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When BCBG, the brand best known for trendy special occasion dresses, announced in January that it would be closing a significant number of stores, the statement was met with a certain level of anguish.
BCBG was started by Tunisian designer Max Azria in 1989, and the company had been facing high costs from operating 175 US stores. It was also struggling to compete with the aggressive advancement of fast fashion, as well as fighting against the country’s general disinterest in mall brands.
At the time, company reps told Racked that the business would persevere. Two months later, though, more than 100 employees had been laid off, and the company filed for Chapter 11 bankruptcy. Help came in June in the form of an acquisition: Marquee Brands, which owns Ben Sherman, bought BCBG for $108 million, while Global Brands Group, which owns Juicy Couture and Frye, bought licensing rights for $27.4 million.
It was unclear what BCBG would look like under its new owners. Azria and his entire family had been pushed out of the company, and they had even tried to stop the acquisition. Azria had been on paid leave for over a year when the company filed for bankruptcy, according to the Wall Street Journal, and his wife, Lubov, was fired from her chief creative officer role in March. Around this time, their daughter, Joyce, who had been the creative director of diffusion line BCBGeneration, left the company to start her own venture, Avec les Filles, with Macy’s.
Retail acquisitions are tricky. When British fast fashion giant Boohoo bought LA startup Nasty Gal, customers were furious with how the transition was handled. Canadian wholesaler Gildan Activewear bought troubled brand American Apparel earlier this year and is now outsourcing production overseas, contrary to the brand’s very ethos. How would BCBG fare?
“We are starting the next chapter of BCBG,” Bernd Kroeber, BCBG’s creative director, told Racked at the brand’s New York Fashion Week presentation last week. “The number one thing is we survived, and the great thing is, there’s money! We are still a big powerhouse and now we have money to do marketing and reposition [ourselves] on the market again. We can breathe. This is the best gift ever.”
Kroeber, who was appointed as Lubov’s replacement in March, is a BCBG veteran with nine years of experience working directly under the Azrias. Although the brand’s NYFW presentation was far more low-key than the extravagant shows it’s thrown in the past — it was held in an empty store in the Meatpacking District with only six models instead of a huge venue with a full runway and scores of industry guests — the collection still had plenty of recognizably BCBG-esque dresses, both long and mini, flow-y and skin-tight.
“Our intention was always to make women feel beautiful, to give her outfits for her special occasions,” said Kroeber. “I really want the woman to fall in love with us again. I want her to trust us to get her the perfect quality and right sensibility.”
Cory Baker, the chief operating officer at Marquee Brands, said that there were plenty of other fashion companies to bail out at the time BCBG was in trouble, Wet Seal and The Limited among them. But BCBG presented the most enticing investment because of the response Marquee Brands heard from both customers and wholesalers.
“Here’s my litmus test: If the brand went away tomorrow, would anyone care?” explained Baker. “If The Limited went away tomorrow, would anyone care? I don't know the answer to that, but we heard that a lot of shoppers cared about BCBG. We also got that feedback on the retail end again and again from major department stores and some other specialty stores. They said, ‘Do not let this brand go away. It’s too important to us as a retailer, it’s too important to our customer.’”
Baker pointed to the buyers from Bloomingdale’s and Lord & Taylor present at the Fashion Week presentation. He admitted that after BCBG filed for Chapter 11, these same buyers expressed concern about continuing to carry the brand; some talked about pausing their BCBG buys. That concern has largely faded, he said — they’ve all placed spring orders.
Baker sees two problems that plagued the brand: bloated business operations and generic design. He believes BCBG was failing to differentiate itself aesthetically and was losing customers to Michael Kors and other mid-tier contemporary brands with even larger footprints. “Over time, a lot of these brands started to look very similar,” he said.
“With the introduction of Michael Kors and Theory, that space become crowded,” he continued. “I think at its core, if there was an issue, it was with the design. It started to look too similar to other things on the floor, and what BCBG needed to do was define itself differently through its product.”
Now the brand wants to be more intentional in its design. For this collection, this meant having Kroeber break down designs into categories, like romantic (which includes long, loose prairie dresses) and streetwear-inspired (like embroidered bomber jackets).
Baker was careful not to place specific blame with the Azria family, but did say the company needed new blood in order to have a successful reinvention.
“Look, the Azria family built this. Lubov is a visionary and a genius, and what she created on the design front is incredible,” he said. “Now we’re moving on to a new step. Bernd is in a position to spread his wings, and we feel really comfortable that the new design team can take what was so core and just really take it to the next level. It’s time for that.”
Part of the new plan for the brand is to keep the brick-and-mortar footprint small — there will only be 45 BCBG stores in the US now — and to expand into new categories: BCBG will launch fragrance and a kids’ line in the next 12 to 18 months. It will also focus on growing its existing handbag business.
One thing shoppers should not expect to change, however, is cost. Baker says the brand will still position itself as mid-priced and has no intention of going the fast fashion route.
“Sure, everyone’s impacted by Zara and H&M on some level, but that’s not a concept you can compete with,” Baker said. “Zara is BCBG for less, it’s Michael Kors for less. We’ll be delivering what customers can only get at BCBG, and that’s brand DNA.”
Correction: September 27th, 2017
A previous version of this story misidentified Tunisian designer Max Azria as Turkish.