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I noticed a trend from some of the clothing lines on the Clothing Company One Hit Wonders list. Enyce, Mecca, Drunknmunky, Phat Farm, and even the mighty Tommy Hilfiger are all clothing lines that sold out and were acquired by a larger company. They also lost a great deal of their market share after expanding their product line and distribution.

All these companies at one time had a strong hold in the market place (some stronger than others). Most of them were ran by owners that had an understanding of the lifestyles that their target customer had, because at one time most of them lived it. Once they were bought out by investors or by companies that just acquire companies and add them to their portfolio (Increasing their share of each apparel market). (Kellwood,Tarrant Apparel Group) If you can remember Kellwood bought out ($140 million with performance incentives) Phat Fashions which includes the Baby Phat clothing brand and Phat Farm. Both headed by Russell Simmons and Kimora Lee Simmons. Liz Claiborne acquired Enyce in February 2004 for $114 million in a cash transaction.

If you look at where these companies were before they sold out, the acquisitions seemed to have a negative affect on their clothing lines overall position in the marketplace. For the owners of Enyce this was the second time they made that move and for them it was a great move. They were the original founders of Mecca Clothing Company, which they sold to International News for $40 million and two years later started Enyce. So they made the money from their business and cashed out just in time…to some it’s not all about the money, but protecting the integrity of your business.

All these companies above enjoyed success and a strong hold on their market Tommy Hilfiger sports wear, Drunknmunky street wear, Enyce, Mecca, and Phat Farm were all hip hop urban clothing brands. Even though some were already going downhill (Tommy Hilfiger) they all steadily declined after they lost control over their companies distribution, creativity, vision and became just another way for an investor to make more money. Even though some of the original owners had some say so over the brand after the acquisition it seems to be a pattern amongst them losing hold of their customer after selling out. Other than Tommy Hilfiger’s clothing line, because they were already losing a lot of steam…guess they couldn’t handle the pressure from Ralph Lauren, plus they had so many failed product attempts like the Tommy Hilfiger Red Label.

Do you think the customer of these brands feel as thought they have lost touch with their needs after being acquired? The aspect of producing profitable clothing overshadows the companies ability to make clothing that the consumers will continue to want? or Billion dollar corporations like Kellwood just to large to stay in touch and understand a smaller brands consumer needs?

These are some of my thoughts, because of how many consumers speak about how companies have become too big or too saturated and everybody has it, which is a part of being better financed so that you can expand your clothing line.

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Fred

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