Kohl’s Moves Fast on Elle Deal
Elle is the largest fashion magazine brand in the world and it has nearly five million readers in the U.S. Soon, it will also have its own exclusive line of women’s clothing in Kohl’s stores.
The
department store chain and Lagardère Active Media Licensing, a division of Elle, agreed on the deal that will put knit and woven tops, denim and twill bottoms, skirts, dresses, shorts and jackets in 300 Kohl’s and on the retailer’s website this Spring. All Kohl’s locations will have the line by Spring 2008. Prices for the Elle dresses will run about $40 and jackets will retail for $30.
Kevin Mansell, president of Kohl’s, said the company has focused on getting new fashions into stores more quickly and that is demonstrated in the deal with Elle.
“We have made significant progress with several existing brands, reducing merchandise cycle time by 12 weeks. The launch of the Elle brand demonstrates our speed to market success with new partners, allowing us to bring young women contemporary, runway-inspired fashions several months faster than ever before,” he said. “With consistent double-digit growth in readership, Elle magazine is one of the most recognized women’s brands in publishing and we are confident that this brand will resonate with young, hip shoppers. Our speed to market with world class brands such as Elle further delivers on our strategy of bringing exclusive merchandise to our customers nationwide.”
Fabrice
A. Plaquevent, CEO, Licensing, Lagardère Active Media, said, Elle operates 250 free-standing stores outside the U.S. “Through this exclusive arrangement with Kohl’s, Elle-branded product will now be offered in the U.S. We are very pleased to be part of this unique partnership with one of the most successful department stores in this country.”
Prices will be about $40 for dresses and $30 for jackets. Kohl’s will develop,
distribute and market the products, working with Lagardère’s Paris-based
licensing division, the companies said.
Discussion Question: What do you think about Kohl’s deal with Elle? Is a partnership with an established brand such as Elle, ultimately going to be more beneficial to Kohl’s than a deal with a celebrity figure?
The Elle announcement doesn’t say who’ll design the clothes, what the minimum financial commitment for inventory is, the licensing fee, or minimum ad commitments. Some licensing arrangements are so onerous that huge sales don’t return reasonable profits. It’s all in the details and the execution.
This is a really creative and interesting deal…kudos to Kohl’s! Elle has incredible brand equity with fashion and the allure of low prices with high style should be quite exciting to certain shopper segments. The only danger is to Elle if the product is really sub-par or if execution cheapens their brand (which I’ve seen with some of these deals). The pressure is on to create the right styles with decent quality and stay on top of trends as Elle identifies them.
Without knowing what the financial terms of the deal are, this appears to be a great move for Kohl’s. Elle brings them an image they have not had before but this one is much better than signing a contract with an individual spokesperson. We’ve seen too many individuals who have contracts with retailers go up in flames due to their behavior. By going with Elle, Kohl’s is able to sidestep this potential issue and yet still capitalize on the perception of upscale fashion. Smart move and I’m sure if this works we’ll see a lot more publications signing contracts with retailers.
Publishing brands (ala Parents Magazine in kids) are emerging as safe evergreens in the increasingly fly-by-night world of licensing. Elle will continue to burnish Kohl’s image as the upscale choice in the middle; a process that started with Beauty Bank and has rapidly and consistently been built from Chaps to Vera!
This is great for Kohl’s, but I would like to hear what some of Elle’s apparel advertisers are saying. Elle is now going to be a direct competitor to those companies that help build the magazine (ad revenues).
Another excellent move by a company with a clear sense of identity, purpose and direction. Kohl’s is supporting its publicly-stated plans for aggressive growth (1200 stores by 2010) with bold and innovative merchandising decisions, as well as its continued emphasis on efficient operations. Underneath it all is a very strategic commitment to the transformation of its information systems. Deployment of new technology is creating a “real-time enterprise” capable of system-wide visibility, greater application agility, and most importantly, higher levels of customer intimacy and responsiveness…these guys are good!
Another issue upgrading the lure to women for Kohl’s fashions. Most Kohl’s stores have a large selection of Men’s clothing with a wide variety and good selection. However, their women’s apparel section is confusing and disorganized. Let’s hope this move will help upgrade the customer satisfaction of the shopping experience for women as well.
As others have said before “Kudos to Kohl’s!”
The marriage of brands, Elle’s fashion authority, the fact that they already have a product line and understand retailing, no “celebrity implosion risk”–what’s not to like?
Kohl’s has made a very shrewd move here. Elle is a very strong brand name in fashion and is seen as quite upscale. While the appeal of a celebrity may come and go, a fashion brand like this remains (nearly) timeless.
In this hyper-competitive environment, retailers need something to differentiate themselves from the myriad of companies out there. This should help Kohl’s image in relation to J.C. Penney, Mervyn’s, etc.
First of all, you would have to buy into the concept that Brands are as important to the majority of customers today as they have been historically.
In my mind, the market segment of customers that Kohl’s hopes to attract will be motivated less by a “name” and more by the offering.
That said, if Kohl’s took this route in lieu of guest designers and other brands because they feel that Elle’s trend identification, interaction with the design world and their own retail store experience can combine to provide them a good shot at carrying stuff people want, then they are on the right track.
Elle can very possibly provide such a solution. As long as Kohl’s treats them as their own “skunk works” instead of a new “brand” label, it may just work.
I’ve read Elle magazine. It reflects upscale.
I’ve been to Kohl’s. It projects “constant sale.”
Blending for ascending seems right-on for Kohl’s
But who’ll think this is “For whom the bell tolls”?
This is a very good move by Kohl’s which should give them incremental sales and even more importantly, improve their fashion image. I agree with Mark that this is better than having a single celebrity with much less risk. It sounds like Elle already is supplying clothing to their stores outside the U.S. so they should be faster to market. Will they use the same clothing or will it be created just for Kohl’s? Either way, this looks like a very good move for both.
Elle has tremendous brand equity in the fashion world. This is a great alliance for Kohl’s, who has acknowledged that they are struggling to maintain a fashion forward image. This now gives Kohl’s a fashion position with reduced cycle times.
Kohl’s has a much better image for a designer line than Wal-Mart and its Tommy H. Line.
There are some companies like Target, Kohl’s, etc. that have the knack for consumer marketing, and then…there is WM. Hmmmmmmmmm
The deal brings synergy for both Elle and Kohl’s. Success for any retailer depends on how the overhead is covered every month. Theoretically speaking, Kohl’s will have a better turnover and lower investment requirement; it is very similar to playing with operating leverage or debt equity ratios to have a better return on dollars invested.
This is a GREAT deal for Kohl’s and provides great synergy. Kohl’s IS the darling of retail for America and Elle will add a great option for many customers on many levels. The customers ARE THERE and now there will be MORE of what they want–affordable variety and trend, at fair to good quality — Home Run.