Urban outfitters

Classic clothing labels like Tommy Hilfiger and Nautica are getting some edgy urban competition in department stores -- from names like Sean John, Phat Pharm, Ecko and Enyce that were once seen as too gritty for the place where your family shops

Urban clothing brands, which in the past were showcased only in small clothing stores and inner-city chains, are gaining more space and attention at department store companies such as Saks Inc. and Federated Department Stores Inc. Industry analysts say the clothes are re-energizing the stores' young men's floors, and as the labels expand into women's, children's and accessories areas, they're expected to give the stores a more modern feel.

"These brands have added more energy, more fashion assortment to the floor," said Michelle Monigal, vice president and divisional manager of young men's and boys apparel at Macy's West division. The division has tripled the square footage for urban brands over the past two years.

"I see this as a big opportunity to reinvent the department store model. Department stores haven't been on the top of the minds for young men and teen girls," said George Jones, president and chief executive of Saks Inc.'s traditional department stores, which include Proffit's and Parisian.

Opportunity knocks

The number of the company's department stores that carry urban brands is now up to 40 from only five 18 months ago, but Jones sees a tremendous opportunity in all 243 units.

Designer Tommy Hilfiger, who has lost cachet among the urban following that he courted, appears unfazed. "There is room for everything in the market. ... We have a broader audience than I think any designer in the world," he said.

The popularity of urban brands, particularly in clothing stores, isn't new. But with sales of many of these brands reaching well over $100 million, they are appealing more to suburban youths rather than just those in the inner city, according to Todd Slater, an analyst at Lazard Freres & Co.

Sean John Clothing Co.'s wholesale volume is expected to reach $145 million this year, up from last year's $101 million, driven in part by sales at department stores, according to Jeff Tweedy, executive vice president. Federated, for example, has increased space devoted to Sean Jean from 190,000 square feet last year to 300,000 to 400,000 square feet this year.

Phat Farm expects to have wholesale business of $300 million this year up from $225 million in 2001, according to Myorr Janha, director of marketing.

Bad boy image

Department stores weren't always willing to showcase urban lines, given the bad boy image of some of the rap artists behind these clothing lines, such as Sean "P. Diddy" Combs, who owns the Sean John fashion company. Now, however, after seeing such overwhelming appeal and sales volumes, the department stores can't afford not to market the clothes aggressively.

Still, many executives from companies like Phat Farm and Sean Jean say they don't want to be stereoptyped as urban brands, given their multi-cultural appeal. And they emphasize that each of the lines feature their own design aesthetic. Phat Farm, for example, is known for classic-style argyle sweaters and denim sportswear. Sean Jean, meanwhile, has more flamboyant clothing that includes pinstriped suits, shearling coats and suede shirts and pants.

Furthermore, some rap artists like Russell Simmons, who is behind the Phat Farm label, believes department stores' efforts to expand the urban business aren't enough.

"We deserve more space," Simmons said in a telephone interview. "They have been too slow in expanding." He added that he is working with store executives to negotiate more floor space for his clothing.

Simmons added, "We want to be the next big American company."

Losing their cachet

While they want department store exposure, these labels face the challenge of losing some of their cachet and antagonizing their specialty store customers that want to offer the clothes exclusively.

"There is some tradeoff," said Lazard Freres' Slater. "They want credibility. They want to be recognized in department stores. But is the credibility they seek worth it?"

Slater noted that he is seeing urban fashions becoming more acceptable and less risky for mass-market retailers.

Executives behind the labels insist they won't let their clothes lose their edginess.

"When things become too available, they become unwanted," said Lando Felix, co-founder and vice president of design for Enyce. "We are concerned about overdistribution. We are being very careful."