What’s in a Name (Change)?
This month, Dressbarn, which operates over 2,400 stores under the Dressbarn, Justice, and Maurice’s monikers, changed its name to Ascena Retail Group since, according to CEO David Jaffe, Dress Barn bas become “a fundamentally different company that extends well beyond the original Dressbarn concept and brand.” In their 2010 annual report released this month, the company stated an intention to evolve into a “multi-brand holding company with equally important brands that will allow us to ascend to new heights and to seamlessly incorporate future acquisitions . . .” Dressbarn may be the latest company that has outgrown its brand beginnings, but it isn’t the only one. Over the past five years or so, at least four brand houses have undergone name changes, including:
The Jones Group (formerly Jones Apparel) in 2010
Collective Brands (formerly Payless) in 2007
Iconix Brand Group (formerly Candie’s) in 2005
Sears Holdings (formerly Sears Roebuck & Company) in 2004
The desire to expand into new categories is one logical reason for a name change. The Jones Group’s founder, Sidney Kimmel, stated that the company, “while rooted in apparel,” had “expanded well beyond its beginnings.” I’ll say – The Jones Group now houses 25 lifestyle brands in seven product categories (apparel being only one). And since going public in 1991, it has also embarked on a series of brand acquisitions (Evan Picone, Gloria Vanderbilt, Kasper, and others).
Jones’ CEO, Wesley Card, went on to say that “Jones has never been better positioned to leverage our exceptional talent, best-in-class product expertise, and innovative brand management” and that with these resources in place, they were poised to “not only cultivate (their) existing brands to their full marketplace potential, but also discover and nurture new brands and design talent . . .”
Therein lies the shift. These companies — despite their various beginnings as manufacturers (Jones Apparel Group), retailers (Payless and Sears Roebuck), and footwear brands (Candie’s) — all decided that their future is in brand marketing. Whether taking owned brands outside of the home base as Sears has done, or replicating previous brand-building success through acquisitions, as is the case with the other three, a single category or brand moniker no longer fully articulates their brand marketing ambitions.
As Iconix’s CEO, Neil Cole, stated, “The name change represents the final step of the transformation of the company’s business from an operating footwear and apparel company to a brand management business.” In 2005, when the name change took place, Iconix owned three brands: Candie’s, Bongo, and Badgley Mischka. That portfolio has since grown to over 20 owned or partially owned brands, many of which are directly licensed to retailers.
As I wrote about in a recent blog posting, retailers’ new preference for the term “owned brand” (vs. private label or private brand) and their growing internal brand organizations speak to a strategic shift toward intellectual property ownership and active brand management. That shift has resulted in some retailers going so far as to create intellectual property entities to house their brands with the expressed intent of making them available to other retailers.
In 2006, Sears Holdings’ chairman, Eddie Lampert, created a $1.8 billion entity to house the Craftsman, Kenmore, and DieHard brands. This year, Sears licensed the DieHard brand to Schumacher Electric in select categories and made Craftsman tools available to Ace Hardware, turning Ace into its customer. Safeway formed the Better Living Brands Alliance in 2008 and the following year, began making two of those brands — O Organics and Eating Right — available to other retailers including Price Chopper and Hy-Vee. This year, Brookshire Brothers was added to the list. O Organics has now surpassed $400 million in annual sales, making it a top-selling organic brand.
Sears’ and Safeway’s hybrid wholesale/retail brand marketing models may seem similar to Iconix’s at first blush, except that Iconix isn’t holding inventory in either its wholesale or direct-to-retail models. And that’s a big reason why pure brand marketing is so appealing. If there is anything better than managing inventory efficiently, it’s not managing it at all.
In my last blog article for LIMA, I stated that retailers have decided that they are brands. They’ve also decided that they are brand marketers and licensors, and so have many others.
What’s in a name change? A new group of brand marketers with powerful portfolios!