WWD last week caught up with Lee Chaden, chief executive officer of Sara Lee Branded Apparel, who gave an overview of the spin-off and discussed business strategies for Sara Lee Branded Apparel.
WWD: Was Sara Lee ahead of the curve? A number of industry experts believe it will continue to be a difficult [apparel] market overall.
L.C.: Our business in North America is healthy and growing. Sara Lee Corp. based its decisions and transformation plan on its desire to be a more focused food, beverage and household products company. Spinning off apparel was a logical result of that strategy, not a driver.
WWD: Will it be getting tougher for apparel brands to exist as more retail mergers take place?
L.C.: Actually, quite the contrary. The customers we are growing the fastest with are the larger retailers. Larger retailers need to team up with suppliers that have scale and that can deliver big, value-added ideas to drive consumers to their doors through product innovation and strong consumer marketing programs.
Retailers’ scale also benefits us, as it allows us to tailor programs for them we know we can cost-effectively deliver. C9 by Champion, a joint development with Target Stores, is an excellent example. By developing and supporting large-scale programs, we help generate customer traffic to our retail partners, with consumers who buy not only our products but also other products in the store. It’s a winning combination that drives collaborative, long-term strategies for both of us.
WWD: A growing number of retailers like Wal-Mart with its George brand, Kmart with Joe Boxer, Macy’s with Jenny and Penney’s with nicole by Nicole Miller are increasingly taking up [innerwear] market share. How can the Sara Lee apparel brands compete?
L.C.: Store brands and national brands can be highly complementary. Each has a different mission and meets a different need. What a national brand can do is drive consumers into a store. Take the Hanes Tagless T, for example. When we introduced this product innovation with major public relations and advertising support, category sales jumped nearly 10 percent. Category experts such as us have the ability to bring new, value-added ideas to market that can drive that kind of traffic.
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We believe that only national brands that are number one or two in their categories really interest retailers. We have the leading brands in the categories in which we compete, household names that consumers know and trust. That makes us the kind of partner that benefits retailers. Simply stated, successful retailers know their customers and what drives them. We are experts in our categories and know how to drive growth in those categories. Together, that’s a powerful combination.
WWD: Any other thoughts?
L.C.: The spin-off is an extremely positive step for our customers, Sara Lee shareholders and our employees. Our business today is very healthy. Hanes, Champion, Bali, Playtex and Just My Size have tremendous brand equity and growth potential. Given our scale, the strength of our brands and the quality of our people, we are fully confident we can accelerate our growth curve as an independent enterprise.
With approximately $4.5 billion in annual sales, we would become a Fortune 500 company and one of the world’s largest apparel companies. What a great place to start.