Industry Surveys

Juicy Couture evolved into the premium
lifestyle brand it is today due to strong product
positioning for “girly girls” who want to
be hip, chic, and cool. It is casual luxury
with a mix of Los Angeles celebrity and an
irreverent, fun attitude that attracts shoppers
aged 10 to 44, and even some grandmothers.
These factors are the base of Juicy Couture’s
success. The company is projected to generate
sales of $450 million in 2007, with a corporate
goal of $600 million to $700 million
by 2010; it is estimated to grow at a compound
annual growth rate of 10% to 15%
through 2010, supported by specialty retail
growth of 30% to 40%.
Initially a line of maternity jeans under
Travis Jeans, Juicy Couture was founded in
1994 by the partnership of Gela Nash and
Pamela Skaist-Levy, when they noticed a
dearth of casual sexy apparel for working
out, running errands, stopping at a café, or
picking up the groceries. The brand was
made out of their home in California and
was a huge success on the West Coast.
At the start of Juicy Couture, the focus of
the fashion line was on sportswear and
women’s sweat suits. One of the company’s
primary goals in brand positioning was to
combine sexy style with extreme comfort —
the success of which is evident with the company’s
tracksuit, which today generates 20%
of total sales volume. In 2002, Juicy Couture
added clothing lines for men and children.
Liz Claiborne acquired Juicy Couture in
2003, when sales were less than $50 million
and the business was entirely wholesale. Both
founders have stayed on as copresidents. With
a huge corporation to support its growth,
Juicy Couture could expand distribution,
strategically extend the brand to adjacent categories
(including handbags, shoes, and fashion
jewelry), improve sourcing and the supply
chain, and create a marketing program beyond
word-of-mouth or grassroots.
Juicy Couture continues to expand its
product lines and marketing strategies. In
2005, the company licensed its name to
T-Mobile USA, a subsidiary of Deutsche
Telekom AG, for a designer version of its
Sidekick mobile phone, and to Movado
Group Inc. for watches. In 2006, a line of infant
apparel was added and an eponymous
fragrance, which won three FiFi (fragrance
industry) awards, was introduced. Fragrance
sales for 2007 are projected at $60 million,
which would place Juicy Couture fragrance
among the top 10 US fragrances. The company
further extended the brand to the entire
family with the introduction in 2007 of Juicy
Crittoure fragrance and ancillary items for
dogs and their owners. A man’s fragrance,
Dirty English, is projected to launch in
March 2008.
The first free-standing Juicy Couture
stores opened in the United States in October
2004 in Las Vegas. In October 2007, the
company opened its 34th store, a flagship on
Rodeo Drive. Executing a non–cookie cutter
approach in real estate and store ambience,
Juicy Couture expects to have 39 stores operating
by the end of 2007 and 60 in 2008.
Further afield, the company looks to open 47
shops in China over the next three years, as
well as five in Russia.
While we believe that some categories are a
bit of a stretch (e.g., Christmas tree ornaments
in 2006 and, now, the Juicy Crittoure personal
care line for dogs), by and large the brand is to
the current decade what Liz Claiborne was in
the 1980s and 1990s. Juicy Couture’s casual
apparel and accessories have a following that
spans men, women, and youth, aged 14 to 44.
A testament to the brand — and the ultimate
compliment that can be paid to a company —
is that the brand has morphed into a descriptive:
“How Juicy!”
Stores move into overseas markets
Seeking growth away from saturated US
markets, many retailers are looking to overseas
markets — especially Asia — for new
store locations.
For luxury goods makers, Asia is an alluring
market. Japan has long been a strong
market for luxury goods, thanks to its consumers’
taste for high-end goods. Jewelry retailer
Tiffany & Co. has 52 retail locations
in Japan, where it generated 19% of its revenues
in 2006 of $2.6 billion. Luxury handbag
retailer Coach Inc. received 18% of its
$2.61 billion sales from Japan for the year
ended July 2007. According to Coach, which
is based in New York, Japanese women
spend four times more per capita on luxury
accessories than American women do.
Upscale retailers are now looking to China
and its burgeoning middle and upper
classes. Tiffany opened a store in Beijing in
May 2006 and added a location in Shanghai
NOVEMBER 29, 2007 / APPAREL & FOOTWEAR INDUSTRY SURVEY
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