NEW YORK, United States — The US contemporary market has fragmented in the past five years, mostly due to the myriad struggles of upscale department stores, where many of these mid-priced brands did a significant part, if not all, of their business. The survivors are now figuring out how to scale in new ways and capture the attention of a consumer spoilt for choice.
Elizabeth and James, founded a decade ago by Ashley and Mary-Kate Olsen, is one of those brands. In 2015, the designers took a huge step forward by bringing the label in-house after the expiration of their deal with licensee Jaya Apparel Group, subsequently revamping the collection to reflect something less merchandised and more personal. Last year, they opened the brand's first directly owned store in The Grove, Los Angeles' popular outdoor shopping centre, which they're using as a sort of testing ground for new concepts.
One such experiment consisted of peppering the store with select vintage, which included band tees, jeans and sweatshirts. The lineup quickly turned into 20 percent of the store's overall business, which spurred the company to open up vintage pop-ups at both Neiman Marcus in Beverly Hills and Bergdorf Goodman in Manhattan this summer.
"We really look at what's happening in the market as an exciting opportunity," Ashley says. "We know our customer, we like being able to make noise, we like being able to be disruptive a little bit. More and more, our partners are willing to hop on board with that."
The Bergdorf concept, which opened in July, was originally slated for a month-long run but has been extended through fashion month. And while the Neiman Marcus store has been open for under two weeks, the selection is already at a 40 percent sell-through with certain categories sold out entirely.
"It's something that's working right now and it's exciting," says Mary-Kate. "In a moment in time that feels not so positive, we've been able to find a silver lining."
It's no surprise, then, that Elizabeth & James is taking this success as a cue to blow out the category. For the Spring 2018 season, EandJ Vintage — which includes pieces ranging from $115 to $595 for straight-from-the-source, curated vintage to customised fur pieces priced between $795 and $3,500 — will be open to a wider range of wholesale partners. (While the curated vintage will hit floors in the spring, buyers can place immediate orders for customised pieces now.) "For this season, I'm hoping that [EandJ Vintage] will be 10 percent of people's buy to start with," says Mary-Kate. "Then they can see the success, and we'll be able to replenish immediately."
The goal? To make EandJ Vintage not only 20 percent of the business at their directly owned store, but 20 percent of the business overall. "At first it was about going to vintage stores and flea markets," says Mary-Kate. "But we have found partners that have made this scalable."
Currently, the brand is stocked at 600 doors worldwide across apparel, handbags, jewelry and eyewear. And while the private company does not disclose revenue figures, it saw double-digit growth overall in its most recent fiscal year and projects the same for 2018. Right now, the overall business is driven by casualwear with the pricing sweet spot of handbags, for instance, hitting around $200. (Dresses used to be a main driver of revenue, however they now only make up about 20 percent of the business. Knitwear and tops, on the other hand, are the label's fastest-growing categories.) In the vintage category, or "third item" pieces, like bomber jackets, have resonated.
To be sure, Elizabeth and James is not the only label to bank on the appetite for casual vintage. Consider the blockbuster success of Redone, which updates the silhouettes of old Levi's, or Reformation's dead-stock cashmere sweaters. Indeed, the global resale market for apparel reached $18 billion in 2016 and is expected to hit $33 billion by 2021, according to a report released by resale site Threadup. But the designers believe their specific point of view sets EandJ Vintage apart.
And they may very well be right. To be sure, it's just one element of a far larger strategy to strengthen Elizabeth & James' positioning in the new market. Part of that will be increasing direct sales — currently 7 percent of the business — by opening new physical retail stores but first launching e-commerce in time for the 2017 holiday season. The online launch will coincide with the introduction of a new yet-to-be-announced category, sold entirely direct-to-consumer. Then there's the Nirvana fragrance collection, which hovers in the top-five sellers at Sephora and recently launched at Harrods — with an additional roll out in the UK at Liberty and Harvey Nichols later this year — as well as select Lotte stores in Korea and David Jones and Farmer's in Australia and New Zealand.
International — which currently makes up 20 percent of the business — is a focus not just for the fragrance, but for the main line as well. While Elizabeth and James, like many contemporary brands, is associated with department stores in the US and has a strong presence in UK's biggest retailers including Selfridges and Harvey Nichols, much of its business abroad is in independent boutiques. "They really can give you the feedback," Ashley says of working with independent retailers. "They're much closer to their customer."
And that's exactly what Elizabeth and James wants. "I think we have a good feeling about who our customer is and what she is responding to," Mary-Kate adds. "[We are] going with that feeling and trusting our instincts and trying to get ahead of it."