Joe's Jeans to Open Nine Outlets
Premium-denim company Joe’s Jeans Inc. inked a deal Feb. 8 to open nine outlet stores with Premium Outlet Centers, a division of Simon Property Group Inc., said Joe’s President and Chief Executive Marc Crossman.
The outlets will be located at Premium Outlet Centers’ California locations in Carlsbad and Cabazon as well as Las Vegas; Seattle; Houston; Cincinnati; Wrentham, Mass.; Leesburg, Va.; and Dawsonville, Ga. Five of the stores will open for business in May, with another four debuting in late August. By the end of the year, Joe’s Jeans, based in Commerce, Calif., will have a fleet of 13 outlet stores. Currently it operates four outlet stores and two full-price boutiques.
Joe’s new outlet stores will offer merchandise at a 35 percent to 55 percent discount from the full price of Joe’s merchandise. Crossman did not forecast sales for the new outlet stores but noted the ventures could make $3 for every $1 of Joe’s overstock sold to off-price retailers. Joe’s will continue to sell its overstock to off-price retail partners such as Nordstrom Rack and Saks Off Fifth, Crossman said.
Outlet centers have gained new cachet during a weak economy. In a Feb. 5 statement, Simon Property Group noted that in 2009 sales at its outlet divisions were $500 a square foot, compared with $433 per square foot at its regional centers.
Other outlet centers have been doing well. Commerce, Calif.–based Citadel Outlets recently reported a 6 percent increase in retail traffic in 2009 over 2008. Much of that boost came from a new shopper, said Jess Irwin, Citadel’s marketing director. They are consumers who once focused their shopping trips on full-price malls.
Putting Joe’s Jeans in front of these new consumers is one reason for the label’s outlet expansion. Joe’s new real estate also will be crucial to the label’s branding, Crossman said. “It’s not just about the dollars, it’s about the environment,” he said.
Joe’s outlet stores will be housed in 1,400- to 3,200-square-foot spaces. Crossman said Joe’s new neighbors will be outlet stores for blue-chip retailers such as Barneys New York and Coach. The outlet stores’ interior design will look similar to that of Joe’s full-price boutiques in San Francisco and Chicago, where the interiors were created by Joe Dahan, the label’s designer.
These nine outlets stores are just the beginning of Joe’s retail expansion. By the end of 2013, there will be a chain of 50 Joe’s stores across the country with two full-price stores for every outlet store, Crossman noted.
International expansion will be part of Joe’s Jeans business plan this year, too. It currently runs six shops within shops in French department stores such as Galeries Lafayette and Printemps. This year, it will open more than 10 of these shops within shops to continue introducing Joe’s Jeans to French consumers.
The growth comes off of a good year. For fiscal 2009, the company made a $24.5 million profit on $80.1 million in revenues, compared with a $4.9 million profit on $69.2 million in revenues in 2008.—Andrew Asch
