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COOL HAAN

THE VENERABLE RETAILER OFFERS A WIDER MERCHANDISE SELECTION TO WOO THE YOUNGER SET

By Kimberly Tchang

Classic infused with a cool, contemporary twist: That's how Jim Seuss sees the new Cole Haan. Think colorful leather satchels, slim lambskin jackets and fashionable eyewear. CEO Seuss is taking the venerable luxury brand well beyond shoes and expanding its line of accessories and outerwear with younger consumers in mind. At the same time, he is stepping up an aggressive rollout intended to take the chain from 65 stores to 175 over five years.

Fittingly, Seuss himself, who joined Yarmouth, Maine-based Cole Haan two years ago, has a luxury pedigree that is equal parts traditional and cutting-edge. He was president of jewelry firm Harry Winston and CEO of fashion design house Stella McCartney. His turnaround team includes design director Paul Overfield, who has worked at Calvin Klein, Gucci and Oscar de la Renta.

This fashion-forward, classic-with-a-twist sensibility is evident in Cole Haan's new spring line, which features women's snakeskin-trimmed sling backs, and handbags in safari-inspired custom prints. Yes, the luxurious men's penny loafers are still there, but so are woven-leather court sport shoes with contrast trim.

Industry watchers note that after stumbling through years of missteps, Cole Haan may finally be on track to redefining itself for the future. “There is a real taste for luxury goods out there among young people today,” said Alex Biesada, retail industry editor at financial data firm Hoover's. “Kids are more exposed to it now, and they're more brand-conscious, so if Cole Haan wants to build a stronger retail presence, they need to attract them.”

It is also important to think beyond a brand's past, says Pamela N. Danziger, president of Stevens, Pa.-based Unity Marketing and author of Let Them Eat Cake: Marketing Luxury to the Masses — as well as the Classes. “You have to have something new and fresh,” Danziger said. “You've got to maintain the integrity of your brand, based on its heritage, but to really grow, you've got to have your foot in the future too. You have to have a twist.”

Cole Haan executives declined to be interviewed for this story, but industry reports say the brand's retail sales last year were about $200 million.

Nike purchased Cole Haan in 1988, but the two never formed a cohesive synergy. Notably, Cole Haan's G Series, a sporty shoe line that incorporated Nike's air-cushion technology into the sole for comfort, never resonated, and the company has said it will discontinue the line.

“Cole Haan is a very high-integrity brand that had a very strong following, but they've moved erratically for the past decade,” said Stanley L. Eichelbaum, SCMD, president of Marketing Developments, a Cincinnati-based retail strategy firm. “There are a lot of consumers out there who want to see them get back into a real fashion role rather than into gimmicky products.”

Cole Haan's merchandise mix is currently two-thirds shoes and one-third accessories, but Seuss is rebalancing that to about 50-50. In the process, he has added upscale eyewear and hosiery to the mix. The company's plans also call for a series of signature collections by avant-garde jewelry designers, sculptors, architects and industrial designers. This twist will also be seen in Cole Haan's newest stores, which will feature a sleek wood, chrome and glass exterior, as well as a rear lounge area outfitted with sofas. The stores will measure about 3,500 square feet. The existing stores are to be redesigned by 2011.

The company has planned a major ad campaign with a lifestyle approach to highlight its new direction. Analysts say this is critical to help consumers view Cole Haan as a true fashion resource.

Certainly, the emphasis on drawing younger customers appeals to shopping centers. At King of Prussia (Pa.) Mall, Anne Ford, assistant marketing manager, embraced the move. “I think they're right on target,” she said. “Here we definitely have an affluent customer base — not only our mainline Philadelphia customer, who tends to be more traditional and classic, but also our Center City Philadelphia customer, who tends to be a little younger and edgier.”

Retail watchers say Cole Haan's new direction is reminiscent of Coach, which turned its sagging brand around six years ago by adding bold color and flash to its handbags and expanding further into accessories. Today Coach is the industry leader, commanding nearly $3 billion in sales yearly.

If timing is everything, then Seuss's biggest gamble could be those ambitious expansion plans. Some see Cole Haan's desire to more than double its U.S. stores at a time when some retailers are closing stores as audacious. “It's a scary retail environment, and first Cole Haan has to build the demand with its designs,” said Candace Corlett, a principal of WSL Strategic Retail, a New York City-based retail consulting firm. “Just because you build a store today, doesn't mean [consumers] will come. This is a climate of a very cautious, responsible shopper, and that's crossing all income groups.” Still, the luxury consumer is by definition better insulated against economic downturns than most people. “The luxury consumer feels big economic pain last, and they also come out of it first,” said Danziger. “They're more resilient.”

In the end, what may matter most is how well Cole Haan can execute its new designs and communicate its image as a fashion resource, some say. “If they can do all that, then this will be as good a time [to expand] as any other,” said Laura Pomerantz, a principal of PBS Realty, a New York City-based luxury commercial real estate firm. “There are plenty of other companies who've launched in difficult times, and they did well because they had a great product.”