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Designer John Varvatos on Fashion Industry: How Jessica Simpson Became America’s $1 Billion Sweetheart

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January retail sales were slightly less than expected Tuesday, but they did rise a seasonally adjusted 0.4% to $401.4 billion compared to December sales that were flat, signaling another small improvement in state of the U.S. consumer.

To get a retailer's perspective on the consumer, The Daily Ticker's Aaron Task sat down with menswear designer John Varvatos of the eponymous brand who says the situation has "definitely improved."

"I think [consumers] are shopping again," says Varvatos. "I think they are more thoughtful in they way they spend their money but they are shopping."

Varvatos, whose early career included top positions at Polo Ralph Lauren and Calvin Klein, has grown his brand from his first store in 2000 located in New York's SoHo neighborhood to nine stores across the United States almost twelve years later. His designs are also available in some department stores as well as online at his website.

Although his target customers are middle-to high-income males age 25 to 50, he does have his thumb on the pulse of the overall and retail fashion industry. "I think the whole landscape of fashion in America and the world has been changing," says Varvatos who is starring as a "mentor" in the upcoming new NBC reality show Fashion Star which debuts in March, along with host Elle MacPherrson and "mentors" Jessica Simpson and Nicole Richie. The show allows unknown designers to compete against each other for the chance to sell their items in three of the country's biggest retailers, Macy's, H&M and Saks.

In today's world of reality television and instant communication provided by social networking, Americans' obsession with celebrities has become evermore prevalent. Females, especially, are drawn to the everyday and red carpet fashion styles of stars like Jennifer Aniston and Angelina Jolie, says Varvatos. But up until just recently, high-end fashion has not been accessible to average Americans.

"As everybody becomes more interested in [fashion], everybody does not have access to designer price points," explains Varvatos. But Simpson, his co-star on Fashion Star, has made millions of dollars selling American women chic clothes at reasonable prices. Simpson, who launched her brand in 2005 with just shoes, has grown her collection to include 22 different categories from handbags and eyewear to swimwear to jeanswear to even luggage. Here's the kicker. By the end of this year, The Jessica Simpson Collection is expected to hit $1 billion in sales, according to the Camuto Group, which owns the license to her brand. Last year Simpson took in $750 million sales, which is on par with designers like Michael Kors.

Varvatos spent a lot of time getting to know Simpson and observing her fashion sense and business acumen on the set of Fashion Star. While celebrity can impact the success of a brand, in the case of Simpson, her success has much less to do with her celebrity and much more to do with who she is as a person.

"Jessica is a celebrity, but I think she connects with women in America," says Varvatos, noting that she is a full-figured woman who is not afraid to flaunt her body. Simpson has also done an excellent job making clothes women can wear that are not just for the runway. "The celebrity doesn't hurt, but she's kind of like America's sweetheart," he says.

Target has also done a great job giving consumers access to high-fashion designs.

Last fall Missoni, whose clothes price in the hundreds of thousands of dollars, launched a capsule collection of 400 pieces at Target. Its pieces priced between $40 for a skirt and $600 for outdoor patio furniture. The overwhelming demand for Missoni's designs crashed the retailer's website. Most recently, Target launched a much smaller collection with designer Jason Wu, whose collection also sold out quickly.

But this begs the question: Are the designers at risk of tarnishing their brand? "As long as you don't detract from or hurt that business at the top" it's a great business strategy for certain designers, says Varvatos, who predicts we'll see more of these capsule collections in the near future. Varvatos has been approached many times to feature a lower-price point of his brand, but tells Aaron the timing is not right for his company.

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