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Bring on the sub-brands

Sub-brands can better segment an offer and provide greater choice, but multiples must take care not to confuse shoppers and weaken the impact of their core ranges

Womenswear chain Oasis this week unveiled a raft of new sub-brands for spring 08. Similarly, Marks & Spencer launched its latest premium sub-brand Autograph Exclusive this season, while Next insists its new upmarket collection, Signature, which also launched this season, is an add-on to its mainline rather than a sub-brand. Meanwhile, George at Asda recently revealed it will axe one of its own sub-brands.

M&S argues that sub-brands enable it to better segment its product, while George says its offer, which includes three sub-brands, has lost focus and is confusing its core customer.

So when is it appropriate to introduce a sub-brand, and how should retailers use them to maximise their appeal without seeming schizophrenic?

Roger Wade, director of consultancy Brands Incorporated, says retailers need to address customers’ needs before launching sub-brands. “There are too many retailers out there, so they need to do something different,” he explains. “But it’s not as easy as just putting a name on a collection and calling it a sub-brand. Retailers need to engage and entertain their customers with a new brand. The brand needs to speak the same language as the customer and the marketing needs to appeal to consumers.”

M&S has successfully targeted its sub-brands at different customer groups without alienating any of its core shoppers. It now has seven sub-brands across womenswear and menswear – Autograph, Autograph Exclusive, Autograph Weekend, Per Una and Limited Collection in womenswear, and Autograph, Collezione and Blue Harbour in menswear. Per Una generates sales of more than £500 million a year, while Autograph has sales of £275m but is on target to reach Per Una’s mark within the next 18 months. M&S’s overall clothing division pulled in sales of £3.5 billion this year.

The retailer says sub-brands make the shopping experience easier for its customers. “We use sub-brands to segment our offer and reach a wider customer base,” says a spokeswoman. “Limited Collection, for example, is our fast-fashion brand, which gets updated more frequently, while Autograph Exclusive gives us a luxury element.”

Wade also praises M&S’s sub-brand strategy, attributing its success to the fact that each label remains true to the M&S customer. “Its strategy is very clever. It gave Per Una authenticity by associating it with a real designer [George Davies]. But M&S isn’t trying to fool anyone. Its sub-brands are still very M&S, and address its customers’ needs.”

Young fashion chain New Look is another master of the sub-brand, although less subtle in who they target. It has the core New Look range and layers sub-brands on top, such as plus-size line Inspire and teen range 915, to help shoppers identify which section of the offer is most relevant.

New Look’s buying and merchandise director of brands Vicki Watkin says it offers sub-brands because its strategy is to be a family retailer. “New Look itself is an inclusive brand with a wide customer base. Segmenting our offer makes for easy purchasing and allows a woman to buy for herself, her husband and child,” she says.

Dressed for success
Oasis creative director Nadia Jones says the womenswear retailer is poised to introduce a number of new sub-brands for spring 08 after the success of its Little Black Dress collection, which launched in store this season.

Oasis’s Belle label, an occasionwear brand to compete with Coast, will launch for spring 08. Casualwear brand Escape will also debut for spring, and Little Black Shoes – a sister footwear sub-brand to Little Black Dress and Ballerina – a ballet pump line – will also feature next season.

Jones says: “We’re launching Little Black Shoes following the phenomenal success of the Little Black Dress brand. Shoppers also want more clarity, because people have less time to shop these days.”

Oasis, which has experienced a tough year, is clearly attempting to lure back shoppers with its new offer. Sources say the chain has lost its way in recent seasons and that trading has suffered because it was unclear who it was targeting. The new ranges will each have their own branded area in store, helping shoppers to navigate the entire Oasis range more easily.

On the negative side, too many sub-brands can have a detrimental effect on sales and the clarity of a retailer’s offer. George’s sub-brands include young fashion label G21 and fast-fashion range Must Have, as well as a mainstream line called Collections. Last week, George brand director Fiona Lambert told Drapers George would axe one of its sub-brands, but was yet to decide which to cull. “The ranges need more clarity and focus,” said Lambert.

Industry sources told Drapers that G21 had experienced difficult trading, but Must Have, which is fronted by WAG Coleen McLoughlin, was also absent from the retailer’s spring 08 press show that took place last month.

Wade suggests that George may not need sub-brands because its customers look at clothing as a commodity product. “George started as a sub-brand for Asda and had some kudos because it was launched by George Davies,” he says. “But just because George has done well as a brand in its own right doesn’t mean [the supermarket] can successfully enter other fashion sectors.”

Next is one of the few high street retailers to have opted out of using sub-brands to differentiate its offer. It insists that its premium collection Signature should not be referred to as a sub-brand, and that it is simply an add-on to its core collection, which it says is strong enough to carry different tiers of product.

A spokeswoman says: “We make our decisions based on customer and market research, and we’ve found that our customers don’t want the Next offer to split into sub-brands. Signature doesn’t stand on its own and is included all our collections, from womenswear to kidswear and footwear.”

She adds that Next has no plans to introduce sub-brands in the future.

What is clear is that launching a sub-brand for the sake of it can dilute the core brand’s message and overwhelm the typical high street or value shopper. Even M&S, for example, was spreading its sub-brands too widely and too thinly before chief executive Stuart Rose took charge of the business. Part of his strategy when he took over was to streamline the offer by removing the SP and Per Una Due sub-brands from the retailer’s portfolio.

However, sub-brands can prove invaluable to retailers with a big offer and broad appeal, providing they are marketed and given enough credibility in store.

Watkin adds: “If retailers such as us, H&M and Zara want to grow and stretch our offer, we need to give customers the total package – by offering sub-brands.”

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