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FEDERATED STORES FASHION OWN LINE OF BRANDED CLOTHES; RETAIL CHAIN WILL TAKE ON GAP AND SUPPLIERS WITH ITS I.N.C.

By Published on .

Federated Department Stores, one of the nation's leading retailers with more than $15 billion in annual sales, is going head-to-head with its traditional fashion suppliers-as well as vertical retailers such as The Gap-with a fully branded line called I.N.C., International Concepts.

MORE EFFORTS AHEAD

The launch this week is the first of an expected eight to nine brand marketing efforts in the next 12 to 18 months from Federated's product development division.

"The national brands certainly have their own market strategies," said Joe Feczko, senior VP-marketing for the division.

By moving into its own branding efforts, he said, "We can control our own destiny," instead of being at the mercy of suppliers that dictate to retailers everything from style to fabric quality.

The move is a big step by Federated into vertical retailing, a model used by The Gap, AnnTaylor and others that design, manufacture and market product for their own stores.

"I think retailers more and more" are moving to vertical models, Mr. Feczko said, especially in light of current and predicted changes in retailing through channels such as TV, the Internet and direct mail.

HELPING SMALLER OUTLETS

Also prompting the move toward product branding is a need for a fashion line at smaller Federated outlets, which, unlike the company's big downtown outlets such as Macy's Herald Square in New York, don't carry Calvin Klein and other upscale fashion plates.

"For a lot of our smaller units, I.N.C. is the big fashion brand,"

said Mr. Feczko.

The new campaign, from Laspata/DeCaro Studios, New York, features model Trish Goff and rocker Donovan?? cq as appears, first and last names Leitch and is tagged with words that rhyme with a pronunciation of the line's name, such as "Think I.N.C."

The campaign will run in national women's magazines, on outdoor boards, such as Vogue, as well as on billboards,bus cards, phone kiosks and in in newspapers. Spending was undisclosed.

As part of an integrated marketing plan, I.N.C. will borrow the in-store shop store-within-a-store concept from other designers as well as the and the use of promotions and gift-with-purchase.

"All the tools of the design manufacturers' arsenal we intend to employ and use," said Mr. Feczko.

PETITE LINE ADDED

Macy's has had a small private label under the I.N.C. name since 1993; with the major branding move, a petite line is being added to the product mix, which includes casual and sports separates ranging in price from $28 to $250. It is being sold at Macy's, Rich's, Lazarus and Goldsmith's stores. Federated's Macy's first launched I.N.C. in 1993 as a private label brand.

Federated is somewhat late in moving into the branding arena.

J.C. Penney Co. recently launched a fall campaign for its St. John's Bay line, and other retailers such as Sears, Roebuck & Co.aggressively have marketed their private label products private labels, such as Sears, Roebuck & Co.'s Canyon River Blues. Sears said that line, launched last year, has exceeded sales expectations by 20%.

Also, upscale retailers, such as Barneys New York, have hired designer Ronald van der Kemp to launch a special collection. In another twist, retailers Bergdorf Goodman, Neiman Marcus and Holt Renfrew have hired a designer to produce a line that will be sold only at their stores.M, a spokeswoman said.

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