Dangers of dilution

Carole Sloan, May 31, 2004

A little item in a business publication last week opened up the potential for enormous change in the designer world.

The item: Kohl's will be selling Chaps, a Polo Ralph Lauren product for menswear next year.

Not earthshaking news at first glance. But let's take this information a step further. How could this translate into the home textiles world, where the department store community has zealously guarded its turf — not just with Ralph, but with Calvin, Donna, Tommy and soon Kate.

Let's go back to the late '90s when it was almost a fait accompli that Ralph's home textiles stuff was on the trucks, on its way to non-department store accounts, or so the legend has it. Humongous pressure by certain department store executives virtually stopped the shipments. After all, when one has more than a dozen departments in a store selling a single brand, they need to be catered to. And so they were.

It was the same way back in the '80s when JCPenney had a special made-for-Penney Martex program. One would have thought the world was coming to an end with the moans and despair that emanated from the conventional department store community.

And then Penney picked up Royal Velvet — sort of. It was a big winner in the company's bridal registry program, but didn't hit the stores' floors. And all was right with the world, until the Pillowtex mess.

And of course, now we have Kohl's in the Royal Velvet derby with the renaissance program. Who else will be frolicking in the RV playground is still to be determined.

But now we're in the early 21st century and all the rules are different.

Design companies with licensed programs, especially public ones, are being forced to find ways to expand their presence with consumers — without damaging their primary franchise. This is the tricky part.

When any one of the big names in the designer world of home textiles looks beyond its natural turf, the danger of dilution on many levels is omnipresent.

In home textiles, each of the key designers has a step-down brand, but the distribution is defined. How long this will last in home textiles could well be influenced by the Chaps and probably other programs in the works outside of our realm.

The danger is the dilution of the brand. Once a brand no longer is deemed special in the minds of the primary target customer, problems mount incrementally.

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