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Affordable Fab

Fab_without_a_fortune Just because class is over does not mean we aren’t keeping an eye open for more links to class.  Frankly no one has her finger on the pulse of America better than Oprah Inc, and I am serious about that.  Today’s show was on my favorite topic, DESIGN. 

Click on the photo at left and you will see Sarah Jessica Parker, star of Sex in the City, with her new clothing line-BITTEN!  Now you would probably think well here we go, just another high priced snob fashion line by a star for her snob friends, well no way.  Every piece, dresses, skirts, handbags, all priced at 20 bucks or less!  Steve & Barry’s  are low priced clothing stores located in shopping malls.  Gee, stop and think, this is just the opposite of what the big box retailers are doing, while JCP and Sears are trying to flee the mall and join Target in stand alone stores, these guys leased another 3.5 M square feet last year.  Click to read about how they do it.  Would you believe a 70% compound ten year sales growth rate?  Malls who are losing tenants are glad to see these guys on show up. And Steve and Barry are able to negotiate build out rates as high as $80 paid for by the mall desperate for shoppers.

This is classic managerial accounting-figure out what folks want and get the price affordable.

Next on the lineup

Victoria Hagan is designing for Target-affordable interiors

Stephon Marbury decided to do something about $130 sneakers, his do the same thing and are $14.95. Again, opening at Steve & Barry’s.  This is particularly aimed at stopping theft and violence involved with high priced sneakers among young people.

Isaac Mizrah is designing affordable wedding dresses at Target-try less than 200 bucks, many under $100.

Put it all together, and you can see why WMT has the blues. As we discussed this semester, TGT has grabbed the up market design trend from all the rest, Sears is adrift with Lands End, WMT can’t get going, Mervyn’s is on the rocks.  So TQM wins again, keeping your eye on the long term goal remains important.  Trying to shift in mid stream as WMT is doing, Prices are Going Down!  But Golly we are Trendy, at the same time just does not work. 

Bottom line, this is another triumph for my emphasis on the importance of Design.  We were not at Steve and Barry’s today but at Dillard’s at North Park Mall. I could not help but notice an entire Porsche Design Store!  On the TGT website I hyperlinked above, note the number and names of famous designers.  I would say TGT has firmly established itself as the affordable go to design center.   Sarah JP said she was hooked after the first time she walked into a  Steve and Barry’s.

Clearly this is another triumph for the imnportance of DESIGN!

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3 responses to “Affordable Fab”

  1. Ken Savage Avatar
    Ken Savage

    I agree, who’s going to steal $15 shoes when it’s so much easier to buy. I wonder how much these things really cost to make or are they loosing money to make a point.
    Either way, great marketing.

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  2. April Y Avatar
    April Y

    I watched a segment on 20/20 about the shoes Stephon Marbury are making and I was very impressed. I think it is a bout time that these multi-millionaire atheletes remember how most of them grew up unable to afford the same type of shoes they are marketing now. He said he came up with the idea after remembering how much his mother struggled and how he wanted the name brand shoes like everyone else, but couldn’t afford them. In one scene they had a designer do a cut out of Marbury’s shoe and that of another more expensive brand shoe, and found there was no structural difference and that beside the price, the shoes were basically the same. While I can not be sure how or where the shoes are being manufactured, you can almost guarantee that it is costing very little in that aspect, so I am sure some profit is being made. This is the problem with the clothing sold at WalMart. They were obviously of a lesser quality, so no one was really willing to buy clothes from them. Unfortunately for them, while they may have increased the quality, the perception of the public is still of inferior products and even with the new advertising campaigns, I am not sure how soon, or if ever, that will change.

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  3. Dennis Elam Avatar
    Dennis Elam

    And that is the Starbury success story, one can only hazard a guess at what Nike et al were making at $100 a shoe if Stephon is making money at 14.95. The lesson for students with WMT is that once you establish a spot for yourself, prices going down, that is the way people see you. Many an actor in a successful or even moderately successful sitcom on TV has discovered the same thing, once you get typecast, no one can accept you as someone else on the screen.
    What’s that saying, careful what you wish for?

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