California Apparel News

Barry Miguel has been president of 7 For All Mankind for barely two months, but already he is mapping out his war strategy to strengthen the premium-denim brand.

On a white shiny wall board hanging near his sleek modern desk, big concentric circles overlap each other. One set shows innovation merging with fashion. A second set illustrates denim overlapping with sportswear.

Sentences such as “How do I feel when I wear my 7s?” and “Control our destiny” are scribbled near the circles. Other phrases include “Retailization of 7” and “Extra revenue.”

The felt-tip-penned loops and writing on the wall board illustrate that 7 For All Mankind is intent on building on its brand name after two lackluster years, when revenues slumped 8 percent in 2009 and 3 percent in 2010.

Over the years, the premium-denim label has faced rising competition from other Los Angeles denim brands such as Hudson, Joe’s Jeans, J Brand, Citizens of Humanity, Paige Premium Denim and True Religion, all labels that came on the scene after 7 For All Mankind was founded in 2000 by Peter Koral, Jerome Dahan and Michael Glasser. 7 For All Mankind was acquired by VF Corp. in 2007 for a whopping $773 million. Last year, the corporation wrote down the value of 7 For All Mankind by $201 million.

7 For All Mankind not only faces more competition and tough consumer sentiment, but it has been lacking a president for more than one year. Topher Gaylord, the company’s previous president, departed last year, after 1frac12; years on the job, to become the president of Mountain Hardwear Inc., a subsidiary of Columbia Sportswear Co.

A year-long search, however, produced Miguel, who has an extensive history of working with apparel companies based primarily in New York. His most recent job was at Tracy Reese, the designer dress label that hired Miguel in early 2009 as its first chief executive.

Miguel said the idea of working for 7 For All Mankind appealed to his desire to build the brand beyond its 2010 revenues of $290 million, according to analysts’ estimates. “Having a great premium-denim business is, of course, our core,” said Miguel, sitting in his glitzy office in Vernon, Calif., the industrial underbelly of Los Angeles.He has an unfettered view of a railroad switching yard across the street. For miles, there are piles of cargo containers ready to be double-stacked atop rail cars. Attired in a pair of white denim pants paired with a blue-and-white striped shirt, navy-blue tie and blue cotton blazer, Miguel looked like a combination of East Coast preppy and West Coast cool. A white-dotted navy-blue handkerchief peeked out of his jacket’s breast pocket. “The opportunity in this category is deciding what do we do with it and how do we extend that core brand,” he noted.

The first step in extending the brand is beefing up the retail component of the label in Europe and Asia. Miguel said the company currently has 119 stores in Europe and Asia, but by the end of the year, the number will mushroom to 159 outlets. In the United States, there are only 41 retail and outlet stores, which will see four additions by the end of 2011.

In many ways, 7 For All Mankind is following in the steps of other denim brands that pegged direct retail as their savior. True Religion, founded in 2002 by Jeff Lubell, is on an aggressive retail path, as was Lucky Brand Jeans, a division of Liz Claiborne Inc.

“Retail is a huge expansion opportunity for us,” Miguel said. “The other side is expanding beyond premium denim into other categories such as sportswear and accessories.”

Premium denim still makes up the lion’s share of 7 For All Mankind, but morphing into a lifestyle category is also a way to go beyond the revenue generation of its blue jeans, which retail for $169 to $350.Another expansion area will be relaunching the label’s children’s division.In addition, 7 For All Mankind has revamped its design team in the last year. The new team includes Mille Monferin, head of men’s and women’s denim; Gustavo Garibay, head of men’s sportswear; and Michelle Manz, head of women’s sportswear.

Adding to 7

The question is, will these new steps translate into more revenue?

Analyst Andrew Burns, who covers VF Corp. for D.A. Davidson & Co. in Portland, Ore., sees only modest growth for the brand in the near future. “That growth would be based on new store openings, and those new stores are generally weighted toward Europe and not in the U.S.,” he said. “No one, including myself, is expecting anything big in growth—maybe a low single-digit trajectory.”

Still, expansion overseas makes sense because, right now, two-thirds of 7 For All Mankind’s sales are in the United States. Some of its major department-store clients include Nordstrom, Bloomingdale’s, Saks Fifth Avenue, Neiman Marcus and Macy’s.

And then there is a host of specialty stores around the country that carry the premium label.

“We have 30-plus brands in here, and for me it is a brand that has always been a staple,” said Blake Nieman-Davis, owner of Blake, a 3,700-square-foot denim store in Portland. However, two other Los Angeles denim brands—AG Adriano Goldschmied and Paige Premium Denim—are the store’s top sellers for women.

At Loop Jean Co. in Tucson, Ariz., the vast store carries 40 brands, with 7 For All Mankind ranking No. 8 on the most-favored list in the women’s category and No. 9 in the men’s category. Again, AG Adriano Goldschmied and Paige Premium Denim topped the list for women.

“7 For All Mankind still has a very positive name and following,” said Ted Greve, the store’s co-owner. “Denim heads looking for the edgiest and tribally hip offerings may not gravitate to 7 like they used to, but it is absolutely a quality product, and they have very good fits.”

In Los Angeles, high-end denim stores such as American Rag and Madison don’t stock 7 For All Mankind, opting for more-trendy labels that bring in more revenue. “We are not geared toward a department-store customer,” said Jennifer Althouse, denim buyer for American Rag. She carried 7 For All Mankind about three years ago but said she didn’t do well with it. Her top performers are J Brand, Current/Elliott, AG Adriano Goldschmied, Paige Premium Denim and Joe’s Jeans.

Miguel is hoping to change that. “Ultimately,” he said, “we want to be the dominant global denim lifestyle brand.”