The Iconix Way
By Warren Shoulberg
Neil Cole loves brands. He loves them so much he bets his business on them.
That business is Iconix, the branding company that changed the rules in apparel first, then soft home and is now set to do the same thing in the rest of the home furnishings market.
"Obviously we believe in brands," Cole told HFN recently at the company's midtown Manhattan offices. "As a consumer, I only buy brands. I can't imagine going in and just buying something I don't know about."
Started some two decades ago, the company that was to become Iconix Brand Group was created to manage one apparel fashion brand, Candies, but has grown into a stable of more than two dozen brands from Peanuts to Madonna's new Material Girl launch at Macy's.
Along the way it expanded into home, acquiring the benchmark brands that were once the foundation of the old Fieldcrest Cannon empire, including Royal Velvet and Charisma. Later it picked up another fabled soft-home nameplate, Waverly.
Cole said Iconix is now ready for what's next. "We believe there are huge opportunities beyond soft home with the brands we have. We're working on taking our brands into tabletop and furniture," and beyond.
"Over the next 12 months, we see a lot of deals happening with our brands."
But that's not all. Cole, who was educated as an attorney but has spent the bulk of his career in retailing and brand management, sees Iconix not only acquiring additional home brands over the next year but also taking its home brands into non-home classifications like apparel. "Our brands are lifestyle brands."
Not that home and apparel are entirely similar when it comes to brands. "It's true that brands are not as critical in home as they are in apparel and fragrances. A lot of fashion is showing people what you have.
"But a sheet or towel is not something that is seen by friends ... unless you get lucky."
That said, Cole insists, "But if you have a choice of buying a Cannon towel or a nothing towel, you'll buy the Cannon."
And not that all brands are created equally. "There's only so many slots out there and the marginal brands that don't matter are going away. We've been able to bring brands to the masses at affordable prices."
It's one of the reasons he doesn't buy into the theory that the consumer will walk away from brands when the economy is bad. "We haven't seen it," Cole said.
A lot of Iconix business is going toward proprietary brands for specific retailers, like Fieldcrest at Target and the new Madonna program for Macy's. Cole calls them "direct-to-retail brands" and there are now 19 such programs. He thinks it's a format that will continue to grow and he calls them "the best of both worlds."
Whichever world you're in--retail or wholesale--Cole believes the fourth quarter of this year is going to be tough. "It's going to be a better fourth quarter than a year ago, but not by much. I'm looking for low single digit increases.
"It's going to be a long, slow recovery and it's going to take three to five years to get back to where we were."
When that happens, Cole believes Iconix will be the right company at the right time to benefit from it. In announcing record second-quarter results earlier this summer, Cole said, "We believe the advantages of our business model and strength of our brands are evident."
Brands run in the Cole family: When he was honored by the Fashion Institute of Technology last year, it was his brother, designer Kenneth Cole, who did the presenting honors.
As we said, Neil Cole loves brands.