Influx

Fortune has a good story about VF’s Nautica brand, which seems to be having some trouble competing with department store brands and the category leader Polo.

VF has long adopted a strategy of acquiring brands with limited distribution and leveraging its muscle at a department store level, to grow them. It now looks like this strategy is coming undone. Department stores are in love with the margins that private label can achieve and some have even gone out to seek the services of Ralph Lauren to help them develop their own-label brands.

This makes life tough for VF, it can no longer rely on department store distribution as a given and has to invest in building these acquired brands through broad scale communication and brand experiences.

Fortune, even notes one of Nautica’s major weaknesses is that it has no stand-alone stores and I noticed it doesn’t yet have e-commerce on its website, although this is coming in 08.

Posted by Ed Cotton