Will this Daisy help sales grow?

Kohl's pins hope on trendy women's apparel

By DORIS HAJEWSKI
dhajewski@journalsentinel.com

Posted: Feb. 21, 2004

New York - Kohl's Corp. rolled out the pink carpet here for its first celebrity fashion event - a new women's clothing line named for Latina talk show personality and model Daisy Fuentes.

Against a backdrop of salsa music and pink cosmopolitan cocktails, the Menomonee Falls-based department store chain presented a trendy casual line aimed at boosting sales by appealing to women in their 20s and 30s.

"It's for the consumer who wants to be fashionable but can't fit into junior clothing," said Haim Dabah, chief executive of Regatta, the company that developed the line for Kohl's.

The glitzy New York launch, at a production studio located just west of Manhattan's fashion district, comes at a time when the chain is trying to revive interest in its women's apparel offering.

For the past year, sales in that part of the store have sagged, pulling down the company's sales and earnings.

For the fiscal year that ended in January, Kohl's same-store sales declined by 1.6%. The company, which in recent years had been the darling of retail stocks, has found itself in the uncomfortable position of issuing earnings warnings for the past five quarters. Kohl's will report fourth-quarter results on Thursday.

The stock price has reflected that performance and has languished below $50 during the past holiday selling season, down from an all-time high of $77.75 in May 2002. Shares closed down 53 cents Friday at $49.90.

But a discussion of the reasons for Kohl's recent stumble wasn't part of the program Wednesday night, which was not attended by Kohl's top executives.

"Tonight I'm here to talk about the launch of the Daisy Fuentes line," said executive vice president of merchandising Rick Leto.

In past public statements, the company has said its inventory got ahead of demand, Leto noted, declining to pinpoint the reason for the lack of interest from customers.

"Some people said it was too fashion-forward, some said it was boring," Leto acknowledged.

"I think it's finding the right balance."

Lively new offerings

The new Daisy line, in black, white, khaki and the spring season's hot color, pink, definitely is not boring.

The offering includes tops ranging from form-fitting tanks and T-shirts to a black lace top with three-quarter length sleeves. Pants styles include hip-riding spandex short-shorts, hip-huggers in long and capri lengths, and satin-look cargos in both lengths.

In the future, the brand could be extended to other departments in the store, such as intimate apparel, Leto said.

"I like it. I'd wear that," said Elizabeth Fortin, a 22-year-old partygoer who works for Mindshare, a New York media company.

Kohl's choice of Fuentes as its first fashion spokeswoman comes at a time when the chain is expanding in the Southwest, where Hispanics make up a large percentage of the population. It follows similar efforts by other large retail chains. Kmart recently launched a Thalia Sodi line, and Sears has enlisted Lucy Pereda, known as the "Hispanic Martha Stewart," as the icon for a new clothing collection.

Kohl's isn't portraying its Daisy line as a Hispanic marketing effort, however.

"We've done a lot of research to come up with a fashion authority who has crossover appeal," Dabah said of Fuentes.

"She was our first choice."

Retail consultant Anne Brouwer, a partner at McMillan & Doolittle in Chicago, agreed.

"She has very broad appeal, more so than with Thalia," Brouwer said in a phone interview.

"I think they've hit a more mainstream brand with Fuentes."

The Kohl's party attracted more than 300 guests, mainly young people who work in fashion and media-related jobs in Manhattan.

Invitations promised drinks, snacks, music and gift bags - an important draw these days for marketers trying to fill a room.

"This is a very nice party," said Erin Hewitt, a 29-year-old producer for WCBS-TV in New York.

Positive reaction at home

The Daisy Fuentes clothing is in 183 Kohl's stores now, including two in the Milwaukee area, in Brookfield and Menomonee Falls.

Another group of stores will get the Daisy line in the fall, and the company plans to have it in all stores by early 2005, Leto said.

The clothes were already marked at 25% off at the Brookfield store Friday, and were getting good reviews.

"The detail on this is adorable," said Nancy Estabrook of Wauwatosa as she admired a pair of black capri pants with a buckle on the back.

Estabrook has daughters ages 19 and 31, and she often shops with them. The problem for her daughters has been that youthful styles are mostly offered in junior sizes designed to fit slim teen bodies.

"If you're a little bit heavier, if you don't have that kid body, you're going to end up dressing like an older person," she said.

"I think this will fly with them. Kohl's has nailed it."

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