Calvin Klein, Gucci, Chanel, Prada, Louis Vuitton, Burberry.
Irvine-based St. John Knits International Inc. wants to join the ranks of the world’s great fashion houses.
Celebrities and socialites already know the upscale women’s clothier for its hallmark knit suits. Now Chief Executive Richard Cohen, who joined St. John’s in August, wants to accessorize.
The big brands,the Guccis, the Calvin Kleins,make the bulk of their profits from handbags, hats, belts, wallets and other accessories, he said.
“Most of our money comes from apparel,” Cohen said.
But changing St. John’s sales mix won’t be easy. Accessories make up a small part of St. John’s $400 million in yearly sales and haven’t grown much. Cohen recently closed a jewelry plant in Santa Ana.
“It’s a process,” he said. “Because our heritage is ready-to-wear.”
Accessories are just part of Cohen’s plan. He said he also is looking to open more stores abroad, target younger women and transform stores from a ladies-who-lunch look to a glamorous California feel.
“Everything is evolving,” Cohen said.
Cohen is putting his mark on St. John, a company synonymous with the founding Gray family. He’s bringing a big fashion feel to the apparel maker by hiring executives from Calvin Klein Inc., Hermes of Paris Inc. and the U.S. arm of Italy’s Gruppo Ermenegildo Zegna, from where Cohen himself was recruited.
“The Gray family determined it was a moment for them to reach out to a broader customer,” Cohen said.
The Grays,retired patriarch Robert, wife Marie, the company’s chief designer, and daughter Kelly, who serves as creative director,found Cohen through a headhunter, he said.
“I wanted to come to a company that had a huge upside,” Cohen said.
Cohen, a native of Britain, seems a good fit. He started his career in 1976 as a designer for Seattle-based London Fog Industries Inc. He learned the ropes from designer Bill Blass and supervised distribution for London’s Burberry Ltd.
For the past 16 years, Cohen was chief executive of Gruppo Ermenegildo Zegna USA, the U.S. arm of the Italian men’s clothing designer.
“What I do for a living is I’m a brand builder,” he said.
Since joining St. John, Cohen’s added a layer of management to the company.
He called on former Ermenegildo colleague Robert Green to be vice president of sales and marketing. Max Weinstein was lured from Calvin Klein to be vice president of operations. And Elfriede Campbell came from Hermes to be vice president of human resources.
Bruce Fetter, who along with Kelly Gray served as co-chief executive until September, now is chief operating officer reporting to Weinstein.
Cohen’s also signed up a New York advertising firm to help revamp the company’s image. The campaign is being kept under wraps for now.
|
|
||
|
Fashion family: Marie, Robert, Kelly Gray |
St. John, founded in 1962, is no stranger to change. In 1989, the Grays sold a majority stake to Germany’s Escada AG, which took St. John public in 1993. Six years later, the Gray family took the company private in a $520 million deal financed by New York-based Vestar Capital Partners, the company’s majority owner today.
Vestar backs Cohen’s expansion plans, according to James Kelley, Vestar’s president and chairman of St. John.
“It’s a challenge to grow,” he said.
The goal is to get a majority of sales from accessories, according to Kelley.
“We haven’t been able to unlock the code to that in almost six years that we have been involved,” he said.
St. John’s other big effort is to sell more of its clothes itself. For the past couple of years, St. John has been opening and remodeling stores as sales growth at department stores slowed.
The company has 31 stores of its own. Finding the right spots for the upscale boutiques is the hard part, according to Kelley.
“It’s not like Target,” he said. “You can’t put them all over the place.”
Kelley, who was mum on Vestar’s long-term plans for its investment in St. John, said the firm is counting on Cohen to make St. John a global brand.
“Richard Cohen isn’t a designer,” he said. “He’s a professional manager.”
Cohen’s charge echoes that of one of his predecessors, Hubert Mullins, who took over as chief executive in 2001.
Mullins said he intended to develop St. John’s accessory lines and grow internationally. But he didn’t last long. At the time of Mullins’ departure, St. John said it was difficult to find someone from outside the Gray family who understood the business.
Cohen knows how to work with families,Ermenegildo Zegna is a fourth-generation family business.
“I’ve only worked for family businesses,” he said.
Even with the changes Cohen has brought, he said he’s not taking the family out of St. John. He said he’s making a family business more professional.
Kelly Gray called Cohen easy to talk to.
“Richard is very accessible,” she said.
Cohen and Gray seem to have a rapport. She said she has access to Cohen on what she calls “a need to know” basis.
“Kelly and I are a team,” Cohen said. “The future of this company relies on Kelly being the creative director.”
Since Cohen has come on board, Gray has signed a three-year contract.
Whether Gray remains St. John’s signature model is in question. Since her teens, Gray has been the face of St. John. She appears in ads with tanned, handsome male models and wild animals in exotic locales.
St. John’s February ads feature her in Yucatan.
In an interview last fall with a Cleveland newspaper, Gray said she’d continue modeling for “not that much longer.”
She declined to say what her modeling future would be and was equally short about the company’s marketing plans.
“It’s a closed topic only because it’s part of the strategy,” Gray said.
Giving details would dampen the “shock value,” she said.
Cohen and Gray said they sometimes butt heads and agree at other times. But it is a partnership, they said.
“When you are an adversary and partner at the same time you take the level of ideas up two notches,” Gray said.
She said she was happy to be relieved of her co-chief executive duties.
“I was not a seasoned executive,” she said. “It was a job I never wanted. But it was a job I took.”
Fetter, who’s overseen St. John’s day-to-day operations for the past few years, didn’t return calls for this story.
The challenge is to sell St. John’s new thinking to everyone else at the company, Cohen said.
Workers are excited but they’re not sure what the changes mean for them, he said. So Cohen and Gray said they’ve been holding meetings. St. John employs about 4,900 people.
“We ask for feedback,” Cohen said. “And we listen.”
Cohen said he wants workers to “get their international glasses on.”
They’ll need them. St. John plans to open more stores abroad than in the U.S., he said.
Global stores help push up St. John’s sales for the 12 months ended Oct. 31. Revenue rose 7% to $396 million for the period.
But new stores have come at a cost. St. John’s profit for the 12 months fell by 10% to $13.4 million, largely because of remodeling and expansion costs.
St. John’s stores are set to be revamped to reflect glamorous California, according to the company. The first few stores are expected to change in about six to nine months.
“I’m serious when I say I want our stores to have a California look to them,” Cohen said.
Televisions in the stores might be tuned in to California news stations and there might be picturesque photos and paintings of Golden State landscapes, he said.
Cohen, who’s spent the past several years in New York, seems enchanted with his new surroundings.
“California affords you the opportunity to live life a little fuller outside the office,” he said.
But he said he also wants to bring some of New York’s speed and drive to the company.
Cohen has a wife and four children who still are back East. They plan to join him after the school year, he said.
