Is 7 for All Mankind a One-Hit Wonder Brand?

An article in Friday's Wall Street Journal examines denim company 7 for All Mankind's recent foray into all things non-denim, and whether or not it can work.

As you may recall, I wrote a previous entry about the luxury denim business, and I mentioned that I thought 7's expansion into new product categories meant it would be one of the few premium brands that would ultimately stick around.

The Journal's article supports this theory, with additional facts that I didn't know when I wrote my previous entry. Consider this, for example:

Launched in 2000, without any advertising but lots of word of mouth in hip, fashionable circles, Seven For All Mankind's jeans quickly became hot sellers, racking up $70 million in sales in its second year in business in 2002, up from $13 million its first year… The brand burned hot enough to catch Wall Street's attention. In 2005, Bear Stearns's Merchant Banking unit bought a 50% stake in Seven for All Mankind LLC for nearly $300 million. Founder Mr. Koral owned the rest. He is staying on with Seven until his contract expires in February.

Certainly, an additional feather in 7's hat is that it has the support of a major apparel company, VF Corp., which acquired the brand for $775 million in August. VF owns sportswear brands, like Nautica and John Varvatos, as well as denim brands, like Lee and Wrangler. 7 should be able to take advantage of the sportswear resources VF already has as it launches "$795 handbags," "$450 jackets" and its own storefronts.

But aspiring lifestyle brands, beware. The Journal article notes that other brands like Ugg Australia, Crocs and Von Dutch Originals have struggled to expand their product line beyond their core product. But unlike 7, these brands were really "one-hit wonder" products that created markets that haven't proved to be as sustainable as premium denim. (According to the NPD Group, premium denim is still the best selling jean segment in department stores—men's sales rose 45 percent, women's rose 24 percent. I am not sure we could say the same for the "furry boot" market or the trucker hat category—let's face it, these were fads, trends that were blips on the map).

Given these facts, I see no reason why 7 for All Mankind should not be successful in expanding. From my days covering retail for Retailing Today, I happen to know 7 has been experimenting with adding sportswear product to its mix at high-end department stores for a little while. I saw the product at the previews I attended starting in fall 2005. The fact that VF has bought them is accelerating this process and bringing it to mass attention, but it had been done before.

Given that, I assume the brand has moved forward with making new product because it has received a favorable reception to what it tested previously. Therefore, I would argue its product extension does not ruin its cachet so long as new products it produces are on par with the perceived quality of its denim-- and the new products also maintain that same price range ($800 handbags... check).

All signs point to that being the case.