Title: The jean genius charges ahead
If you want to know the kinds of problems that David Bitton deals with every day, just visit Buffalo David Bittonís outlet at the corner of St-Catherine St. and Drummond.
Right next door is a Guess jeans store. Further down is a Mavi Jeans boutique. At the end of the block sits a Gap outlet, which also carries a jeans line. Thatís four competitors between two street corners. But if you ask Bitton, the Buffaloís president and co-owner, about other merchandisers all youíll get is a blank stare.
ìWhy should I care about the competition?î asked Bitton. ìI prefer to concentrate on producing designs that people want to wear. If I do that, people will buy my product and if I donít they wonít.î
By all appearances, Bitton seems to be doing his job. In the last five years, Buffalo David Bitton has more than doubled its sales, and expanded into a slew of international markets. But despite Bittonís reluctance to talk about his competition, the fact that his company has been in business almost 30 years and now employs more than 1,000 people, is a good indication that he is doing what it takes to stay ahead.
Bitton began his career as a sweater designer but moved into denim in the late 1970s. His first venture was named Genius Jeans which at the time, manufactured most of its products locally. In 1989 the company picked up the license to market the Buffalo trademark in Canada from a French company.
In the mid-1990s the company changed its name to ìBuffalo David Bitton,î to better position itself to tackle U.S. retailers who prefer that a designer name be attached to a brand. Another side benefit of the re-branding was that the company no longer had to pay fees to the French licensor. Today Bitton does most of his designs locally with production outsourced to a dozen or so plants, most of which are in southern China.
Like many of its mid-range competitors, Buffalo David Bitton targets the 15 to 35 demographic, a group he knows well. ìKids today care more about their appearance than ever before,î said Bitton. ìAlthough they are lazier than previous generations, they put in a lot of time at the gym and they are not shy about spending money on the right clothes.î
Buffalo David Bittonís distribution is done through several channels. These include its 42 company-owned stores, direct selling to independents and through exclusive label sales to major retailers such as Sears, the Bay and Athleteís World.
The company spends heavily to promote the Buffalo David Bitton brand, laying out several million dollars a year in print and outdoor media advertising. It also produces plush catalogues featuring some of the worldís top models shot in exotic locales such as Brazil and Morocco. As a result, Buffalo David Bitton is becoming increasingly well-known in international markets, which now provide close to half of the companyís revenues. And in a strange twist of fate, instead of paying licensing fees, Buffalo David Bitton now generates licensing revenues.
According to Gabriel Bitton, the companyís business development manager and one of five Bitton brothers who are active in the business, the companyís international success is the result of a long-term building strategy. ìWe did a lot of legwork and now the world is ready for us,î said Gabriel Bitton, in a telephone interview from Dorval airport while he awaited a flight to Chicago, where he is trying to sign up a major account.
Richard Simons, merchandizing manager at Simons, which runs department stores in Montreal and Quebec City has been stocking Buffalo jeans, T-shirts and sweaters for more than 15 years. Simons sells slew of mid-range jean brands in his stores including Silver, Dish and Guess, and is thus in a unique position to assess Buffaloís strengths.
ìThe owners work very hard and they understand what sells,î Simons said. ìMy priority is the customer; to find the best products that will make her look good and to give her what she wants. And Buffalo provides that, year after year.î
However although Buffalo David Bitton appears to be going great guns, according to one marketing expert, jeans merchandisers face many challenges in the years ahead. ìBaby boomers seem to be spending a lot more money on jeans, but thereís a lot of competition for teenagersí cash,î said Michel Laroche, a marketing professor at the John Molson School of Business. ìWith all the new must-have gadgets like cell-phones and IPods, teenagers arenít going to have as much money to spend on clothes as they did in the past.î
For the time being these challenges donít appear to be affecting Buffalo. In recent years the company has signed distribution and licensing agreements in Russia, South America, Saudi Arabia and Australia, and it plans to add between one and two new countries per year to its geographic reach. Beyond that, a public stock issue remains a possibility to speed future growth.
ìIf you look at the 30 or so brands in the jeans department at Bloomingdales or Macyís, almost all of them have gone public. So we get a lot of calls (from investment bankers),î said Gabriel Bitton. ìBut we always grew steadily and never milked the business. So it makes just as much sense for us to buy someone else rather than they buy us.î
|© 2005 Peter Diekmeyer Communications Inc.|