29 July 2010

Macy's Hopes Madonna's Line Puts Retailer On Map With Teens

The Wall Street Journal

Macy's Inc. doesn't plan to sell cone bras to its customers, but the department store is hoping its new line by Madonna and her daughter Lourdes will resonate with a new generation of teens who didn't grow up listening to the Material Girl's music.

The approach is Macy's first deep foray into "fast fashion," apparel that is trendy and moves out of doors quickly. The line, called Material Girl, puts Macy's up against specialty stores like Forever 21 that devote their entire floor spaces and fortunes to teens. The potential return is significant, with roughly $25 billion spent annually on teen apparel, according to NPD Group.

The line also helps Macy's reinvent itself. The retailer for the last year or so has been revamping the way it receives and sells merchandise, with significant emphasis on tailoring inventory to local tastes.

Material Girl makes its debut Aug. 3, when Macy's opens curtained-off areas in stores to introduce a line that aims to be both edgy and accessible. Tutu-style dresses and alligator skin shoes will stand aside corduroy jackets and stone-washed jeans.

The line "is a real image enhancer for us," said Martine Reardon, Macy's executive vice president of marketing. "The fact that Madonna and her daughter are behind this should make it a real winner."

Teens shopping last week in the junior's department at Macy's Herald Square store in midtown Manhattan expressed interest in the line--and added that it might have an added benefit..

"I think it's cool," said Jessica Allen, a 15-year-old from Queens. "My mom wants to see it, too. She likes Madonna and her look."

While there are certainly influences of early-career Madonna in the line--sheer lace tops and midrift-baring black leather jackets--there are no over-the-top items, like the cone bras that brought Madonna personal fashion notoriety.

Macy's and Iconix Brands Group Inc. (ICON), which is collaborating with Madonna and Lourdes on the line, said it was primarily influenced by Lourdes' fashion sense, with research extending to going through Lourdes' closet.

Macy's will not disclose its financial arrangement with Madonna or what the retailer hopes to see in sales. Iconix has said in a regulatory filing that it will pay Madonna as much $30 million to partner with her on fashion brands. An Iconix spokeswoman said Material Girl, which is exclusive to Macy's, is one of the brands and declined to break out what percentage of the $30 million it represents. Madonna and a partner own 50% of Material Girl, with Iconix owning the other half.

Macy's will initially place the line in 200 of its roughly 800 stores, which the company said is a pretty typical number of locations for a merchandise rollout. The department store will gauge demand and consider adding the line to additional locations, Reardon said. The apparel, shoes, jewelry and handbags will range from $12 to $40. Macy's already envisions extending the line into fragrances next year.

Consumers will soon be seeing Material Girl promos, with Macy's planning to advertise the merchandise in magazines, online, on billboards, over the radio, in movie theaters and through social media. Macy's declined to say how much the advertising campaign will cost.

Macy's has chosen the right representatives to step up its presence in teen retailing, while adding to its roster of products backed by celebrities, said John Long, retail strategist at Kurt Salmon Associates. "You have the more youthful element with her daughter, and Madonna has demonstrated staying power, appeal across generations and an edge."

Department stores have to work hard to avoid being thought of as dated, given the proliferation of specialty stores that focus just on teens and young adults, and the only downside would be if Material Girl did not catch on, said John Rosen, executive director of Marketing Consulting Associates. "If it misses the mark, it will be harder to get that audience to give Macy's next attempt a shot."

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