WWD reported that Steve Madden is now a business partner of the iconic Betsey Johnson. Madden, who took out a $49 million dollar loan to cover Betsey Johnson's defaulted debt last month has now been freed from the financial obligation in exchange for in exchange for part ownership of the Betsey Johnson name and trademarks.
Madden will now receive royalties from licensing agreement. In exchange Steve Madden will help produce clothing and operate Bestey Johnson's boutiques. Though, this merger claims that the cartwheel Queen will still be the main designer and the spirit of the company will not change. Maybe it should.
With a $3 million investment over the next five years, the extra coinage delivered by Madden said to be covering Johnson's debt, trademark ownership and is also being added to marketing efforts.
It may be said though, that the problem with Betsey Johnson's current marketing strategy, essentially that there is none. The designer has always been uncompromising when it comes to her design aesthetic. Her whimsy, go with the flow attitude, perhaps translates into how her business is run. Sometimes, for Johnson its a matter of being in the right place at the right time. However, when it comes to having a plan in terms of biz strategy and how to make these girly frilly pieces sell, solid decisions are beneficial. In other words, what do you want to be when your "grow up" Betsey?
Hoover's business database lists Arcadia Group, which owns TopShop and Sugartown Worldwide, owners of Lily Pulitzer as Johnson's top competitors. There in lies one of the problems with Betsey Johnson. Lily Pulitzer, has a very distinctive group of loyal followers who buy tropical print 60's crop pants and kelly green tunics. As for TopShop, the trendy retailer, "inspired" by high end runway trends, falls into fast-fashion category. With Betsey's barely changed designs over her 40 years in business, with price points over $100 per item and prom style dresses, she fits into neither of these realms.
The previous point is not to discredit Betsey as a designer. She's innovative and certainly has a signature style, and many awards to prove it such as The National Arts Club 2009 Medal of Honor for Lifetime Achievement in Fashion and a plaque on New York's very limited "Fashion Walk of Fame."
Though when it comes to the business aspect, time and time again Ms. Johnson has stuggled with "selling out" and begrudgingly given into licensing agreements.
A brief history of the company exhibits successes and failures. In 1978 she scraped together her own funding, digging into her bank account which included money she made from an aspirin commercial to start her label. Weary investors, claimed they loved her creations, but were unwilling to take a risk on such unconventional pieces. Her first collection was a success, her second was a flop according a Milwuakee Journal Article circa 1981.
In the early 80's due to the popularity of rising mega star Madonna, donning a Bestey dress in a photo, the designer overproduced the garment before orders came in. As a result of a spontaneous prediction, she lost money. In 2001, Johnson told WWD, "At one low point, we opened up my loft and put all of my vintage up for sale. It takes three months to make up for one month of bad business. You go through ups and downs, but you never really are a sure bet."
In 2000, Johnson reminisced about her beginnings working for Paraphernalia, when she had complete creative freedom and still had the ability to remain relevant. With the "it girl" Edie Sedgwick as a fit model, dating a dude from the Velvet Underground and running around with the Warhol crowd, a certain too cool for school look flourished.
Perhaps this is where the current aquisition comes into play. Steve Madden is not journeying into uncharted design territory. Madden already holds the license for handbags, small leather goods, belts and umbrellas under the Betsey Johnson and Betseyville brands.
Though, the Madden/Johnson partnership should proceed with caution. It could end in a few scenarios: With Madden owned brands like Bakers, JC Penney's Olsen twin shoe line Olsenboye and Madonna's Material Girl, the potential to turn Betsey into down-market fast fashion is there. However, the runway- loving-avante garde-icon may not have a downgrade for upgraded sales in mind. If her addiction to creative freedom and her past comments to the press regarding what sells are any indication, Madden will have some convincing to do.
In 2000, after lending her name out, she found her designs in department stores such as Bloomingdale’s, Nordstrom and Macy's, this put a damper on her wild spirit. She told WWD that year after launching her side project Ultra, “We were so focused on making everything so salable. But it’s like turning off my light switch. I need to turn on that light switch." Ultra, since, has disappeared from the radar.
Conceivably, the best way to keep both parties happy is to brand Betsey Johnson in a way that keeps her idea of exclusivity while making business man Steve money. How do they proceed? I'd suggest taking a lesson from the Warhol days. Every brand can't survive by turning to luxury only so they would need to reach a middle ground.
Johnson will have change her rumored stance of anti-celebrity. Supposedly, the designer never lends or gives pieces to famous faces. But, she may not make the kind of money that pleases an industry titan like Steve Madden by selling dresses for bat mitzvahs and proms. Bestey should let go of accessibility only--that is, if she is really concerned with artistic merit-- and sneak out clothing to a certain type of starlet. Jump on the train and lend to uber cool kids like Katy Perry, Rhianna, and the "bad girls" who care, but act like they don't. Taylor Swift and Kelly Clarkson need not apply.
Scour the lists of the next big thing in a subculture soon to be pop cutlure and run with it, perhaps the likes of a Sex in the City style fashion-based TV show, a la Patricia Field?
At a time when many brand makers have given up on sending out samples for magazine editorials and are now banking on the celebrity driven culture craze, this strategy could pay big in the end for both parties. A re-branding launch in both print advertising and website redesign via the old controversy driven art/ fashion photography could help spring board how we as consumers should think of the brand. Terry Richardson just took on the Mango campaign, so it seems he'll be willing to put his magic touch non-luxury brands.
If there is one constant we can pinpoint about the Betsey Johnson brand, it's that she remains youthful and verges on costume. A Target-style collaboration could take the brand down, but past collaborations with the right retailers like Opening Cermony can keep Bestey freely concocting edgy fashions with a definable market. With so many low key e-commerce fashion sites, accessible from almost anywhere in the world at anytime like my-wardrobe, ASOS, LaGarconne, Forward by Revolve, Opening Ceremony, is it necessary to have your line in mass market department stores to generate a decent revenue? What these sites do, by cherry picking and editing what their customers want will save face for the brand, without risking the over saturation. The traduitional retail route can back fire when Macy's orders and stuffs racks full of your merchandise.
In addition, to the brand's own website and boutiques, taking the brand's clothing out of the majors and placing a bet on the "cool" factor is the best way to keep Betsey's light on and Madden's wallet stuffed.
The 2009 collection of Betsey Johnson Archive Curated by Opening Ceremony. Photos: Courtesy of Opening Ceremony,
Photographer: Sebastian Kim
Super Duper Complete History of Betsey Johnson over at M.I.S.S.
Betsey Johnson's Spring 2010 Show at The Plaza
