Lee strides into high fashion to beat slump

Lee jeans’ appointment of US agency Fallon McElligott to its 12m European advertising account (MW April 16) signals its plans to turn round the brand’s poor UK sales by moving into high fashion.

VF Corporation, which owns Lee and Wrangler, faces a monumental task in Britain.

At the end of last year, Lee’s UK sales fell by almost a third compared with 1996 – performing even worse than the 13 per cent decline in the branded jeans market. Lee is the number three branded jeans label in the UK after Levi’s and Wrangler, but the gap between it and the number four, Lee Cooper, is narrowing.

The new campaign by Fallon will give the brand a strong appeal to women, and build on its fashion credentials. A sound reason for targeting women is that, unlike men’s and children’s jeans, the women’s jeans sector is still buoyant. Volume sales of adult women’s jeans grew by one per cent year-on-year in the 24 weeks to March 15. This contrasts with the performance of adult men’s jeans, which fell by 12 per cent in the same period (TN AGB Fashion Trak).

In 1997 Lee’s volume share of the women’s jeans market grew from 4.7 per cent to six per cent. This is crucial given the label’s overall decline – in the 24 weeks to the end of December 1997 its UK sales fell by 29 per cent compared with the same period in 1996 (Fashion Trak).

Yet a spokesman for VF Corporation claims: “Sales of Lee rose steadily in the UK last year.”

Branded jeans became popular in the Eighties, but in the Nineties have suffered at the expense of designer labels and own-label lines. Added to this, trends have shifted in favour of the trouser market, leaving Marks & Spencer in a strong position for sales growth.

As one jeans marketer says: “Consumers are no longer going into jeans stores. They now follow either designer brands or own label. These categories are forging ahead at the expense of the others.”

The age profile of jeans buyers is also changing. The number of under-25s buying jeans has plummeted, while the over-25s are buying considerably more. So Lee must seek older consumers and give them a strong reason for buying the brand.

But by targeting women Lee could miss out on the much larger men’s jeans market. Mintel estimates that in 1997 12 million pairs of women’s jeans were sold, compared with 22 million pairs of men’s jeans.

There can also be pitfalls in trying to give jeans a gender appeal. Wrangler ran the “City Slickers” campaign in 1996 through agency TBWA aiming to build a “Wild West” imagery for the brand. Unexpectedly, sales to women rose. The account was snatched by Abbott Mead Vickers.BBDO in November of that year, and it has succeeded in pushing a distinctly masculine image with its “Rodeo” campaign.

The spokesman also denies the claims by sources close to the company that VF is applying a gender positioning to the Wrangler and Lee brands in the UK. He refused to speak to Marketing Week, but a spokesman says: “It is simply not the case that Lee is for women and Wrangler is for men.”

David Smith was appointed to the new post of marketing director jeanswear in January (MW January 22) after being promoted from European marketing director for Wrangler. As one observer says: “It makes sense to have one person marketing both brands to ensure the right positioning.”

The company ousted Derek Woodgate, its European marketing director for Lee, last January. And it shed Ian Morris, UK marketing manager, last week.

Responsibility for improving the brand’s performance now rests with Smith and Peter Abbiss, who was appointed marketing director for all VF jeans brands in the UK, Ireland and Scandinavia, last week.

The moves are part of VF’s establishment of a single marketing unit for northern Europe.

VF plans to revive its fortunes in the jeans market through launching new labels. Lee introduced a fashion-led sub-brand called Lee Riveted in the US a few years ago. According to a spokeswoman for Lee in the US, the line was so successful that Lee’s core brand was given a stronger fashion edge in 1996.

VF is planning to launch its own budget label Old Axe in the UK (MW April 2) – expected to cost about 8 a pair and designed to fight off own-label competition. But it introduced its cut-price Maverick brand in 1994, which is understood to have been withdrawn from mainstream distribution in 1996.

Lee has an advantage in that it lacks a strong positioning, and this could work in its favour as it develops a new image for the brand. One observer says: “I have always thought Lee is a lucky brand as it has never been pigeon-holed.

“In women’s jeans Levi’s is king, and Falmer is doing well. There’s also Marks & Spencer.” But he points out the problems of trying to make Lee appeal to women. “Women are not as loyal to brands as men.”

The jeans market is particularly responsive to advertising. Kelvin Vidler, managing director of Lee Cooper, the only label apart from Falmer to increase share at the end of 1997, attributes its growth to an increased investment in advertising. In the final quarter of 1997, Lee Cooper almost doubled its ad spend and in the 24 weeks to the end of the year, sales grew by 79 per cent compared with the same period in 1996.

Fallon’s advertising campaign will clearly play a crucial role in the turnaround of Lee. But the agency will have to judge the gender issue sensitively, increasing sales to women, without putting off potential male customers.

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