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Super Contributor
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Registered: ‎02-18-2011

Why Do Designer Lines Decline After Being Sold?

Here is an interesting read. This touches back on various posts about the devaluation of designer lines when they are sold.

http://www.nytimes.com/2008/08/14/fashion/14SIGRID.html?pagewanted=all&_r=0

Her Forced Retirement by Eric Wilson

Published: August 13, 2008

GLOUCESTER, Mass.

Jodi Hilton for The New York Times

IT’S A NEW DAY Sigrid Olsen is starting over as an artist and entrepreneur after her clothing label was closed by Liz Claiborne.

Related

Times Topics: Liz Claiborne Inc.

Sigrid Olsen designs and sells watercolor prints, stationery and ceramics at her home gallery.

Susan Stava for The New York Times

A Sigrid Olsen store is shut down at the Westchester Mall.

THE call came late at night on the first Monday of January, delivering the news that Sigrid Olsen had feared for six months. Liz Claiborne Inc., after a review of its brands, was dismantling her 24-year-old fashion business, closing its 54 stores and laying off dozens of employees, including the designer herself.

Ms. Olsen, who spends much of the year at her longtime home here, began to call her staff in New York to explain what was happening in advance of a corporate announcement that would be made the next day. But what she could not explain was what had led to the demise of a peppy brand with a passionate customer base and peak sales of about $100 million, or why the sputtering Liz Claiborne conglomerate, which had entertained offers for Ms. Olsen’s label and others, had not chosen just to sell it.

“I thought that we were one of the brands they would want to keep and nurture,” Ms. Olsen said. “That was more shocking than anything.”

It is a curious development in the fickle business of fashion that clothing labels like Ms. Olsen’s, made by and for the baby boomer generation, are among those being hardest hit by the current economic turmoil and retail retrenchment. The restructuring of Liz Claiborne early this year also resulted in upheavals at more expensive labels: Ellen Tracy, which was sold; and Dana Buchman, which was pulled from depart

ment stores and will be remade more moderately for Kohl’s. At the same time, retailers like Ann Taylor, Talbots and J. Jill have been closing hundreds of stores around the country, and the consolidation of department stores over the last decade has left many malls with more vacancies than options for the enormous demographic of women in their 40s to 60s.

Her tale is in many ways emblematic of how those customers and the designers they favor are being pushed aside for a younger, trendier and more lucrative shopper. A vibrant 55-year-old, Ms. Olsen is coming to terms with the unceremonious end of her fashion career — as the windows of the last remaining stores were papered over last month and the stock sold at discounts of 70 percent, including the hangers — at the same time she is starting over as an artist and entrepreneur.

SHE lives with her husband, Curtis Sanders, a former store owner and textile merchant, in a shingled house painted in tropical aqua with yellowish green trim, the tallest building at the center of an artists’ colony that faces a working harbor on Rocky Neck Avenue. Every day at 11 a.m., she opens a bright gallery with her name painted over the threshold, selling cheerful watercolor prints on posters, stationery and ceramics, which evoke the colors and textures of the nearby rocky coast and the painterly late-day light of the North Shore.

As the tourists walk by, their attention caught by the familiarity of the name, you can almost recognize the moment they make the connection to the fashion label that was only recently sold in thousands of stores around the country. Many of them stop by to inquire about what happened to Ms. Olsen’s collection. Others, including more than 400 customers who have found Ms. Olsen through her Web site (sigridolsenart.com), sent letters of, for lack of a better word, condolence.

“I felt like it was an old friend put out to pasture,” said Lucia Keenan, 55, in a telephone interview from her home in Tampa, Fla., where a Sigrid Olsen store closed this spring. Ms. Keenan, who has a closet filled with Ms. Olsen’s casual knit sweaters and resort prints, compared the designer to Martha Stewart for the kind of loyalty and cult of personality that she engendered.

“She’s one of us,” Ms. Keenan said. “Martha was going to show us how to do all these things with food and entertaining, and then we had Sigrid there helping to dress us.”

Ms. Olsen, who began her career as an artist, creating her own clothes in styles that she personally found wearable and uplifting, said the fashion industry is now ignoring her generation because of a misperception that “it’s not sexy and fun.”

But from a retailer’s perspective, boomers’ tastes and attitudes are so varied that their fashion choices are no longer age specific or dedicated to one designer, which is having an impact on where they shop.

“Speaking as a baby boomer, fashion is far more individual today,” said Lavelle Olexa, a senior vice president at Lord & Taylor. “That customer may find particular things that work in different lines, instead of saying blanket-wide, ‘This is the label for me.’ ”

Ms. Olsen had started the company making hand-printed textiles in Rockport, Mass., often with leaves and shell shapes in blue and green patterns. The clothing that evolved had a beachy, resort feel and quickly became popular in small boutiques in the Sun Belt.

“It was her art speaking to you through her clothing,” said Kathy Hazel, 66, of Miami. “I would put on tops of hers and felt like I was wearing a piece of art.”

But when the growing label was sold to Liz Claiborne in 1999, for a reported $54 million as part of a string of acquisitions, Ms. Olsen did not become rich because she was a minority owner in the venture with other partners. Her share was less than $2 million, she said, but she remained with the company as creative director. The line was introduced to larger department stores, alienating many of the small-town stores that helped make her popular in the first place, and then began to lose money after opening more than 50 of its own stores in a matter of three years.

“It was a hard transition,” she said. “We began to lose that personal touch. But what I gained was a different perspective, and playing with the big boys was something I enjoyed learning.”

As the company expanded, however, quality began to deteriorate. Several design positions were moved to Hong Kong, while marketing remained in New York. Claiborne was also splitting the focus of its marketing and advertising between other brands it had bought with higher fashion profiles, like Lucky Jeans, Kate Spade and Juicy Couture. “When Juicy came along, it was like the cute baby that takes everyone’s attention,” Ms. Olsen said. “And we were like, ‘Waaaaa! What about us?’ ”

“Then things started declining almost immediately,” she added. “It was amazing. I’ve never seen anything tank so quickly in my whole life.”

It is perhaps a testament to the upbeat spirit of Ms. Olsen’s designs that she remained unfazed by the downturn of her business, which coincided with the discovery in 2005 that she had breast cancer, necessitating a lumpectomy, then a double mastectomy. She said was relieved to have a month off from work and that the plastic surgeon she had selected for breast reconstruction had, coincidentally, started her education at an art school.

“I never felt like I was in danger of losing my life,” she said. “I just knew that I had to go through this experience. Ultimately, it made me want to make sure that the years I have left I’m doing what makes me happy and that I don’t have to spend a lot of time doing what other people tell me to do.”

Once Liz Claiborne announced that the brand was among a group it was considering selling, Ms. Olsen became frustrated by the inability to control her own fate. Some companies expressed interest in buying the label, but the offers were deemed too low. Adding insult to injury, when Liz Claiborne closed the company, it retained the trademark and a noncompete agreement, so Ms. Olsen cannot design clothes at all until 2010 or, barring a development with Claiborne, under her name after that.

“And they’re not even using it,” Ms. Olsen said. “My husband said, ‘Pay them a licensing fee.’ I’m not paying them a licensing fee. Who knows? They may just drop it if they can’t do anything with it.”

LIZ CLAIBORNE executives said they chose to keep their options open. “Sigrid Olsen is an iconic brand that developed a remarkably strong consumer connection,” said Natalie Kielian, a spokeswoman for Claiborne, in a written response to questions about its plans. “For this reason, the brand is extremely valuable, and we look forward to finding the right path to optimize its value in the future.”

Now having once escaped the corporate world, Ms. Olsen still seems to be caught in a struggle between a part of her that also wants to optimize the value of her name by pushing ahead with another lifestyle concept — arranging women’s retreats to encourage creative discussion or teaming up with a hotel to create a Sigrid Olsen resort experience — and a part that wants to relax and let things happen as they may.

“Being a child of the ’60s, I still have that idealist in me that I think I can pull it all together and give people an uplifting, positive message,” she said, “and still be an entrepreneur and a capitalist at the same time.”

Esteemed Contributor
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Re: Why Do Designer Lines Decline After Being Sold?

Way too much to read - and follow. Have a nice day

Esteemed Contributor
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Re: Why Do Designer Lines Decline After Being Sold?

A simple answer to the question is what happens is that the new ownership assumes design and production control. Loyal customers who shopped the line because the "designers" esthetic (creations and style) appealed to them aren't as attracted to the new direction. That's the style aspect. Then there's the lowering of quality which can happen when a mega company is managing and so much of production is contracted out to middle companies. Sometimes the retail prices don't change because these middlemen (or I like the term middle companies) have to be paid, but long time customers can tell the difference.

Honored Contributor
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Re: Why Do Designer Lines Decline After Being Sold?

In a nutshell, things just change when a brand becomes one of many as opposed to the sole focus of the one who created it and is committed to it...


In my pantry with my cupcakes...
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Re: Why Do Designer Lines Decline After Being Sold?

On 4/8/2014 fthunt said:

Way too much to read - and follow. Have a nice day

Lol. It's a newspaper article. Some people don't like links. No worries.

Super Contributor
Posts: 466
Registered: ‎02-18-2011

Re: Why Do Designer Lines Decline After Being Sold?

I just wanted to give a perspective from the designer's point of view. Sometimes it is assumed that they sold out and no longer care about either the line or their customers.

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Re: Why Do Designer Lines Decline After Being Sold?

On 4/8/2014 Trix said:

A simple answer to the question is what happens is that the new ownership assumes design and production control. Loyal customers who shopped the line because the "designers" esthetic (creations and style) appealed to them aren't as attracted to the new direction. That's the style aspect. Then there's the lowering of quality which can happen when a mega company is managing and so much of production is contracted out to middle companies. Sometimes the retail prices don't change because these middlemen (or I like the term middle companies) have to be paid, but long time customers can tell the difference.

Liz brought out the competition, and then shut the company down.

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Re: Why Do Designer Lines Decline After Being Sold?

Sigrid Olsen clothing, although her colorways and fabrics were nice - was too expensive and there was no clear style direction that defined her line under LC. The line as a whole was a small collection. You can see her styles - sellers are offering on ebay. I used to see racks of her stuff in the malls. Beside Juicy and Kate Spade, what did her line in were J Jill and Coldwater Creek.

Super Contributor
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Re: Why Do Designer Lines Decline After Being Sold?

moonstone dunes, those are good points. I'd see her line in the stores, but I never purchased because I'm not much of a print person.

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Re: Why Do Designer Lines Decline After Being Sold?

The Sigrid Olsen brand came to it's height with hand crochet sweaters and pants and skirts in matching tencel fabric which was new to the wide spread market. Her colors were usually pastel and very popular here in the south with cool springs. Crochet lost it's popularity, and it seemed that the Sigred Olsen team had no hybrid clothes to follow current styles. They just died. I saw some Sigrid Olsen sportswear at a Liz Clayborne outlet and it was not up to the standards I had seen of the clothes in the stores. Within five years, Liz outlet stores had closed.