[Editor’s Note: This article went to print before Monday’s announcement that Stefani Greenfield has resigned as chief creative officer of The Jones Group. She will now serve as global creative consultant at the firm and work on projects for her private consulting group. Click here for more.]
On a Thursday morning last month, five key executives from The Jones Group Inc. gathered for a photo shoot at the company’s midtown Manhattan headquarters. Three years ago, none of them would have been in the picture.
Corporate heads Richard Dickson, Stefani Greenfield and Kathy Nedorostek, along with Stuart Weitzman execs Wayne Kulkin and Susan Duffy, represent the new guard at the company. They’re brand builders and marketers who are obsessed with footwear — and they are leading the dramatic, much-talked-about metamorphosis of the $3.8 billion firm.
There’s no doubt that Jones is a vastly different organization than it was just a few years ago. Once known primarily for its volume-driven apparel business and manufacturing prowess, the Jones team is determined to evolve from a “product-selling organization” to a company led by design, according to Dickson, the president and CEO of branded businesses.
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“[In the past], it was very easy for us to do any [category] and put any label on it,” said Dickson, who was hired by Jones CEO Wesley Card in 2010. “But the world moved on to having a relationship with brands.”
That’s why the executive and his team are focused on a major overhaul of the firm’s core labels: Nine West and Jones New York.
But Dickson also aspires for the company to be recognized as the place to be for emerging brands and as a home for businesses trying to get to the next level, particularly in the accessories space.
So the firm embarked on an acquisition spree, snapping up three major footwear firms — Stuart Weitzman, Brian Atwood and Kurt Geiger —in three years. “There is no doubt that the accessory cluster of our business — footwear, handbags, jewelry — is the growth category. It’s where the action is in the industry. So we’re trying to bring in the talent and grow with the trend,” Dickson said.
The new focus is evident in Jones’ financial results. Today, Nine West is the firm’s largest brand, and footwear and accessories are the biggest revenue contributors, generating 52 percent of sales in 2012, compared with 48 percent in 2011.
While apparel has continued to drag down overall results, footwear has helped counteract some of that weakness. (Overall, the firm reported a net loss of $56.1 million last year.)
Last Friday, shares of Jones rose 5.9 percent on word that activist investor Barington Capital, which owns about 2 percent of the company’s stock, had taken a stake in the firm and was pushing for it to sell off some smaller brands, cut costs, add directors to the board and tighten up operations. According to the Wall Street Journal, Barington urged Jones to hire financial advisers to focus on its core and emerging brands, since it is benefiting from a shift to higher-end brands with the acquisition of names such as Stuart Weitzman and Kurt Geiger.
The shoe momentum is impressive, but there are still challenges ahead, particularly with the unpredictable nature of the economy.
“There was a time when you could track retail sales with the stock market,” Dickson said. “Now we see a robust stock market, but a tough retail market.”
Jones, which has made international expansion a priority, remains conservative about its near-term plays overseas.
“The trials and tribulations in Europe give us a reason to pause. We’re incredibly excited about Asia, but the dynamics are changing. You really have to have the right local talent,” Dickson said.
While there is plenty of hard work ahead, the new team is clearly up for the challenge.
“I can’t believe how far we’ve already come. Everywhere I go, people are talking about what we’re doing,” said Greenfield, who joined in late 2011 as chief creative officer.
At the Core
“We Do Shoe.”
It’s the simple, yet memorable, mantra that is the cornerstone of Nine West’s makeover strategy.
While the label has always had “enormous reach,” according to Dickson, “it wasn’t really narrating to the consumer what it was about.”
To change that, the team is working on a top-to-bottom revamp of the brand.
With a bold flagship revamp, updated product, catchy marketing and a new digital push, the refreshed Nine West aims to be “a democratic fashion brand for all,” Dickson added.
“When we started to dig into it, we worried about trying to be everything to everybody,” he said. “Instead of getting riddled with it, we’re celebrating it. But, to be democratic, you can’t have one representation of the brand. So the goal was to segment it and tell the different stories.”
Those stories come alive in the company’s “Nine & the Gang” advertising campaign, as well as in the relaunched Lexington Avenue flagship in New York, unveiled last fall.
Large LCD screens in the center of the store are surrounded by product walls that highlight specific categories. “The World of Pumps” is one major theme, while there also are “bars” for ballet flats and boots, in addition to dedicated areas for the key trend statements of the season. “Consumers like what they see in terms of merchandise and marketing,” said Nedorostek, group president of global footwear and accessories at Jones. “They understand what the brand represents now.”
Jones plans to roll out the concept to other locations globally, and that’s good news according to industry analyst Jennifer Black of Jennifer Black & Associates. “Nine West has had … less than glowing results in its full-priced stores [in the last year] due primarily to product mix,” she said.
As it re-energizes the retail fleet, Nine West is taking its new message to the digital space, most notably through its Channel 9 network, which mixes original content with e-commerce. Current “episodes” on the site include “Dressed to the 9’s,” where hosts critique red-carpet style, and “Shoe Hoarders,” which goes inside the homes of footwear fanatics. While there’s always a Nine West hook to each storyline, Channel 9 celebrates shoes in general, even touting other brands.
“[Channel 9] and all our social media efforts are uncovering huge opportunity and [fueling] the resurgence of a younger audience for the brand,” Dickson said. To date, Channel 9 has amassed more than 100,000 subscribers and 5.6 million views across the network since launching in August.
The label also is attracting a more diverse audience through attention-grabbing collaborations, such as its recent linkup with high-end retailer Kirna Zabête.
“The mission of these partnerships is to infuse cultural relevance into the Nine West brand and keep it top of mind [with fashion insiders],” Dickson said. “Kirna Zabête has been a sellout on our websites, and we’ve had great press coverage.”
For her part, Kirna Zabête co-owner Sarah Easley said the opportunity to partner with Nine West had come at just the right time, since she and her business partner, Beth Buccini, had just completed a collaboration with Target.
“We whet our design appetite with Target. … Footwear is a category where women can take risks and push the envelope,” Easley said. “Working with Nine West was fantastic because there weren’t any rules. They let us do shoes with crazy ostrich feathers for February and a waterproof collection for April.”
After the six-month collaboration with Kirna Zabête concludes, the brand is planning a partnership with Decades owner Cameron Silver, whose reality show recently debuted on Bravo. (Details of the partnership are still being finalized.)
While overhauling Nine West has been a major focus, Jones also has been working to unlock new opportunity at Easy Spirit.
Over the last several quarters, the brand has rolled out a concept called e360 to highlight the comfort technology in the line and has added more colorful styles to diversify the shoes. “The excitement about sneakers and the active world is benefiting the brand,” Greenfield said.
There’s no question that Jones generated a huge amount of buzz with its high-profile acquisitions over the past few years. Now the company is focused on turning Stuart Weitzman, Brian Atwood and Kurt Geiger into much larger, more global businesses.
“We’ve been spending a lot of our time nurturing and investing in the new portfolio,” said Dickson, adding that the Rachel Roy and Robert Rodriguez brands are also priorities for the team. “We’re becoming a place that is known for our talent and we believe we have found the names that will be the next generation of big brands at the company.”
The most established and biggest success story for the company to date, is Stuart Weitzman, which has been enjoying strong momentum during the past few years. Revenues were $251 million in 2012, up from $235 million a year earlier. “There’s so much opportunity here,” said Black. “I believe Stuart Weitzman can be a billion-dollar brand.”
Jones, which acquired a majority of Weitzman in 2010, bought the remaining stake, as planned, at the end of last year. By all accounts, the team is bullish about the opportunities ahead.
“The business is on fire, particularly in his own stores,” Dickson said, adding that development of the handbag and jewelry business will be important going forward, as well as retail growth. A new flagship in Milan designed by famed architect Zaha Hadid will open later this year, and the brand sees potential for store expansion in Asia, in particular.
As part of its push into new markets, the brand has upped its fashion cred with bolder advertising. This spring, Weitzman has made headlines for its provocative Kate Moss ads, which followed last fall’s campaign with Natalia Vodianova. “That was really the beginning of a new approach to exposure for us,” said Weitzman, who was responsible for introducing Greenfield to the Jones team a few years ago.
The designer, who has an unwavering passion for his work and is fiercely independent, said the union with Jones has been successful because the company respects the expertise of Weitzman and his team, led by Kulkin as vice chairman and Duffy as chief marketing officer.
“I suppose if I had joined a [fashion conglomerate], they would have thought they could do it better than all of us,” Weitzman said. “[With Jones], we haven’t had an argument in three years. You couldn’t ask for nicer people to do business with, and it all starts at the top.”
As Jones works to accelerate the growth of Stuart Weitzman, it is also fueling its newest star player, Brian Atwood. “If there’s any brand to watch, it’s Brian,” Greenfield said, noting that Atwood himself is the most important part of the equation. “He’s an artist, he’s a businessman and he’s an unbelievably diligent worker.”
The designer opened his first flagship on Madison Avenue last year and is eyeing additional retail locations globally. “We’re getting great response from customers who know Brian,” Dickson said, “and as we get more practice with having a store, it will become more and more important.” Additionally, e-commerce has been a key growth driver for the brand, which also has targeted the contemporary market with the B Brian Atwood collection.
“We’re all learning what works and what doesn’t,” said Atwood, who tirelessly promotes his line through social media. “Sometimes building a designer label takes longer than some people expect, but I want to have a brand that’s going to be around for 100 years.”
Jones is working to connect the brand to a bigger audience through envelope-pushing ad campaigns, such as the current one with Eva Herzigova. As far as category expansion, Greenfield hinted that a men’s line could be on the horizon. The designer will unveil his bridal collection next week.
Kurt Geiger is also at the top of the agenda. The London-based company, acquired by Jones in 2011, already has given its parent a much bigger presence in Europe through its wholesale and retail channels. Now Kurt Geiger has its sights set on the U.S. market through a new wholesale deal with Nordstrom Inc. and an ambitious strategy to hit $100 million in the U.S. market in the next three years.
“It’s a really identifiable and spirited fashion brand at a great price point,” Dickson said. “We know there’s a demand for the brand outside Europe and bringing it to the U.S. marks an exciting new chapter for the company.”
Moving forward, Jones plans to pursue more acquisitions, and Dickson is charged up about the future. “There’s a new energy here and a belief in our vision,” he said. “We’re headed to a very different place than the place we were in before.”
[Note: This story has been updated since publication to include news of the recent investment by Barington Capital.]