Blue Cult Realigns Brands, Distribution Strategy
After several months of speculation in the industry, Blue Cult executives said that, contrary to whispered reports, they are not closing shop.
Earlier this year, rumors swirled of mass layoffs at the Vernon, Calif.–based premiumdenim manufacturer, and a disconnected corporate phone number did not seem to bode well for the company. Blue Cult, which launched in 1999, has been the focus of some concern since sales and production began slipping. Last March, the company cut between 30 percent and 50 percent of its workforce. At the time, co-founder Caroline Athias said the thinning was a symptom of having grown too much, too quickly and dismissed rumors that the company was looking for outside investors. Still, the rumors persisted.
Athias has all but left the company, and Michael Mechaly, nephew of co-founder David Mechaly, has taken the reins of the denim maker. Michael Mechaly, who has worked at Blue Cult for five years and recently launched Coil, his own premium-denim brand, said Blue Cult isn’t on its way out. On the contrary, the denim company is making some dramatic moves to reestablish itself as a top denim maker.
According to Michael Mechaly, at the top of Blue Cult’s agenda is regaining control of its U.S. distribution. Last year, Blue Cult signed an exclusive distribution deal with Irvine, Calif.–based manufacturer and distributor nZania in the hopes that the company would get Blue Cult into department stores and grow its domestic distribution. nZania also acquired a license to manufacture and distribute Blue 2, Blue Cult’s juniors denim line. “We wanted them to take us to the next level and open doors that we couldn’t open. It just didn’t work out—it killed our U.S. market,” Michael Mechaly said. Now, Blue Cult is negotiating with nZania for the return of its domestic distribution. “At this moment, nZania remains our sole United States distributor,” David Mechaly said, adding that nZania will retain its Blue 2 license. Executives at nZania declined to comment.
If everything goes according to plan, Blue Cult’s distribution will soon be handled by Mikey Koffman, owner of The Gallery showroom in the Cooper Design Space in Los Angeles. Koffman also reps Coil. “We’re looking for sales reps now,” David Mechaly said. “Mikey is very dynamic. She’ll supervise all of our sales people.”
Buyers will find other changes at Blue Cult. Blue Cult Elite, the brand’s newest, priciest label, has been discontinued, as has the Blue Cult Knits line and the Sacred and Sacred Blue denim labels. Men’s jeans, which right now make up approximately 5 percent of Blue Cult’s business, are also being put on the backburner. “We made the mistake of concentrating on too many projects before,” Michael Mechaly said.
Now, Blue Cult has hired a new designer and is in the middle of redesigning its denim and washes. Last spring, Blue Cult launched another redesign campaign that took its look in a more high-end, fashion-forward direction in the hopes of stimulating sales and elevating the perception of the brand. “Before, we had people who used to love Blue Cult, and then we changed directions and that customer didn’t recognize us any more,” and the new target customer didn’t respond as favorably expected, Michael Mechaly said. “Now we have to rebuild our consumer base. We want to make classic, sexy jeans and get back to the place where we were two years ago.” The revamped Blue Cult denim will begin shipping this fall.
Hopes are high at Blue Cult. “We know how to make denim. It’s been tough. But in this industry you can be high very fast and come down very fast,” Michael Mechaly said. Sales for 2007 probably won’t be stellar, but the company hopes to be back on track by 2008, according to Michael Mechaly, who added, “We’re going to give people something to be excited about.”
—Erin Barajas
