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Tracy outlines Li & Fung's challenges

The challenge facing Li & Fung as it prepares to re-launch Royal Velvet is creating a product package that will get retailers to free up shelf space given away to other towel resources, said David Tracy, the marketer who created the Royal Velvet nameplate half a century ago.

"They have to make it sufficiently attractive to retailers who've already given the real estate away. They have to find a way to make the product really special," said Tracy, who developed and launched the Royal Velvet franchise at the former Fieldcrest Mills. A master brand-builder, Tracy went on to create the Ralph Lauren Home program and the Calvin Klein Home program.

And no one knows better than he that the sizzle is just as important as the steak, especially in a newly global marketplace.

"They're going to have to frost the cake pretty damned good. The brand has been off the shelf long enough that they've got to provide the retailer with a compelling reason to take it back. So baking the cake isn't enough; they've really got to spice it up with the frosting. Just putting out a plain-Jane product isn't going to be enough."

Said Tracy, "The brand is terrific — that we know. They've got the dough, that's a given. And you assume they'll source a top-quality product. But even all of that isn't enough. What they're going to need is the organization, the people, who understand the market here, the culture. The organization is important. If they get that right, they've got a really good chance."

Historically, said Tracy, "The margin has always been there with Royal Velvet, so that shouldn't be a problem, even with the royalty they'll be paying. Look at it this way ... even if they're paying a royalty in the range of 5 to 7 percent, they're making a lot of money."

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