- The Washington Times - Thursday, August 10, 2006

Most young people will say they are trendier than their parents. They cultivate different images, meant to attract different people. So do stores.

Many new store names popping up around the Washington area are the offspring of well-established retailers looking to boost sales with a new, more exciting brand name that targets a different demographic than their parent.

Cusp, a luxury boutique that opened its first store last month in Tysons Corner Center, is a creation of department store Neiman Marcus. Tysons is also home to the first Martin + Osa store, an American Eagle Outfitters creation that targets slightly older consumers than the teen-focused parent company. Rugby, which opened on Wisconsin Avenue in Georgetown earlier this summer, is a punk-preppy child of classic retailer Polo Ralph Lauren Corp.

It’s a move happening across the country. When retailers approach saturation with their core stores, they create spinoffs that target slightly different demographics to regain growth.

Analysts say consumers get bored with the core concept store.

“Customers see the same store day after day, week after week, month after month,” said Kurt Barnard of Barnard’s Retail Consulting Group in Nutley, N.J. “Consumers today will respond to enticements if you captivate their interest.”

Abercrombie & Fitch said in its most recent annual report that the chain can no longer grow in American shopping centers. Instead, it’s looking to large U.S. flagship locations, international stores and its spinoffs: abercrombie kids, Hollister and the new Ruehl No. 925.

“Abercrombie & Fitch used Hollister for a growth vehicle for several years,” said Mary Brett Whitfield, senior vice president at Retail Forward, a Columbus, Ohio, retail consulting firm. “They recognize that eventually will be tapped out or they’ll no longer be able to grow in an organic or meaningful way and they’re looking for their next vehicle.”

Thus, Ruehl No. 925, a college-graduate version of its teen-targeted Abercrombie & Fitch stores, was born.

Other new chains include Jimmy’Z, a chain targeting slightly older consumers than parent Aeropostale Inc.; ; Marciano, an upscale women’s clothing chain of Guess Inc.; and crewcuts, the child-sized version of J. Crew Group Inc.

While retailers have been opening spinoff stores for years, the pace has picked up since 2005.

Some analysts said the economic prosperity of the past few years has given retailers an opening to get new concepts on the streets.

“All of these concepts would have been under development over the last couple years. The recession and the events of 9/11 caused a lot of companies to slow down, put things on the back burner that they might have been developing or thinking about development,” Ms. Whitfield said. “It could be why we’re seeing a lot at this point in time.”

Martin + Osa, which is scheduled to open its first location next month in Tysons Corner, is a sportswear brand targeting men and women from 25 to 40, older than parent company American Eagle’s teen clientele.

American Eagle’s new store openings have slowed from 127 in 2001 to 36 in 2005. But its sales are still growing. Net sales jumped 23 percent to $2.3 billion in 2005 — it’s first year over the $2 billion mark.

“When you have such a strong component of marketshare, you’re compelled to look at alternative growth vehicles that become the next opportunistic venture,” said Arnie Cohen, chief marketing office at Martin + Osa.

Those ventures include Martin + Osa and aerie, an intimate-apparel collection it plans to introduce at its existing stores.

“[American Eagle] is a big business,” Mr. Cohen said. “In all big businesses, you have to be looking out three, five, seven years at what’s going to propel big growth.”

The chain plans to open four more locations throughout the country this year.

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