At a time when numerous outdoor brands are signaling higher prices ahead amidst rising raw material, labor and transportation costs, Gramicci is announcing a contrarian strategy.
The Agoura Hills, Calif.-based outdoor and climbing apparel company (www.gramicci.com) is lowering its prices to retailers and consumers by an average of 20 to 25 percent starting with its fall 2012 products, Gramicci President Marty Weening told SNEWS.
The decision comes after Gramicci was able to lower its production costs “by leveraging the production influence and clout of the Haggar brand,” Weening said. Gramicci signed a master license agreement with Haggar Clothing Co. (www.haggar.com) in 2009. (Click here to read the Dec. 14, 2009 announcement by the companies.) Under the deal, Haggar finances Gramicci, with an option to purchase the company, while Gramicci officials maintain control of creative, design and sales.
Gramicci’s products are now being produced in factories where Haggar has experience – mostly in China, Bangladesh and Egypt – but “none of the piece goods have changed, and there have been no cutbacks,” Weening told SNEWS. “It’s the same piece goods from the same mills, same laundering and dyes.”
Gramicci already manufactured in Asia, but was facing the same production price increases that many outdoor companies have reported in the past year. (Click here to read a March 3, 2011 SNEWS story on softgoods inflation within the industry.) Before Gramicci finalized the recent factory switches with Haggar, it increased wholesale prices by about 8 percent on its spring 2012 products. Retailers responded tepidly, increasing the brand’s U.S. sales by less than 2 percent, Weening said. It was the final sign for company officials to move ahead with Haggar to reduce production costs and lower prices.
“Our prices went up and we thought that was contradictory to where consumers were in the marketplace,” Weening said. And despite early indications of a strong 2011 holiday shopping season and data suggesting consumers are spending more on outdoor goods (click here to read an Oct. 31, 2011 SNEWS story on sale price increases), Gramicci officials aren’t bullish on the economy for 2012/13.
“A lot of people are still struggling,” Weening said. “Our job is to remain astute students of the consumer … to find compelling price points to help consumers feel more willing to part with their dollar.”
Gramicci has branded the price drops as its “Pass It On Savings” program. Some examples include its G-Climbing Pant reducing in price from MSRP $58 to $46, its Dourada Guide Pant going from MSRP $60 to $48, and its Mountain Jean falling from MSRP $62 to $50.
The pullback in prices won’t mean a pullback in products, Weening said. At the upcoming Outdoor Retailer Winter Market 2012, Gramicci plans to unveil an expanded Natural Performance Technology line – apparel made with a pesticide/herbicide-free, certified organic and hemp blend, which company officials claim “produces higher levels of moisture management, breathability and body temperature regulation than synthetics or the new performance cottons.” Gramicci also will continue to push its new G-Movement line, workout-intended wear mostly for women, which debuted at Summer Market 2011.