Key Issues of the Company
The study focuses on the issues Oscar de la Renta’s company was facing before and during the 2004 rollout of their new line of sportswear which was an attempt to diversify their catalog with relatively inexpensive apparel that would be affordable to the middle-class demographic. While the company did not experience any issues during their period, with 2002 and 2003 being the best years in the history of the company, there were issues of expansion. Oscar de la Renta was always a luxury brand with their largest revenues coming from their Signature line, an average suit in this line cost $3,500. But with the positive changes in management that happened in the last ten years and a visibly increased awareness of the brand, the need to expand the company was clear.
This situation introduced a variety of issues, however. One of the debated strategies was whether Oscar de la Renta should have its retail presence in the form of a boutique. Creation of a boutique could present new opportunities to the company such as communicating a clear image of the brand to the customers, raising the profile of the company, opportunity to test the new product, and opening access to the Asian markets. Nevertheless, opening a stand-alone boutique would take a lot of resources because it would mostly serve as a marketing tool, rather than a money-making opportunity. Also, Oscar did not have the breadth of products to sustain a stand-alone store at the time.
Another issue that expansion presented was in need to choose where the company should expand. Over the last 35 years, Oscar de la Renta focused primarily on creating their unique style of couture, and trying to copy their competitors at this stage would only hurt the brand. This brand also gained strong respect and adoration in the Latin community. Oscar himself generated an extraordinary amount of pride and was considered a celebrity in this community. The company saw this as an opportunity to expand and monetize the brand, but it revealed a new concern: a company could get “pigeonholed” as a “Latin” brand.
By 2004 this “cult of personality” around Oscar started to become an issue in itself. Oscar de la Renta was in his 70s, and even though he made sure to always stay in touch with the needs of the public, the issue of sustaining his legacy could not be ignored. In case anything happened to the leader of the brand a strategy had to be developed.
Competitive Edge
As mentioned earlier Oscar was an established luxury brand at the time, but it had a unique approach to couture. Oscar himself had a vision of couture clothing that is created with the satisfaction of the client in mind, as opposed to other brands that were focused on selling dresses that were more avant-garde than comfortable. This innovative approach helped his brand stand out among the already established European companies. It was a niche market, but Oscar became a respected brand within it.
The Target Market
Until 2004 the target audience for the brand was only the upper class. With items of clothing priced in multiple thousands of dollars, it was just not viable for the average middle-class person. With the push to expand they focused on these middle-class people who already had an affinity for the brand due to Oscar’s personal story, as well as his approach to fashion. Although he was especially popular in the Latin community, the company decided not to focus specifically on Latin-inspired clothing and instead created a line of sportswear that would include a wider demographic.
The Brand
The brand of Oscar de la Renta was on the rise at the time. As a person, Oscar was respected for his inspirational story and people-oriented approach to fashion, and as a company, Oscar was seen as a unique voice in the world of fashion. In 1994 Eliza Reen Bolen, the stepdaughter of Oscar de la Renta became the head of licensing. Before 1994, licensees had no rules or guidelines about representing the Oscar brand which led to a very inconsistent representation of the company. Eliza was very familiar with the style the company had so she took it upon herself to implement a strict set of rules for licensees to create a coherent image of the brand. Control over the brand image was crucial, and it paid off. Even when their competitors were failing during the early 2000s, Oscar had some of the best years for the company.
Suggestions
I believe the company was taking the right steps toward diversification and market expansion. They had an eager audience that could not afford to buy their product, so it was the right move for expansion. As mentioned earlier Oscar de la Rente did not have the breadth of inventory to support a boutique, but they had a lot of interest in opening one. It would be beneficial to expand the line of products with more affordable lines of apparel, as well as accessories. After establishing itself as a diverse brand, it would be safer to capitalize on the respect of the Latin community.