Shifting Business Model
Private-label maker takes a leap into branded business with Kathy Ireland
After two decades of making private-label apparel for a variety of major brands, including Reebok, Quiksilver, Roxy and North Face, Brea, Calif.–based manufacturer Orioxi International has stepped out from behind the scenes.
The company recently launched its first licensing venture, ki by Orioxi, a line of pretty casual knits for women inspired by supermodel Kathy Ireland.
The line, which makes its first deliveries this month, made a splash at the MAGIC Marketplace in Las Vegasthis February when Ireland herself manned the booth and met with buyers. “She’s a great salesperson,” said Chris Young, Orioxi’s executive vice president.
Getting to this point has been a long time coming for the company. Launched in 1985 in a one-bedroom apartment in Los Angeles by Chris Young’s father, Dr. Ziegfred Young, an immigrant from Shanghai, the company has grown to become a one-stop shop for private label. “From product development, production engineering, manufacturing to logistics, we do it all,” said Young. Orioxi, whose name is an amalgamation of “oriental” and “occidental,” owns factories in Africa, Central America and China, where it manufactures fleece, jersey, pigment dye knits and piqueacute; polo garments for its privatelabel clients.
While the demand for private-label business has remained strong, the company felt it needed to diversify its business portfolio, Young said. “We have been brand builders for other brands, it’s time for us to take what we know and try ourselves in building a brand through our own license,” he said.
A chance meeting with Ireland provided the opportunity Orioxi had been seeking. The company struck a five-year licensing agreement with the supermodel and Kathy Ireland Worldwide, Ireland’s lifestyle company. The deal encompasses knit tops and bottoms in cotton, terry, fleece and Modal.
“The line caters to a woman 35 years old and older who is balancing her busy professional life and family obligations. The styling has a very contemporary attitude,” Young said. Soft sweatshirts in dusky hues feature small hits of embellishment. Pigment-dyed thermals in feminine tones sport pretty buttons and flocking. A pullover gets a little edgy with wide sleeves and a floppy asymmetrical collar. The fit is appropriate for a grown-up figure, and there are no sassy slogans emblazoned across the seat of the line’s woven bottoms.
While the product category is familiar territory for Orioxi, executives at the company have been careful to keep ki (and any future licenses) separate from its private-label business. “For us, it is about focus and attention to detail. The license business certainly is a baby within our organization and it is a subsidized business, but we [want to give it] the attention it deserves,” Young said. An independent staff has been hired to design and manage the ki brand. “First impressions, we believe, are everything—that is why we put a full team behind it separately,” Young said.
Upmarket focus
The new in-house team is based out of New York, where the brand also keeps a showroom. Tom Adams, formerly of Nike and Pearl Izumi, a performance apparel manufacturer, is ki’s vice president of sales. Creative Director Julie Cimpko has brandmanaging experience from Reebok, Rockport and Calvin Klein under her belt. Gayle Robbins, the brand’s designer, has designed for Anthropologie, Fossil, Express and Sanctuwear, a line of yoga- and spa-inspired loungewear. Ki’s namesake also gets in on the action. “Kathy is very actively involved in product development. She shares her vision with us,” Young said. Ireland provides a direction for each season, he said, and has final approval on all the looks.
Ki by Orioxi isn’t Ireland’s first attempt at apparel. In 1993 the model launched a line of socks, and soon partnered with Kmart to produce Kathy Ireland brand apparel for women, including maternity clothes and swimwear. The apparel lines have since been phased out, and Orioxi insists there is no comparison. “This line is completely different simply because of the quality, design details and the overall look and feel. What will make this succeed are the people we have in on this team and the strong product that ultimately is what our consumers will connect with us,” Young said.
Ki will wholesale for $15 to $40 and is being positioned to sell in specialty stores. Executives hope to eventually expand distribution to better national channels. The ki team set lofty sales goals for the line but say right now they’re focusing on building momentum. “The first year is [not about] dollars and cents, it is more about exposure and the right placement,” Young said.
Retailers are responding well to the line. Pat Somers, owner of the Shirt Off My Back boutique chain in Colorado and Wyoming, has purchased the brand’s Spring 2006 and Fall 2006 lines for his 12 shops. “I like the quality, fabrics and details. It is really well-made,” he said. The mid-tier resort retailer said the price points are a bit of a stretch for his customer, but he thinks the quality and style of the line are strong enough to entice women to spend the extra cash. Cuffy’s of Cape Cod in Massachusetts and Fitness Elite in Southern California have also picked it up.
Going forward, Orioxi is considering diversifying the ki line. “Plus sizes are a growing area and we want to address that,” Young said. More woven bottoms for the line (which is heavy on knit tops) are another possibility.
Having gotten a taste for branding, Orioxi is open to expanding its licensing business, particularly in the familiar territory of women’s and men’s lifestyle activewear and sportswear. “We want to concentrate on the ki line, but we certainly will not rule out any good opportunities. We would be interested in strong brands that will share our goals and can utilize our product strength,” Young said.
