commitment means her designs must appeal to the middle market, which some say is not much of a stretch for a designer best known for her wedding dresses, which range from $3,000 to $40,000 or more.
Wang has always designed with the middle market in mind, not just the ultra-rich, said Newsweek's Dana Thomas, author of "Deluxe: How Luxury Lost Its Luster."
"She was offering already very well-designed chic clothing at a reasonable price for the middle market, so this is a natural extension of that," Thomas said.
Some retail analysts expressed concern Wang may be diluting her brand by putting her label into a mainstream venue like Kohl's, that its customers will view her line as too expensive or that some of the pieces, like a $138 short-sleeved car coat, are impractical.
"Maybe Vera Wang doesn't have the mass appeal that Kohl's thinks she does, or people don't know about her or care about her," Ward said. "Maybe the clothing is too impractical, especially for the Kohl's customer."
Others say the line should attract new, fashion-savvy and higher-income customers that may have driven by the store in the past but will be drawn in by Wang's casual line, broadening both the designer's and Kohl's customer base.
Kohl's will "get a wider breadth of a customer for their ready-to-wear," said Kathryn Deane, president of the retail trend analyst firm Tobe. "It's going to generate a lot of publicity. They'll get a lot of new first-time shoppers who will then start buying other items from them."
Kohl's patrons will likely be willing to pay a bit more to enjoy well-made clothing and original design, Deane said.
Trends that run throughout Wang's fall collection include layers, metallics, oversized sleeves, bubble skirts and big coats. Prices run from $389 for a comforter set and a $175 silver and tanzanite crystal necklace to a $54 gold pleated blouse and $29 lavender lace camisole. Like most Kohl's items, they will be subject to frequent discounting.
ADVERTISING PLANS
A billboard in Times Square is set to launch Sept. 9, the same day the products hit store shelves. Ads have already appeared in magazines and on newsstands.
Advertisements have already appeared in magazines such as Vogue and Glamour and on newsstands, and 30-second TV spots begin on Sept. 9, replacing Kohl's back-to-school campaign.
Kohl's will also launch a Simply Vera web site on www.kohls.com with suggested outfits from the collection.
Kohl's other exclusive products include Food Network items, shoes from Tony Hawk, Elle women's apparel, Casa Cristina home furnishings and Daisy Fuentes collections. (See here for "Shop Talk" -- Reuters' retail and consumer blog)
