071409 Apparel Top50

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					                                                        COVER STORY

     I t’s fair to say that no company went
       untouched during the past year of
     sweeping changes and economic
     crises. Still, sudden collapse of the
     market in fall 2008 did not impact
     all equally.

     Some, already struggling, were driven
     to declare bankruptcy and in some
     cases completely remove their
     shingles: Mervyn’s, Filene’s Basement,
     S&K Famous Brands and Gottschalks
     are first to come to mind. Yet others
     continued to rack up sales and profits
     despite the collective boom of wallets
     shutting. The Buckle, for example,
     shows no signs of letting up.

     In short, each apparel company on
     the Top 50 list has its own story to tell,
     but common themes will out: Apparel
     companies across the board are               in many highly populated regions          experiencing triple-digit sales
     working diligently to generate strong        of the country have opened up new         increases. This will continue to be a
     cash flow, pay down debt by tightly          possibilities for retailers looking to    focus, along with finding new and
     managing inventory and expenditures          expand.                                   interesting ways to engage the
     and reduce overall company cost                                                        consumer. One observation on this
     structure. Topping the list of priorities    Collectively, retailers are expected to   subject: More companies than ever —
     is a focus on streamlining brands            open 4,000 stores in the United States    and not just the youth-oriented brands
     while improving merchandise                  this year and close 3,600 (according to   — are going social. Even Perry Ellis
     assortments and allocation.                  the CoStar Group), while a heady mix      wants to be on your Facebook page.
                                                  of plans for international expansion
     Apparel companies continue to close          include store openings across Europe,     Starting with True Religion, Apparel’s
     under-performing stores and store            Asia and the Middle East.                 Top 50 report explores some of the
     concepts — just last month,                                                            strategies that landed each on the list.
     Abercrombie & Fitch announced plans          E-commerce has been a virtually
     to shutter its Ruehl stores — while          universal bright spot of growth and
     plunging real estate and store closings      excitement, with many companies

6   JULY 2009   •
  While the economy is taking its toll on the industry,
  it’s clear that when the dust clears, some apparel
     players will emerge stronger than ever before.

#1    True Religion
Topping Apparel’s list for the second year in a row,
this premium denim brand continues to find favor
with its customers, who even in this tough economy
are willing to shell out big bucks for the company’s
distinctive stylings. The average sales prices in the
company’s full-price retail stores in 2008? Those
would be $207 (women’s products) $202 (men’s
products) and $106 (kid’s products), with some of its
best sellers made with the Super Big-T stitch, a dis-
tinctive thread-stitch process patented by the com-
pany in 2007. Other highlights of 2008 are the newly
introduced jean collections “XXX” and “Stealth,”
while “Disco” received a makeover with gold crystals.
True Religion’s Consumer Direct segment generated
net sales of $75.3 million, or 27.9 percent of total net
sales. At the end of 2008 the company operated 42
branded retail stores, and expects to add 25 this year.

Consumers continue to shell out big bucks for True
Religion’s distinctive stylings.

#2   The Buckle                                            #3   lululemon athletica
Growing from 222 stores in 1999 to 387 stores in 39        With a lengthy manifesto that includes statements ranging from
states at the end of 2008, this retailer of casual         the instructive “dance, sing, floss and travel” to the philosophical
apparel, based in … wait for it … Kearney,                 “jealousy works the opposite way you want it to,” this yoga-
Nebraska, has thrived in a retail environment domi-        inspired technical athletic apparel brand has grown in just over
nated by much larger, vertical operations. The             10 years from a single storefront in Vancouver to more than 113
Buckle’s successful formula includes selling a combi-      locations and what might be described as a cult following that
nation of national brands such as Big Star, MEK,           stems from its community-based, grassroots approach to brand
Affliction, Sinful, Lucky Brand Dungarees, Silver,         building, and from its focus on women. (It also sells men’s
Hurley, Billabong, Fossil, Quiksilver/Roxy, Miss Me,       apparel.) Partnerships with local fitness practitioners, or “ambas-
7 Diamonds, OBEY and Ed Hardy, as well as its own          sadors,” in lululemon lingo, drive customers to the retailer,
private label, BKE, which comprised 28 percent of its      (ambassadors get free swag and publicity for their classes), while
sales in 2008. Known for extreme personalized              in-store community boards and classes make each store a truly
attention to its customers, The Buckle educates each       unique place, and a magnet for those seeking a lifestyle of health,
salesperson on product details and how to create a         fun, personal achievement — and $54 tanks. Each retail loca-
complete look for the customer by helping each             tion’s dedicated community coordinator organizes fitness or phil-
individual find the best fit and presenting merchan-       anthropic events in the community, while “educators” are given
dise as coordinating outfits. The company reported         exhaustive training on the technical and design aspects of each
earnings up 44 percent in the first quarter 2009.          product, and are coached to develop a personal connection with
                                                           each “guest.”

                                                                                        • JULY 2009   7
                                                           THE TOP 50

#4   Urban Outfitters                                                    #5   Guess?
With an eclectic mix of apparel, accessories and home items,             Already one of fashion’s most well-known brands, Guess’
the company says its core strategy is to provide unified store           near-ubiquitous presence is poised to expand as the com-
environments that establish emotional bonds with the cus-                pany eyes Europe and Asia as key growth priorities. The
tomer. If its web site is any indicator, that mission has crossed        company opened 168 international stores in all brand con-
to the online environment where the use of social media is in            cepts combined in fiscal 2009 with its international licensees
full play, with blogs touching on everything from art and music          as key strategic partners, and has plans to open approxi-
to tech and film around the globe. Somewhere between the                 mately 126 new stores in fiscal 2010 outside of the United
Frank Lloyd Wright legos and the Sticky Fingers bakery in                States and Canada. The company’s European segment,
Washington, DC is an Urban Outfitters sensibility that cus-              which includes both wholesale and retail operations in
tomers are clearly tapping into. April 2008 saw the company              Europe and the Middle East, generated 34.3 percent of net
add to its Urban Outfitters, Anthropologie and Free People               revenues. Guess credits its global sourcing and product
retail banners with the launch of the first “greenhouse-                 development platform for its strategic role in significantly
inspired” Terrain store, offering lifestyle home and garden              reducing costs and lead times. In e-commerce, the com-
products, antiques, live plants and flowers. The company also            pany’s seven brand web sites are enhancing brand identity —
launched Liefsdottir, a wholesale division for the Anthropolo-           and also racking up sales. Fiscal 2009 saw the combined sites
gie brand that is also sold through luxury department stores             continue to grow, generating net sales in excess of the top
including Nordstrom and Neiman Marcus.                                   retail GUESS? store in the chain.

#6   Nike                                                                                               The Nike Free shoe offers a
The company continues to just do it, driving competitors to seek out                                    barefoot experience coupled with
product niches to avoid head-on competition with this athletic-wear                                     the protection and traction of a
                                                                                                        lightweight performance shoe.
behemoth. As the largest company on the Top 50 with sales approach-                                     Inset: Nike Shox offer impact
ing $19 billion, Nike continues to grow and innovate. 2008 saw the                                      protection.
100-year anniversary and best year ever of the Converse brand,
and record growth for the Hurley and Cole Haan brands and the
Nike GOLF portfolio. The company sold its Starter and Bauer
businesses, and acquired Umbro. Ever serious about its role as a corpo-
rate citizen, Nike launched The Human Race, the world’s biggest single
running event in history, raising funds along the way, and expanded
the recent debut of Considered Design, products that combine sustain-
able principles with innovations in sport, to include all six of the com-
pany’s key categories: running, basketball, soccer, men’s training,
women’s training and sportswear.

#7   Gymboree                                                       #8   bebe Stores
Fiscal 2008 marks a milestone event in the company’s 30+            While profits have started to mimic its apparel fit models
year history, with revenues reaching the $1 billion plateau.        (extremely slim) since bebe’s fiscal year end in July 2008 (profit
Acknowledging challenging times ahead, CEO Matthew                  margins for the nine months and three months ending in April
McCauley says Gymboree is well positioned for long-term             2009 were 2.7% and -4.0%, respectively), the company’s commit-
growth with a cash balance of $140 million and no long-             ment to updating its technology infrastructure should position it
term debt. Churning out season after season of truly                well for future growth. Last year saw the culmination of a three-
adorable kids’ clothes doesn’t hurt either. The company             year information systems and technology strategic plan with the
has also planned carefully, opting for pay cuts for corpo-          implementation of a product lifecycle management system to its
rate and distribution center personnel and the elimination          supply chain, fully integrated with its production system. Previous
of the cash bonus program for senior management over                investments focused on infrastructure upgrades, a new production
layoffs. Capitalizing on the soft real estate market, the           management system, upgraded planning and allocation systems
company plans to expand with 75 stores, focusing heavily            and the new clubbebe loyalty program.
on its new lower-priced concept, Crazy 8.

8    JULY 2009   •
                THE TOP                                           A ranking of U.S. publicly traded apparel companies with at least $100M+
                                                                  in annual sales by profit margins for their most recent fiscal years.

                                                                               SALES                                      NET INCOME                              %            %
                                                                                                                                                       %         Profit      Profit
       Last                                                            Most                             %            Most                           Change      Margin,     Margin,
 2009 Year’s                                                          Recent           Previous       Change        Recent          Previous          Net        Most       Previous
 RANK Rank Company                                          FY          FY                FY           Sales          FY               FY           Income     Recent FY       FY
   1       1     True Religion                            Dec.          $270.0           $173.3        55.80          $44.4            27.80          59.71      16.44       16.04
   2      New    The Buckle                               Jan.          $792.0           $619.9        27.76         $104.4            $75.2          38.83      13.18       12.13
   3       5     lululemon athletica                      Feb.         $353.5            $269.9        30.97          $39.4            $30.8          27.92      11.15       11.41
   4       8     Urban Outfitters                         Jan.       $1,834.6          $1,507.7        21.68         $199.4           $160.2          24.47      10.87       10.63
   5        6    Guess?                                   Dec.       $2,093.4         $1,750.0         19.62         $213.6          $186.5           14.53      10.20       10.66
   6       10    Nike                                     May       $18,627.0        $16,325.9         14.09       $1,883.4        $1,491.5           26.28      10.11        9.14
   7       12    Gymboree                                 Jan.       $1,000.7           $920.8          8.68          $93.5           $80.3           16.44       9.34        8.72
   8       4     bebe Stores                               July         $687.6           $671.0         2.47           $63.1           $77.3        (18.37)       9.18       11.52
  9        11    Cintas Corp.                              May       $3,937.9          $3,706.9         6.23         $335.4           $334.5           0.27       8.52         9.02
  10       15    Jos. A. Bank Clothiers                    Jan.        $695.9            $604.0        15.22          $58.4            $50.2          16.33       8.39         8.31
  11       14    Polo Ralph Lauren                        Mar.       $5,018.9          $4,880.1         2.84         $406.0           $419.8         (3.29)       8.09         8.60
  12     Back Delia’s                                      Jan.        $215.6            $201.6         6.94          $17.2            ($2.3)       847.83        7.98       (1.14)
  13      17 Aeropostale                                   Jan.      $1,885.5          $1,590.9        18.52         $149.4           $129.2         15.63        7.92         8.12
  14       16    VF                                       Jan.       $7,642.6         $7,219.4          5.86         $602.8           $591.6           1.89       7.89        8.19
  15        3    Abercrombie & Fitch                      Jan.       $3,540.3         $3,749.9        (5.59)         $272.3           $475.7        (42.76)       7.69       12.69
  16        7    Columbia Sportswear                      Dec.       $1,317.8         $1,356.0        (2.82)          $95.1           $144.5        (34.19)       7.22       10.66
  17       26    Gap                                      Jan.      $14,526.0        $15,763.0        (7.85)         $967.0           $833.0          16.09       6.66        5.28
  18      New    Volcom                                   Dec.         $334.3           $268.6        24.46           $21.7            $33.3        (34.83)       6.49       12.40
  19        2    American Eagle Outfitters                Jan.       $2,988.9          $3,055.4       (2.18)         $179.1          $400.0         (55.23)       5.99       13.09
  20       18    Maidenform Brands                        Jan.         $413.5            $422.2       (2.06)          $24.7            $34.2        (27.78)       5.97         8.10
  21       29    UniFirst                                 Aug.       $1,023.2            $902.1       13.42           $61.0            $45.2          34.96       5.96         5.01
  22       13    Under Armour                             Dec.         $725.2            $606.6       19.55           $38.2            $52.6        (27.38)       5.27         8.67
  23        9    Levi Strauss                             Nov.       $4,400.9          $4,360.9         0.92         $229.3          $460.4         (50.20)       5.21       10.56
  24       22    Dressbarn                                July       $1,444.2          $1,426.6         1.23          $74.1          $101.2         (26.78)       5.13         7.09
  25       37    Wet Seal                                 Jan.         $593.0            $611.2       (2.98)          $30.2            $23.2          30.17       5.09         3.80
  26       33    The Children’s Place                     Jan.       $1,630.3          $1,520.3         7.24          $82.4          ($59.6)        238.26        5.05       (3.92)
  27     Back    Carter’s                                  Jan.      $1,490.0          $1,412.3         5.50          $75.1          ($70.6)         206.37       5.04       (5.00)
  28      19     Nordstrom                                 Jan.      $8,272.0          $8,828.0       (6.30)         $401.0          $715.0         (43.92)       4.85         8.10
  29      25     Zumiez                                    Jan.        $408.7            $381.4         7.16          $17.2            $25.3        (32.02)       4.21         6.63
  30      36     Cato                                      Jan.        $857.7            $846.4         1.34          $33.6            $32.3           4.02       3.92         3.82
  31      50     J. Crew                                   Jan.      $1,428.0          $1,334.7         6.99          $54.1            $97.1        (44.28)       3.79         7.28
  32       21    Phillips-Van Heusen                      Feb.       $2,491.9          $2,425.2         2.75          $91.8           $183.3        (49.92)       3.68         7.56
  33       41    Citi Trends                              Jan.         $488.2            $437.5        11.59          $17.4            $14.2          22.54       3.56         3.25
  34       44    Timberland                               Dec.       $1,364.6          $1,436.5       (5.01)          $42.9            $40.0           7.25       3.14         2.78
  35       43    Hanesbrands                              Jan.       $4,248.8          $4,474.5       (5.04)         $127.2           $126.1           0.87       2.99         2.82
  36       24    Men’s Wearhouse                           Jan.      $1,972.4          $2,112.6       (6.64)           $58.8          $147.0        (60.00)       2.98         6.96
  37       45    Hot Topic                                 Jan.         $761.1           $728.1         4.53           $19.7           $16.0          23.13       2.59         2.20
  38      New    American Apparel                         Dec.         $545.1           $387.0         40.85          $14.1            15.50         (9.03)       2.59         4.01
  39       23    Limited Brands                           Jan.       $9,043.0        $10,134.0       (10.77)         $220.0           $718.0        (69.36)       2.43         7.09
  40       34    The Warnaco Group                        Dec.       $2,065.0          $1,819.6        13.49           $47.3           $79.1        (40.20)       2.29         4.35
  41       30    Charlotte Russe                          Sept.        $823.3            $740.9        11.12           $18.2           $36.3        (49.86)       2.21         4.90
  42       46    Superior Uniform Group                   Dec.         $123.8            $120.5         2.74            $2.1            $2.5        (16.00)       1.70         2.07
  43     Back Hampshire Group                             Dec.          $240.9           $257.0       (6.26)            $0.0             $0.0          0.00       0.00         0.00
  44      47 Delta Apparel                                June          $322.0           $312.4         3.07          ($0.5)             $6.3      (107.94)     (0.16)         2.02
  45     Back Destination Maternity                       Sept.         $564.6           $581.4       (2.89)          ($1.4)           ($0.4)      (250.00)     (0.25)       (0.07)
  46      28     Chico’s FAS                               Jan.      $1,582.4          $1,714.3       (7.69)         ($19.1)           $88.9       (121.48)     (1.21)         5.19
  47      40     Perry Ellis International                 Jan.        $851.3            $863.9       (1.46)         ($12.9)           $28.2       (145.74)     (1.52)         3.26
  48      27     Tween Brands                              Jan.        $995.1          $1,014.0       (1.86)         ($17.2)           $52.6       (132.70)     (1.73)         5.19
  49     Back    New York & Company                        Jan.      $1,139.9          $1,194.9       (4.60)         ($19.8)           ($4.9)      (304.08)     (1.74)       (0.41)
  50       38    G-III Apparel Group                       Jan.         $711.1           $518.9        37.04         ($14.0)           $17.5       (180.00)     (1.97)         3.37

*NOTES: New = The company is appearing in the Apparel Top 50 for the first time. Back = The company has been ranked in the Apparel Top 50 in previous years but was not ranked last
year because of its performance, because it was not publicly traded, etc. Dollar amounts are in millions of U.S. dollars. Levi Strauss & Co. is a privately held company that releases
financial data publicly. Apparel does not include department stores in its Top 50 rankings. Nordstrom files with the SEC under “Retail - Family Clothing Stores” (SIC code 5651).
                                                           THE TOP 50

                                                           #9      Cintas
                                                           You probably know this company as the largest provider of corporate uni-
                                                           forms, but did you know it also offers business solutions ranging from jan-
                                                           itorial services to fire protection equipment? Reporting its 39th
                                                           consecutive year of growth in sales and profits, the company expanded
                                                           into international markets with the acquisition of an information manage-
                                                           ment company in the Netherlands and the launch of fashion uniform sales
                                                           and service offices in Hong Kong and Macau. The ownership-driven com-
                                                           pany — most company executives have the majority of their net worths
                                                           invested in Cintas stock — saw Cintas purchase another 5.2 million shares
                                                           in the company.

                                                          Cintas uniforms go to work with more than five million people every day.

#10    Jos. A. Bank Clothiers Inc.                                                #11    Polo Ralph Lauren
Offering “Three Levels of Luxury,” one level of quality — and one level           The World of Ralph Lauren expands with last year’s
of focus on its business (intense), this men’s tailored and casual clothing       opening of its second Paris store and largest
retailer, with 441 stores in 42 states, plans to open 10 to 15 stores this        women’s store in the world, on the famous Avenue
year, while economic conditions have put under evaluation plans to                Montaigne, and an 11,000-square-foot spot on Los
grow the chain to 600 stores by 2012. Meanwhile, customers are show-              Angeles’ hot shopping street Robertson Boulevard.
ing confidence in purchasing traditional business attire online: suits rep-       In March, the company will debut a newly con-
resented approximately 25 percent of orders in its Direct Marketing               structed 30,000-square-foot store in New York City
segment (includes catalog), which accounted for approximately 9 per-              across from its flagship Rhinelander Mansion loca-
cent of net sales in fiscal 2008. Strong growth in online sales over the          tion, dedicated to women’s wear and home prod-
past five fiscal years (more modest in 2008) are helped by its 3,800 active       ucts. Its largest and fast-growing “store,”
affiliate arrangements, and likely by its online style tips — did you know, averaged 2.9 million unique visi-
that a cummerbund is always worn with folds pointing up, and that                 tors monthly and acquired approximately 350,000
socks should always match the trouser, not the shoe? Extreme focus on             new customers, resulting in 1.7 million total cus-
creating a customer-friendly site continues this year with plans to               tomers in fiscal 2009, while August 2008 saw the
replace the existing Internet infrastructure to meet increasing capacity          launch of, the company’s second
needs and enhance the shopping experience.                                        e-commerce web site.

#12    dELiA*s                                                         #13    Aeropostale
The direct marketer and retailer derives                               Once a Macy’s private label, this 25+-year-old brand targeting
sales from a mix of national brands and its                            teens ages 14-17 now operates 903 stores and continues to
two proprietary brands, dELiA*s and Alloy,                             buck economic trends, continuing 11 consecutive years of
targeted to girls ages 12 to 19, a demo-                               same-store sales growth with an impressive 8 percent increase
graphic representing approximately                                     in 2008. CEO Julian Geiger attributes the company’s success in
33 million and reportedly among the                                    part to adhering to its strategic goal of — tell me if you’ve
fastest growing in the United States. It’s                             heard this one before — listening to the customer. Easier said
also one that dELiA*s knows a lot about.                               than done, but Aeropostale walks the talk, taking direction
Its strategy is continually developed and                              from focus groups, surveys and consumer feedback. It credits
refined based on its comprehensive                                     its unique promotional specialty store model, which enables
teenager databases, approximately 10.9                                 the company to spur demand on an item and classification
million people strong, with information                                basis, with helping create a dynamic and exciting shopping
on age, purchasing history, stated inter-   With a database            experience. Although shuttering its 11-store Jimmy’Z chain,
ests, online behavior, educational level    10.9 million strong,       last month the company launched its new “P.S. from Aéro-
and socioeconomic factors.                  dELiA*s knows its          postale” concept for elementary school kids ages seven to 12.
                                            teenage customers.

10   JULY 2009   •
                          THE TOP 50

#14    VF
Ending 2008 well poised to face a
tough economy with $382 million
in cash, $1.3 billion of borrowing
capacity and a huge portfolio of
well-established brands, VF will
continue to focus on its strongest
retail concepts, with a stated goal of
generating 22 percent of its sales
from its retail and e-commerce           A Nautica jacket, pictured
businesses by 2012. The company          here, represents just one
opened 89 retail stores in 2008 for a of the company’s huge
                                         portfolio of brands.
total of 698; plans call for opening
70 more this year. Online, new web sites were launched for its
The North Face®, Nautica® and Kipling® brands, likely con-
tributing to the increase in direct-to-consumer revenues of 15
percent, accounting for 16 percent of total revenues, up from 14
percent the previous year. Plans to acquire the remaining shares
of women’s sportswear brands Splendid® and Ella Moss® will
strengthen its newest coalition, Contemporary Brands.

#15    Abercrombie & Fitch
Despite its high positioning on the Top 50, sales, income and
profits are significantly down from the previous year, and the
retailer, usually in the press for its sexually charged marketing,
has more recently been faulted for its refusal to discount mer-
chandise during the ’08 holiday season; that sent customers
flocking to the competition, which was slashing prices faster
than you can say: “I’m not buying anything unless it’s at least
70 percent off.” Since then, the company has offered and
deepened promotions, but still hasn’t regained its stride.

#16    Columbia Sportswear
Columbia products are sold in more than 100 countries, and
this month the 72-year-old outdoor apparel company will
make them available at yet another location: its own web site.
(See p. 21 for more details.) This move
complements its retail expansion strat-
egy, which calls for building on its
base of outlet stores as well as
opening several new first-line
retail stores in key metropolitan
markets, the next one expected
to open in September in the
heart of London’s vibrant
retail district on Kensington
High Street.
This month, Columbia Sportwear
will finally make its merchandise
available for sale on its web site.

                                                             • JULY 2009   11
                                                               THE TOP 50

                              #17    Gap                                                    #18    Volcom
                              Hitting the billion dollar mark in annual online sales        What started as two guys on a snowboard-
                              for the first time was just one of a recent string of         ing trip in 1991 is now a leading global
                              “firsts” for the company, which also includes the             brand in the boardsport apparel industry.
                              recent launch of Banana Republic Edition, an acces-           With a motto of “youth against establish-
                              sories-only store, opening of its first two outlet stores     ment,” the brand is inspired by, and steeped
                              in Canada, and plans to open its first Gap store in           in, the energy of youth culture: the company
                              Israel this fall, to be followed by a Banana Republic         also produces and sells music under its Vol-
                              nameplate in the spring. While the latter moves are           com Entertainment label, and boardsports-
                              part of an overall strategy to expand into interna-           influenced films through its film division,
                              tional markets, CEO Glenn Murphy, in announcing               Veeco Productions. In 2008, the company
                              plans to remodel 50 Old Navy stores this year, says           acquired action sports lifestyle brand Electric
                              gaining market share at home is also a top priority.          Visual Evolution.

                              Gap is eyeing international markets while
                              keeping a strong focus on its U.S. business.

#19    American Eagle Outfitters                                               #20        Maidenform Brands
With net income and profits down by more than half over the pre-               It’s no wonder the company’s share of the intimates
vious year, the company’s spot on the Top 50 belies its recent fall-           apparel market grew to 9.4 percent. Just a few contribut-
off in business, but in a quarterly report released in May, CEO Jim            ing factors: In 2008 Maidenform increased its mass-mer-
O’Donnell reported early indications of stabilization, noting                  chant presence 12.6 percent over 2007, while its sales
                        improvements in the AE brand, particularly             were up 28 percent in the exploding shapewear category.
                              in denim and other key fashion cate-             It also experienced continued growth in full-figure bras (a
                                 gories such as dresses and acces-             category the NPD Group reports now represents approxi-
                                   sories. He also emphasized the              mately 35 percent of the overall bra market). More excite-
                                     company’s goals of improving              ment on the way: the company this year signed a new
                                     assortments across AE cate-               licensing agreement with Donna Karan and also intro-
                                     gories and strengthening mer-             duces its new Total Solution, featuring patent-pending
                               chandise margin. Meanwhile,                     SMARTZONE™ cup technology. On the IT side, an all-
                            American Eagle announced plans to                  new platform for its e-commerce web site is slated to go
                            expand into the Middle East.                       live by early 2010, while a project to replace its demand
                                                                               planning and inventory forecasting systems is part of an
                                                                               overall business process improvement initiative expected
                            American Eagle has announced plans                 to yield significant financial and operational benefits.
                            to expand into the Middle East.

#21    Unifirst
Although it has diversified in recent years — did you know the company operates
14 nuclear decontamination facilities? — uniform rental remains at the heart of the
company, which for the first time beat the $1 billion mark. Chairman and CEO
Ronald Croatti says the company is committed to continued growth even in the face
of an extremely challenging economy, moving forward aggressively with special
programs designed to address business uncertainties and to target industries that
are least likely to experience severe job losses. “We’re not deluding ourselves into
thinking that the government’s rescue plan is going to make things right,” says
Croatti. Amen to that.
The company serves more than 225,000 customer companies throughout the
United States and Canada from more than 200 UniFirst locations.

12   JULY 2009   •
                                                              THE TOP 50

#22    Under Armour                                                 #23    Levi Strauss
Billing itself as The Athletic Brand of This Generation, the        Overall a good year for the company,
company that made its name in compression wear contin-              2008 saw the launch of the company’s
ues to expand its house, adding to its footwear business            first global marketing campaign, “Live
with the launch of its Performance Training Footwear and            Unbuttoned,” the creation of a global
Running Footwear. The company brought down high                     product development center at its manu-
inventory levels from a year-over-year increase of 105 per-         facturing facility in Turkey and the estab-
cent at the end of 2007, to one of just                             lishment of a joint venture in Russia.
10 percent at the end of 2008,                                      While the Signature® brand finished the
and continues to focus on                                           year strong, sales of its Dockers® brand
improving efficiency in this                                        were disappointing. A new ERP system
area. (See next month’s supply                                      was successfully rolled out in Asia, but
chain feature to learn more                                         the U.S. implementation was not so
about Under Armour’s recent                                         smooth, resulting in a brief system shut-
WMS implementation.)                                                down that disrupted shipments and had
                                                                    a substantial impact on second-quarter           In 2008 Levi launched
Known for its compression                                           results in the Americas.                         its first global
wear, the company continues                                                                                          marketing campaign,
to expand its business.                                                                                              “Live Unbottoned.”

#24    The Dress Barn                                               #25    The Wet Seal
                          This month marks a year since the         As part of its strategy to reverse eight consecutive quarters of
                          company’s fiscal year end reported        same-store sales declines, including first quarter fiscal ’09 comp-
                          in this issue, but recent third-quar-     store sales down 7.3 percent, the company has identified oppor-
                          ter results for dressbarn show            tunities to improve inventory
                          comp-store sales up 3 percent,            management and merchandise
                          which president and CEO David             mix, particularly among basic and
                          Jaffe attributes to a mix of spring       fashion tops, dresses and acces-
                          merchandise that resounded posi-          sories. In service of this goal, the
                          tively with the consumer. The             company is implementing mark-
                          company continues to upgrade its          down and size optimization sys-
                          information systems: dressbarn            tems as well as a retail
IT remains a strong focus
for The Dress Barn.       adopted a variant of the merchan-         merchandising system slated
                          dising system used at its maurices        for completion in 2010.
stores; and the company is also implementing a new POS
system and upgrading its CRM system.                                The Wet Seal expects new IT
                                                                    systems to help turn around a
Editor’s Note: At press time dress barn and Tween Brands            string of consecutive same-store
(#48) had announced plans to merge.                                 sales declines.

#26    The Children’s Place                                         #27    Carter’s
Its value-priced, fashionable merchandise continues to              The maker of the venerable Carter’s and OshKosh brands held
appeal to moms and kids, in its 917 stores and online, where        strong, with the company achieving record sales, and earnings
e-commerce net sales have grown aggregately more than               per share comparable to the previous year, despite incurring
200 percent over the past three years, with sales of $88.9          costs related to events such as the bankruptcies of several large
million in fiscal 2008. The company is committed to the             customers, complying with new safety standards for children’s
growth of this channel, and uses third-party resources to           products and correcting inventory levels in its own retail stores.
fully manage the hosting of its web site, with all other fulfill-   Favorable factors including the less discretionary nature of chil-
ment services provided in house. The Children’s Place               dren’s wear and a rising U.S. birth rate should allow the com-
exited its Disney Store business in 2008.                           pany to continue to build on its 14.1 percent share of the $24
                                                                    billion baby and young children’s apparel market.

                                                                                              • JULY 2009   13
                                                              THE TOP 50

#28    Nordstrom                                                       #29     Zumiez
A softening in fall 2007 top-line sales, resulting in excess           There’s never been a better time to be a 12-to-24-year-old young
inventories, led the company to take steps to align inven-             guy (or gal!). Design your own skateboard online, or make plans
tory and expenses with projected sales, positioning Nord-              to join the Zumiez Couch Tour of live music performances and
strom to better respond to the subsequent sharp drop in                pro skate demos. In the mall? Feel free to hang out on the
the economy. Still, 2008 was a challenging year for the                Zumiez couch and play video games. Got a question? Ask the
retailer; moving forward, customer service remains the cor-            staff — they’re not just associates, they’re also product users.
nerstone of a four-point strategy rounded out with plans               You’ll find national and private-label brands, the latter repre-
for continued inventory adjustments; deepening customer                senting approximately 15 percent of net sales in 2008; meanwhile
relationships through the multi-channel shopping experi-               the retailer is working with its vendors to get more low-priced
ence and Nordstrom Fashion Rewards® program; and                       merchandise into stores for back-to-school shopping. The world
effective business management.                                         is your skatepark, dude.

                       #30    The Cato Corp.                                         #31    J. Crew
                       Its market research reveals that low prices and fash-         The company hit the jackpot earlier this year
                       ion are the two biggest reasons customers shop at             when the entire First Family showed up to inau-
                       Cato — and there can’t be much doubt that the                 guration festivities clad in J. Crew. You just can’t
                       value-oriented combination served the retailer espe-          pay for advertising like that. Continued upgrades
                       cially well in the current economy. Cato performed            to IS in 2008 included the implementation of a
                       solidly, ending the year with $140 million in cash            new platform for its web site, a new order man-
                       and investments, and no debt. The company’s new               agement system in its call center and a new ware-
                       It’s Fashion Metro concept gained momentum, with              house management system. While causing some
                       32 stores opened at the end of 2008 and plans to add          disruptions to business during the second, third
                       40 this year.                                                 and fourth quarters, these upgrades should go a
                                                                                     long way toward improving the company’s ability
                       Customers shop at Cato for its low prices and fashion
                       — a perfect fit in an economy characterized by                to efficiently take and fulfill orders from fans
                       shrinking wallets.                                            seeking to strut Obama-style.

#32    Phillips-Van Heusen
Tackling the tough economy head on, the owner of the Calvin Klein, Izod and Van Heusen clothing brands earlier this year
announced plans to close 175 stores, lay off 400 employees, stop domestic production of machine-made neckwear, reduce its ware-
house capacity and cut travel, marketing and administrative expenses, and realign its global sourcing organizational structure —
moves which the company expects to save about $40 million annually, before taxes.

#33    Citi Trends                                         #34    Timberland
Addressing problems of ineffective manage-                 All part of its mission to strengthen its
ment of inventories and store payroll, and high            connection with consumers, Timber-
store inventory shrinkage, the company deliv-              land executed an integrated, global,
ered strong year-over-year results in all key              brand-building campaign that
metrics and recently topped it off with record             included high-emotion TV ads and
first-quarter 2009 results including sales up 18.3         interactive, viral web communications,
percent, comp-store sales up 7.4 percent and               launched its Earthkeeper program, a
net income up 52 percent. Preparing for growth,            movement to recruit 1 million people Timberland is on a mission to strengthen
                                                                                                     its connection with consumers.
the company expanded its South Carolina dis-               into an online network designed
tribution center and is also implementing a new            to inspire real environmental behavior change, and opened nearly 100
warehouse management system, while on the                  branded retail doors and shop-in-shops in China. Its Earthkeepers collection,
store side, Citi Trends plans to increase its sell-        made with organic and recycled materials, hit its mark with consumers, selling
ing square footage by 15 percent this year.                well. The company ended the year with zero debt and $217 million in cash.

14   JULY 2009   •
                                                              THE TOP 50

#35    Hanesbrands                                                      #36   Men’s Wearhouse
People go back to the basics in a recession, and that’s good            Once again named to Fortune magazine’s 100 Best Companies to
news for Hanesbrands. “People are still wearing under-                  Work For list, the company saw a new “buy one get one free”
wear, socks, bras, t-shirts and activewear as often as before           promotion, the integration of 500 After Hours tuxedo rental
and will need to replenish,” says chairman and CEO                      stores into its business, new leadership at its K&G deep-discount
Richard Noll. The company also generated sales with new                 stores, and reductions in executive compensation and other
introductions including Hanes No Ride Up panties and                    expenses, all of which chairman and CEO George Zimmer says
boxer briefs for “wedgie-free” comfort. If that’s not non-              will contribute to the company’s ability to navigate through the
discretionary spending, I don’t know what is.                           economic downturn. But can he guarantee it?

#37    Hot Topic                                                       #38    American Apparel
The purveyor of music- and pop                                         It was a nail-biter to the end but in March the cash-poor retailer of
culture-influenced apparel and                                         snug-fitting t-shirts managed to keep from defaulting on $16 mil-
accessories in 2008 launched                                           lion in debt by selling an 18 percent stake in the company to Lion
ShockHound, an e-space music                                           Capital, a private equity firm that once owned Jimmy Choo, for
discovery concept, offering online                                     $80 million. American Apparel, known for its sexually charged
music downloads, a music mer-                                          advertising and socially responsible manufacturing, also made
chandise retail store, exclusive edi-                                  headlines this year when film actor-director Woody Allen sued
torial and video content and social                                    the company for using his image in its advertising without his per-
networking. The company oper-                                          mission. The parties settled for $5 million.
ates 681 Hot Topic stores and, for
the plus-size young women’s mar-                                       American Apparel stayed alive after receiving an $80 million infusion
                                                                       from private equity firm Lion Capital. Pictured here: its tri-blend
ket, 159 Torrid stores.                                                short-sleeve track shirt.

#39    Limited Brands                                                          #40    The Warnaco Group
“We’re in the right businesses,” says chairman and CEO Leslie                  The company hit a major milestone, surpassing $2 billion
Wexner. Since divesting its Express and Limited Brands in 2007                 in revenues, with the Calvin Klein brand the cornerstone
the company has focused on its core beauty and lingerie concepts               of Warnaco’s growth strategy, increasing 21 percent to
that Wexner says “combine the best of ‘I need it’ and ‘I want it.’”            $1.5 billion in 2008, with Calvin Klein Underwear the
The successful expansion of Bath & Body Works into Canada —                    most profitable division. The company also struck gold as
stores are selling two-and-a-half times the volume of U.S. stores              Michael Phelps took eight Olympic medals in the com-
— has spurred plans for more this year, including Canada’s first               pany’s Speedo LZR.
PINK store, to be followed in 2010 by Victoria’s Secret.

#41    Charlotte Russe                                                         #42    Superior Uniform Group
Faced with slipping sales in a crumbling economy, the women’s                  Although rising unemployment has led to shrinking
apparel retailer announced in March that it would initiate the                 demand for uniforms, CEO Michael Benstock sees oppor-
                            process for selling the company. It                tunities in other areas, from working out better deals with
                            rejected an offer in November from                 vendors to looking for acquisitions. Last year, recognizing
                            KarpReilly Capital Partners for approx-            the need for companies to outsource non-core competen-
                            imately $198.6 million. Meanwhile, the             cies, the company branched out from apparel when it
                            company shows some hopeful signs of                turned its in-house call center in El Salvador into a sepa-
                            progress as it focuses on reversing                rate business. Dubbed The Office Gurus, it now services
                            operating troubles. It operates almost             not only Superior Uniform but also other U.S. firms.
                            500 stores in 45 states.

                             Charlotte Russe continues to focus on
                             improving operations as it looks for a buyer.

                                                                                               • JULY 2009     15
                                                              THE TOP 50

#43    Hampshire Group Ltd.
A February offer by NAF Acquisition Group to acquire the men’s and women’s apparel manufacturer for $30 million fell
through in April. In the same month, Michael Culang resigned from his position as president, CEO and director — just 11
months after having officially taken the helm of the company.

                  #44   Delta Apparel                                                #45      Destination Maternity
                  The designer and manufacturer of branded and private-              Any confusion about its product offerings has most
                  label activewear has seen its fortunes rise since its June         certainly been cleared up by the corporate name
                  fiscal-year end, with net sales for the nine months                                      change from Mothers Work,
                  ended March 2009 up 15.6 percent, and a net income                                       part of a major rebranding
                  of $2.4 million vs. a net loss of $4.8 million. Recent                                   strategy that also streamlined
                  business developments include the purchase of head-                                      its store nameplates. The com-
                  wear supplier Gekko Brands LLC by its wholly owned                                       pany will expand into the Mid-
                  subsidiary, To The Game LLC, and the launch of pro-                                      dle East this year through a
                  duction at Ceiba Textiles, a state-of-the-art textile man-                               franchise arrangement.
                  ufacturing facility in Honduras.
                                                                                                          Its name change from Mothers
                    This year Delta Apparel expanded its footprint with the                               Work to Destination Maternity is
                    purchase of headwear supplier Gekko Brands by To The                                  part of a major rebranding
                    Game, a wholly owned subsidiary of the company.                                       strategy.

#46    Chico’s FAS                                                     #47     Perry Ellis International
Hopping on the inauguration merchandise craze, the                     While sales and net income are once again down for the first
women’s fashion retailer launched a $24 “Hope and                      quarter of fiscal 2010, strong performers among Perry Ellis’
Change” necklace in its 13 DC-area boutiques in January.               diverse portfolio of brands included its golf brands at department
If that doesn’t work, there’s promise in recent efforts to             and mid-tier stores (revenues up by $9.6 million) and Jantzen®
improve sales and better manage inventories with the                   and Nike® swim wear (revenues up by $3.2 million). The company
implementation of a new assortment planning and alloca-                saw door expansion of its Hispanic lifestyle brands, particularly
tion system, and plans to expand its distribution center               Centro at Kohl’s and Cubavera® at the department-store channel.
facilities in Georgia.

#48    Tween Brands                                                                 #49       New York & Company
The company has made significant progress in converting all Limited                 Despite a loss of $3.2 million and comp-store sales
Too stores to its more value-oriented Justice brand, with 867 of 910                down 8.6 percent, the women’s specialty apparel
stores now displaying the Justice nameplate, but the transition process             retailer sees bright spots in the near doubling of its
— oh, and the economy — may have hurt business, as the “tween”                      e-commerce sales to $41 million, strong performance
specialty retailer reported a first-quarter fiscal 2009 loss of $1.4 mil-           in its accessory and wear-to-work categories and con-
lion. Tighter controls on inventories and operating expenses may help               tinued store expansion.
turn that around.

#50    G-III Apparel
The company traditionally known for outerwear has been diversifying into other areas including dresses and women’s
sportswear and plans to expand these categories particularly through its strong relationships with Calvin Klein and
Phillips Van-Heusen, as well as with Andrew Marc, one of two recent acquisitions by the company. The other was the
Wilson’s retail outlet business, which fell short of expectations in fiscal 2009.

Jordan K. Speer is editor in chief of Apparel. She can be reached at

16   JULY 2009   •

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