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KAREN MURRAY AT THE HELM ! THE LICENSING JUGGERNAUT ! DAVID CHU’S NEXT CHAPTER

NAUTICA AT 30PHOTO BY ELI SCHMIDT

Nylon jacket, polyester polo shirt and cotton and nylon pants.

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The company built on an affinity for a rugged, seafaring life has evolved into a full lifestyle collection with product from tailored clothing and women’s wear to accessories and home goods — but has never lost its love of the water.

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WWD THURSDAY, FEBRUARY 7, 2013

Captain’s Log

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A look at Nautica’s three-decade voyage.

1983: David Chu launches Nautica with six pieces of men’s outerwear.

1984: Nautica hits $2.5 million in sales.! State-O-Maine purchases the Nautica brand for $500,000.

1991: Brand expands into men’s sleepwear and loungewear.

1993: State-O-Maine is renamed Nautica Enterprises.

1994: Eyewear is introduced.

1996: Men’s jeans, Nautica Competition and Nautica Kids make their debut.! Nautica Voyage, a men’s fragrance, is introduced.

1997: Women’s swimwear and men’s tailored clothing are launched.

1998: Nautica expands into home.

1999: Women’s sleepwear and Latitude/Longitude fragrance are introduced.

2000: Women’s jeans are added.

2001: The company opens a flagship in Rockefeller Center in New York.

2002: Men’s underwear is launched.

2003: VF Corp. purchases Nautica for $600 million.! Chris Heyn is named president of Nautica Sportswear.

2004: Chu exits Nautica. Rockefeller Center store closes.

2005: Infant and juvenile bedding is introduced.! Navigate Life campaign launches; 20th store in Italy and 150th store in China open.

2006: Women’s sportswear and Voyage fragrance are added.

2007: Karen Murray is named president of Nautica.! My Voyage fragrance is introduced.

2008: E-commerce site is launched; luggage is added.

2009: Oceans fragrance launches.! Outdoor furniture

is added and indoor furniture is relaunched.! Men’s and children’s footwear and women’s outerwear are added.! Nautica becomes the largest corporate sponsor of Oceana. Advertising is brought in-house.

2010: Pure Nautica fragrance launches.! An interactive blog called Nautica360 and social media platform make their debut.! The company launches Ocean to Ocean marketing campaign.

2011: Pure Nautica Discovery fragrance is added.! The brand sponsors the Prudential Center in Newark.! The Keys furniture collection is added.

2012: Give Change to Make Change ad campaign is launched. ! Brand launches in South Korea

and signs licensing deal for India.! Nautica becomes a sponsor of Charity: Water.! Aqua Rush men’s fragrance launches with Coty.

2013: Nautica marks 30 years in business with a special anniversary collection.

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David Chu in 1987.

The Rockefeller Center store, 2001.

A beach look from summer 2001.

A look from 1993.

Swimwear, 1998.

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Women’s jeans, 2000.

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NAUTICA IS MARKING 30 years on the oftentimes chop-py seas of retail — and the business is in ship-shape con-dition today, with sales on the upswing and ambitious initia-tives bolstering the brand.

The company, a unit of mammoth VF Corp., continues to expand its global footprint with international partners and ramp up its e-commerce goals, and is relaunching a wholesale women’s sportswear business this season as well as plotting a return to full-price freestanding retail in the U.S.

The multiprong growth plan comes against the back-drop of a yearlong marketing campaign that will celebrate Nautica’s three-decade anni-versary, which the company is heralding as “30 Years on the Water.” The achievement will be touted in everything from advertising and window displays to shopping bags and Nautica product itself that bears special markings on la-bels and hangtags with the ru-bric “Since 1983.”

“It’s a true testament to the strength and relevance of the brand. Nautica is in-ternationally recognized and worn — and it also incorpo-

rates the latest design tech-nologies while still staying true to its roots and mari-time heritage. That’s what consumers responded to 30 years ago, and still do today,” said Eric Wiseman, chairman and chief executive officer of Greensboro, N.C.-based VF Corp. “What began as a collec-tion of outerwear 30 years ago has become a leading global lifestyle brand representing the finest in men’s, women’s and kids’ apparel and acces-sories, as well as a complete home collection. From eye-wear to swimwear, home to watches, today Nautica has 58 licensed categories, all of which reflect the brand’s com-mitment to quality, integrity and service.”

VF Corp. acquired Nautica Enterprises Inc. in 2003 for $600 million, establishing it as the anchor of a newly estab-lished sportswear coalition.

Today, Nautica rings up $1.5 billion in annual retail sales in 75 countries, including all licensed categories. According to VF estimates, Nautica is the third-largest men’s sports-wear collection brand in U.S. department stores.

“It’s a wonderful mile-stone for the brand. What it speaks to is that it stands the test of time,” said Karen Murray, president of VF’s sportswear coalition and the executive with direct over-sight of Nautica. “At the end of the day, it says a lot about this type of product and look. Whether you call it nautical or red-white-and-blue, this clean, classic, colorful and bold look really resonates with men.”

For the past four years, Nautica has posted com-pound annual growth of about 6 percent a year, mostly from the men’s sportswear busi-ness, according to Murray. “We’re planning more accel-erated growth for 2013. Our outlet business is really gain-ing momentum, as well as e-commerce. Overseas, growth in international territories is being driven by China, Latin America and Israel in the Middle East,” she added.

Nautica will crown its an-niversary publicly on Friday with a big-budget runway show at Lincoln Center during New York Fashion Week.

“We usually do a smaller-scale presentation. This is a bit bigger and more of a cel-ebration. It’s been five years since we did a runway show,” said Murray. “We’ve had great momentum with the brand for the past three to five years. Every year gets better. We are proud of what we achieved. That will come across loud and clear when anyone looks at the runway.”

According to VF’s most re-cent 10-Q filing, operating mar-gin in the sportswear coalition improved to 10.3 percent in the first nine fiscal months of 2012, up from 9.7 percent, on the strength of a greater per-centage of revenue from high-er-margin direct-to-consumer sales and a declining percent-

age of sales from lower-margin distressed product.

“The charge when I came in was to really make sure that this core men’s product line was reestablished,” said Murray, who joined VF Corp. as president of the Nautica business in 2007 and was promoted to president of the sportswear coalition in 2008. “I would say each year it’s improved. We’re at the point right now where for the past two to three years, we are put-ting on nice sales increases

and we are more profitable. Our department store business is very strong and our global business is very strong. Our business online has traction now and is growing at 50 per-cent gains each year. The rea-son that it’s got such momen-tum is that we have been very consistent and offer strong price-to-value on all our prod-ucts. That’s key.”

Nautica’s key competitors in department stores are Polo by Ralph Lauren and Tommy Hilfiger, with the trio usually

grouped together stylistically as the traditional “red-white-and-blue” brands.

“If you look at collection floors in the U.S., we are al-ways surrounded by Tommy and Polo. The other brands are more updated or contem-porary, such Calvin Klein, Kenneth Cole and Perry Ellis. They focus on rope-taupe-and-beige and grays and blacks,” explained Murray. “We all share a space, but our lane is with the classic brands.”

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We’re planning more accelerated growth for 2013. Our outlet

business is really gaining momentum, as well as e-commerce.

— KAREN MURRAY

Guiding the GrowthWith a focus on performance, international expansion and the relaunch of a women’s collection, Nautica chief Karen Murray is firmly at the helm. By David Lipke

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Nautica offers a value proposition compared to Polo, with prices across the board that are 20 to 25 percent lower than the Ralph Lauren brand. Pricing is on par with Tommy Hilfiger in many product categories.

“Polo has always been the premium position. We look at core categories and we try to get the sharpest price we can. We have a pair of jeans, a woven and a knit shirt, each for $50, and we have a sweater program at $45 year-round. Of course, we also have elevat-ed product that sits above that. But it’s about strong product, quality made, at a strong price value,” said Murray.

To differentiate itself further from its competitors, Nautica has embraced a performance stance on many styles, incorporating wicking properties and extra-durable fabrics to its designs. “We’ve added those character-istics in core product like pants and woven shirts. They are wrin-kle-resistant, they wick moisture, travel easily and are comfortable. We do this in wovens and knits, our performance fleece and in our outerwear. We call out all these additional benefits, and have been able to differentiate ourselves from the pack and find a ‘white space’ on the men’s col-lection floor,” said Murray.

Last year, Nautica made a big change to its knit polo shirt — which it calls a deck shirt — switching from an all-cotton fab-ric to a performance fabric that is 60 percent cotton and 40 percent polyester. It was a big gamble, as the short-sleeve knit category represents almost 30 percent of all Nautica sales. The new shirt looks and feels like cotton but has the performance attributes of a synthetic, such as moisture wick-ing, wrinkle resistance and hold-ing up to washing better.

“It was a big leap for us, but it worked. It’s been a home run,” said Murray. “Continuing to deliv-er on the performance platform is key. It differentiates the line, and we know the customer really val-ues these performance features.”

Knits, woven pants, fleece, swim and denim have been top category performers for Nautica in recent seasons. Outerwear, an important category historically for the brand, has been more difficult, due to macro weather trends. Consumers are increas-ingly choosing lighter-weight alternatives to heavy coats, said Murray.

“Outerwear is a category that seems to shrink a little bit every year, not just for us but the entire marketplace, due to global warming. That is a category I wish were stronger,” she observed. “Other businesses are infringing on that and taking market share, like knit active or performance fleece or sweat-ers or blazers or completer pieces. All of those items are being worn as out-erwear. The outerwear season is ef-fectively November and December and after Christmas those items are half the price, so it’s not a money-making proposition for anyone at this point. It’s a tough business.”

In the U.S., Nautica is wholesaled in about 1,500 department store shops with partners including Macy’s, Lord & Taylor, Dillard’s, Bon-Ton, Belk,

Boscov’s, Stage Stores and Peebles. In Asia, the brand is sold at 397 points of sale; in Latin America, 302; in Europe, 54; in India and the Middle East, five, and in Canada and Australia, 153.

Macy’s is Nautica’s single largest wholesale partner and has carried the brand since its first season 30 years ago, when it was founded by designer David Chu. The collection is versatile enough to sell in smaller as well as larger Macy’s doors around the coun-try, said Jeff Gennette, chief merchan-dising officer for the retailer.

“It’s got very strong core items that are unique to the Nautica brand that work for smaller doors but it also has enough fashion and breadth to work in larger flagships. It’s a line that works in many doors in all parts of the country. It used to be mostly Eastern Seaboard, but now it’s strong all over, including the West Coast,” he said.

Gennette recalled that the brand suffered somewhat years back when it became too focused on key items and thus too commodity oriented.

“Under Karen’s leadership, the brand has gone back to its roots and its reason for being,” he explained. “I think the line is looking very fresh and relevant. We just finished a strong year together. I think Karen is one of the smartest leaders of the brands that I do

business with. She is really rooted in great product and she understands the sell-in as well as the sell-through.”

The Nautica customer at Macy’s tends to skew older, with more than 50 percent of sales to consumers ages 40 to 59. The customer base is multi-cultur-al, with brand appeal among African-Americans, Hispanics and Asian-Americans, Gennette pointed out.

Outside of wholesale, Nautica oper-ates 87 outlet stores in the U.S., with that number expected to remain rela-tively stable in the near future.

“We don’t really have plans to grow the outlet business in the U.S.,” said Murray. “If there’s an opportunity here and there in a premium center, we’ll look into it. We want to grow the busi-

ness overall but not necessarily open many more stores.”

The company is planning to go into full-price retail, according to an inter-nal brand overview, but specific details are unavailable at this point.

“I would tell you that we are con-stantly exploring the opportunity do-mestically and we’ll have much more to share with you later this year,” explained Murray, noting that she believes full-price retail would ben-efit the brand. “We are a company that does things methodically, and we want to make sure we’re doing it right. We are doing our due diligence, and we’ll be ready to talk about full-price retail in another quarter or two.”

Nautica previously operated a 14,000-square-foot flagship store at 50 Rockefeller Plaza, which it opened with much fanfare in April 2001 but shuttered in August 2004, following its acquisition by VF. The store was origi-nally expected to ring up sales of $10 million to $12 million in its first year,

but just six months after its debut, Nautica was already reporting full-price selling below expectations.

About 29 percent of total Nautica sales are from international markets, with that number growing from 20 per-cent four years ago.

“I think we should keep growing the international part. The more we can grow overseas the better it is. I would have no problem if it was 50/50,” said Murray. “But before we embark on new territories and spaces, we do con-sumer insight work. Right now we are doing consumer segmentation to help us guide those decisions on which mar-kets to enter.”

China, Latin America and the Middle East are Nautica’s biggest mar-kets around the world, in that order. The company recently entered Russia, Turkey, Brazil and South Korea for the first time. In South Korea, the brand has staked out a more pre-mium positioning with local partner Amanex, with a focus on technical performance wear.

“It’s more elevated performance product than what is in the U.S. They have some of the sportswear from the U.S. but the high-end performance pieces that are $500 and $600 is exclu-sive to Korea now,” Murray pointed out. “None of the product is in the U.S., but there is a conversation about us reverse-selling it here. I think some of these items would do very well online.”

Overseas, there are 62 freestanding Nautica stores in Greater China, 38 in the Middle East, 45 in Southeast Asia, 44 in Mexico and Latin America, 11 in South Korea, two in Australia and two in Europe. The stores are operated by Nautica’s network of 21 international license partners. Wholesale distribu-tion internationally is in about 1,600

department and spe-cialty stores.

In license catego-ries, Nautica has 19 licensees in 58 cat-egories, including: Coty for fragrances; ES Originals for foot-wear; Essex for um-brellas; Fishman and Tobin for children’s apparel; Fownes for cold-weather gear; Levy Group for men’s tailored clothing and topcoats, men’s main-floor outerwear and women’s topcoats; Raj for women’s swim-wear; Marchon for eyewear; PVH for neckwear; Randa for

luggage and backpacks; Royce for ho-siery; S. Cohen for tailored clothing in Canada; Li & Fung for dress shirts; Swank for belts and small leather goods; Timex for watches; Crown Crafts for infant and juvenile bedding; Lifetime Brands for tabletop; Louisville for utility bedding; and Revman for fashion bedding and bath. (For more on licensing, see pages 28-30.)

Annual wholesale sales from all Nautica licensees were approximately $500 million in 2012.

This year, Nautica is relaunching its e-commerce site with a focus on a streamlined shopping experience and richer brand storytelling. The company has set a goal of generating 10 percent of all sales via e-commerce within the next three years. Asked where that fig-ure stood today, Murray responded that it’s “not where we want it to be.”

The company first launched its e-com-merce business at nautica.com in 2008 with a full assortment of men’s, women’s and children’s apparel and accessories.

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Guiding the Growth{Continued from page 4}

Nautica’s 30th anniversary campaign.

C e l e b r a t i n g 3 0 y e a r s o n t h e WATER

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In another relaunch, Nautica is try-ing its hand at women’s sportswear again, following two earlier failed at-tempts. The company already offers some women’s sportswear within its own outlet stores and via international license partners in overseas markets. However, the brand has had difficulty gaining traction in the U.S. wholesale channel in the category.

“It’s a bit of a sore spot as it was launched twice unsuccessfully be-fore,” said Murray. “I think we weren’t priced competitively and the line was the wrong expression of the brand for the female audience — it was boxy and men’s wear-oriented. Today, we are using fluid fabrics that drape like silks and Modals. It’s a big change. Our offering is very feminine. It’s quite sexy and fitted.”

This latest incarnation of women’s sportswear is launching this month at Belk, Dillard’s and Lord & Taylor, with additional stores to come. “It’s product that was available overseas, but we are expanding it for the U.S. market and making it more exten-sive,” said Murray. “It’s important for any successful global brand to have a dual-gender presence.”

The in-house sportswear will join an existing in-house women’s sleep-wear business and licensed women’s outerwear and swimwear. An advertis-ing campaign launches this month to trumpet the reintroduction of Nautica women’s collection sportswear to U.S. department stores.

“We still have work to do to realize the potential in women’s sportswear,” said Wiseman. “We’re moving cautious-ly but deliberately here, but I’m really encouraged by the progress we’re mak-ing and the success we’re seeing.”

While nascent, Nautica women’s sportswear could eventually outsell the men’s business. “At the end of the day, a lot more women’s apparel is sold than men’s in department stores, so I can’t see why that wouldn’t be true for Nautica,” said Murray.

The men’s focus of the brand up until now has stemmed from its roots in outdoor and sports, particularly with connections to the sea. To that end, the company today is the title sponsor of two high-profile triathlons — the Nautica Malibu Triathlon and the Nautica South Beach Triathlon. Since 2009, Nautica has also been the largest single sponsor of Oceana, the ocean conservation organization. In 2012, Nautica became a sponsor of Charity:Water, which raises funds to bring clean drinking water to de-veloping countries and communities. (For more on philanthropic initia-

tives, see page 34.)“One of the brand’s greatest

strengths is providing a consistent image of who the Nautica consumer is, representing their deep connection with the water,” said Wiseman. “The brand has really solidified its position around being a brand for those who live their lives on or near the water, and a big part of that connection with consumers has been forged through our Ocean2Ocean campaign.”

That campaign launched in 2010, with storytelling that found inspira-tion from the people and places along America’s coastlines. “Design and mar-keting teams traveled together — lit-

erally from ocean to ocean — finding unique nautical inspiration,” explained Murray. “The product reflected these discoveries, and marketing focused on real people that are truly living the Nautica life. Their stories were told on-line, in print and through social media.”

Nautica launched an interactive blog called Nautica360 in 2010 and became active on Facebook, Twitter, YouTube and Flickr. The brand now has garnered three million fans on Facebook.

The company conceives and ex-ecutes its advertising campaigns in-house, having exited a relationship with Laird+Partners in 2009.

“Nautica was so focused on ‘man on a boat.’ It was a very lonely guy on a boat. It’s not all the brand is about. We are about families and dual gender and friends and connection,” said Murray, whose in-house team has guided the brand toward imagery of men, women and families together.

As president of the sportswear co-alition, Murray overseas Nautica as

well as the North American business of Kipling, with the latter comprising about one-fifth of the group’s revenues.

“Eric Wiseman has given me a very long leash, but at the end of the day, it’s a financially driven company and we have checks and balances to make sure that I’m doing the right thing,” said Murray. “[We utilize VF’s] corporate resources in the areas of systems and strategy. There is a consumer insights team there, head-ed by Stephen Dull, that helps me make more informed decisions.”

Brands within VF are encouraged to share best practices and innovations with each other.

“We share all the time. I am wel-come to fly out and sit in the fabric de-partment of The North Face or fly up to Timberland and talk about strategy. VF has a huge denim capability, and I can

go down to Lee and talk about a denim process. Conversely, we have a great relationship with Macy’s, so they might want to talk to me about that,” Murray pointed out.

VF holds an annual internal confer-ence dubbed VF Max, staged at locales from the MIT campus in Cambridge, Mass., to New York City, where leaders from the company meet with outside thinkers and innovators. “We’ve had Robert Redford speak to us, and we had Julie Taymor talk about the chal-lenges of staging the Spider-Man mu-sical. It’s about how to solve problems and innovate and do something dif-ferent and unique,” Murray recalled. “Who would think that you could learn something from Spider-Man?”

VF Corp. is known for a research-driven approach to strategic and busi-ness decisions. At Nautica, market-re-search practices are leveraged across the entire spectrum of business process-es, including understanding consumers’ evolving needs, optimizing communica-tions, maximizing the effects of spend-ing and guiding innovation.

This past holiday season, Nautica invested in shoppable billboards at the two New York City airports, John F. Kennedy International and LaGuardia. Shoppers could scan items from the billboard on their smartphones via QR codes, which would bring up the item from the Nautica e-commerce site.

Nautica conducted a consumer inter-cept test to evaluate the performance of the shoppable airport billboards, learning that while consumers were familiar with QR codes, they did not like using them. It turned out the bill-boards did little to drive actual sales, but were highly successful at driving brand awareness and equity.

“This was something we would not have been able to determine from sales data alone,” said Murray.

Other recent research included a listening lab to help guide the redesign of the e-commerce site. This revealed that consumers were surprised at the breadth of offerings and competitive prices on the site. Another shop-along study found that men particularly like mannequins as part of their shopping experience to help them easily figure

out entire outfits.A market-mix analysis showed the

strong benefits and synergy of spend-ing on social and digital marketing in tandem with more traditional adver-tising buys.

“It was fascinating to learn how the multiple consumer touch points really help to strengthen our connection with our consumer,” said Murray.

As a unit of VF, Nautica is part of a diversified portfolio that stretches across outdoor, denim, sportswear, con-temporary, footwear and accessories.

“VF’s overall growth strategy is based on actively managing a highly diversified global portfolio of leading lifestyle brands. Nautica’s diversified product mix and global distribution is perfectly aligned with that strategy. The brand is stronger today than it has ever been and [has] many growth op-portunities,” said Wiseman, who earli-er in his career oversaw Nautica when he held Murray’s current position.

“What stands out was [how] we all felt about bringing Nautica into the VF family of brands and taking it to its next level of growth,” he recalled of his time at the helm of the Nautica business. “Nautica was one of the first acquisitions VF made, once we put into motion our plan to transform the company with the addition of more lifestyle brands, so it really was a milestone for us.”

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Growth is being driven in China and Latin America. Here, a Beijing store and, right, a Panama location.

[Nautica] incorporates the latest design technologies while still staying true to its

roots and maritime heritage.— ERIC WISEMAN, VF CORP.

Guiding the Growth

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Young Man and the Sea Creative director Chris Cox channels his love of the outdoors into Nautica’s lifestyle offerings. By Jean E. Palmieri

CHRIS COX IS passionate about the outdoors. And being Nautica’s vice president of design and creative allows him to indulge that passion every day.

Born and raised in New Jersey, Cox grew up around the water, summering at Long Beach Island, a barrier island off the state’s mainland.

“My brother was a lifeguard and in a band — I worked,” Cox said with a laugh. “But I lived vicariously through him.”

But it wasn’t all work and no play. When he wasn’t toiling away for some extra cash, Cox spent time enjoying the sand and the surf as well, skills he calls upon to create the company’s men’s collections every season.

“I have a really active life outside of the office,” said Cox, who enjoys surf-ing, kayaking, mountain biking, tennis and soccer, among other sports. “And this brand’s large point of differentia-tion is its performance aspects and the fact that it was built around the water.”

The company says its spinnaker logo is “a symbol of adventure, action and classicism.” This unwavering devotion to the water runs deep, and im-pacts everything Cox produces for the label.

He travels fre-quently to coastal lo-cations around the country to keep his finger on the pulse of the Nautica cus-tomer. Those excur-sions have taken him from the Great Lakes to Oregon, New England to Florida and California, and while the communities and climates are differ-ent, there’s a certain commonality.

“I’ve seen a large diver-sity of people, cultures and lifestyles,” he said, “but water is what brings them all together.”

And while he keeps up with the latest fashion trends emerging from the runways of Europe, he finds his travels around the U.S. to be more useful inspira-tions for the Nautica brand because the company’s associa-tion with the water “is such a strong part of who we are.”

While his personal activities are a perfect match for the brand, it was his design talent that appealed to Karen Murray, president of VF’s Sportswear Coalition, which oversees Nautica.

Before joining Nautica five years ago, Cox spent 11 years at Tommy Hilfiger, overseeing every-thing from men’s outerwear, swimwear and bottoms to denim and sportswear. After leaving Hilfiger in 2004, he joined Victorinox as senior vice president of design and creative director.

“Karen went to HR and said she wanted to hire the guy who was design-ing Victorinox,” Cox related. “We had actually had a conversation when I left Tommy so she knew who I was and my career path. So I met with Karen and

everything fell in line.”He came on board as vice presi-

dent of men’s design in February 2008, and later that year was elevated to his current position, succeeding Miriam Lambert.

“It’s been a fun run,” he said. “There have been a lot of challenges and a lot of rewarding moments.”

His primary goal upon joining the company was to reconnect Nautica with its roots and “get back to the core essence” of the brand.

“When I came in, we didn’t really stand for anything anymore,” he said. “We were all over the place and we were chasing something that wasn’t what the brand is all about.”

Cox dove in, researching the history of Nautica and where it had enjoyed the most success over the years.

“I did a ton of brand work,” he said. “I asked, Who do we want to be?”

Answering that question required “focus, belief and great creativity,” he

continued. “You have to believe in who you are, put a stake in the

ground and go for it.”Cox said he’s never felt

restricted by Nautica’s sin-gle-minded mission — in fact, just the opposite.

“When you put blinders on and re-ally focus on the end goal, you can go forward — as long as it goes back to the brand’s point of view,” he said.

That point of view needs to be consistent

across all categories of product that sport the Nautica name. As a re-sult, Cox works with the company’s large

cadre of licensees to ensure that they’re on board with the mission as well.

The design pro-cess starts with the company’s internal

sportswear design team and then Cox “inter-

faces” with the out-side companies that

produce everything from tailored clothing, dress shirts and neck-wear to shoes and cold-weather goods. The larg-est companies

come to Nautica’s office on a quar-terly basis to run

through the color palette and print choices

for the season to ensure everyone is on the same page.

But Nautica’s bread-and-butter is still its men’s collection sportswear, 95 percent of which is designed in-house.

The fall incarnation of the collec-tion will make its debut on the run-way during New York Fashion Week on Friday. Key pieces will include fur-trimmed technical parkas, nautical utility leather jackets, hand-knit cash-mere fisherman sweaters, slim brushed cargos and slim wool knit pants.

As part of the mix, Cox will unveil

the latest pieces of the Black Sail collection, which is the brand’s most elevated product.

“It’s more of our pinnacle line,” Cox explained. “It’s more directional and innovative. It’s our tease about where we believe we can take the brand.”

And this year, its 30th anniversary, Nautica is also offering a series of capsules throughout the year cel-ebrating the milestone. For spring, Cox designed “more modern inter-pretations of vintage sailing pieces,” including waterproof sailing jackets, zip cable shawl cardigans with wind-block linings and full-zip hoodies. And for fall, the celebration will continue with similarly themed pieces.

“The America’s Cup finals will be in San Francisco in September,” Cox said, “so we’ll also be playing off of that.”

But in everything Cox designs, at-tention to detail remains paramount as Nautica seeks to capture “the es-sence of an active, adventurous and spirited lifestyle.”

Cox admitted: “I’m a gear-head. Growing up, I loved to see how things work.” He translates that into his de-signs for Nautica by constantly asking “what’s next, what’s warmer, what’s cooler, what’s drier? I’m driven by that —

whether it’s in hard goods or soft goods.” So which items does Cox believe

have been his most iconic during his tenure at Nautica?

“I’m a giant turtleneck fan,” he said. “And this fall, we’ll be celebrating the fisherman’s sweater.”

In addition, he pointed to the down parkas with fur trim and “detailed bot-toms with a great wash,” as key. “And pant fit is really important to me.”

Cox said the sportswear design team creates a collection every year that is “so vast, it’s hard to pick one thing. In any given quarter, there are 800 to 1,000 sku’s and we manage three seasons at once.”

He said such a work load would be impossible without the help of a strong technical and product-devel-opment team. And each of the com-pany’s designers, some of whom have been with the brand since founder David Chu was still on board, is re-sponsible for all the technical bells and whistles on each garment they create. “We don’t just design it and hand it off,” he said. “We control ev-erything about it, including making sure it’s [priced] properly. Owning the details is very important — today’s consumer expects so much.”

Chris Cox oversees all of the men’s design

for the brand.

Two of Cox’s

favorite jackets. PH

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DAVID CHU always had an affinity for the water. And it was this love of the ocean that prompted the designer and entrepreneur to create the Nautica label in 1983.

“I used to travel to the islands and loved being on the beach in St. Maarten and the Bahamas,” Chu said in a recent interview at his town house in New York’s Flatiron District. “I found the island life cool and relaxing and being around the ocean was magnificent.”

Even so, the idea of creating a nautical-themed apparel brand was the furthest thing from his mind grow-ing up. In fact, Chu, who was born in Taiwan and immigrated to the U.S. at age 13, had designs on being an archi-tect, not a designer.

“I went to FIT, but I didn’t know I’d be in the fashion industry,” he said. “I actually studied design by accident. I thought I’d be an architect or in sales and marketing. But I took an illustra-tion class one summer and found my-self in fashion design.”

After he graduated from college with a degree in fashion design, Chu traveled back to Taiwan and launched an apparel business with friends, “but it failed miserably,” he recalled with a laugh. “But I’m glad I failed early. It’s better to fail when you’re 23 and young and stupid than at 35 or 40.”

Chu returned to the States and joined Kayser-Roth for five years. Then, in 1983, his entrepreneurial spirit surfaced and Chu whipped up a small collection of six color-ful men’s jackets that incorporated fashion and function. This collec-tion spawned a new business that he named Nautica, after the Latin word “nauticus,” for “nautical.”

“I was 28 when I started Nautica,” said Chu, now 58. “It started with a sail-away jacket and was fine-tuned over the years. It resonated with a lot of people.” In its first year, he said, Bloomingdale’s, Barneys New York and Saks Fifth Avenue carried the col-lection along with such high-end spe-cialty stores as Mark Shale, Roots and Capper & Capper.

“When we started, there were 80 de-partment store chains,” Chu said wist-fully. “Now there are four. And we were also selling to a few hundred really good specialty stores.”

The company had sales of $700,000 in its first year and $2.5 million the fol-lowing year, the same year it caught the

attention of State-O-Maine, a publicly traded sleepwear firm. In his bid to expand his fledging brand, Chu part-nered with the larger company and with State-O-Maine’s Harvey Sanders serving as chief executive, a plan was put into motion that took Nautica into various product categories including sportswear, activewear and women’s wear as well as retail.

Nautica in-store shops were in-stalled at department stores around the country and the brand sponsored sail-ing competitions and opened a fancy showroom on 57th Street in New York.

With the Nautica label accounting for the majority of State-O-Maine’s sales, the company was renamed Nautica Enterprises in 1994. At the height of its popularity, worldwide sales were more than $1 billion, and there were some 1,500 in-store shops around the country, as well as more than 100 of its own stores. The brand’s name was found on everything from neckwear to fragrance, and along with Tommy Hilfiger and Polo Ralph Lauren, Nautica rode the American sportswear wave that was sweeping the U.S. at that time.

In 2003, VF Corp. — which had been thwarted in its attempt to buy Calvin Klein — bought the brand for $600 mil-lion in cash. Chu pocketed a windfall of more than $104 million and stayed on with VF to oversee global design, product development and marketing for the label.

He remained for a little over a year “to transition the business,” he said, before exiting to search for his next chapter.

“VF’s strategy was an investment strategy,” he said. “And they didn’t think they needed any more of my input. So I moved on. Life is a series of different adventures.”

The first adventure was to cre-ate a new company, DC Design International, to market an upscale men’s designer collection label. At one point, he was designing both a tailored-driven David Chu line and a sportswear collection under the Lincs by David Chu name. The two lines were merged in 2008. He also has a David Chu Bespoke line of luxury made-to-measure men’s wear that he offers from the top floor of his historic brick town house in Manhattan.

Chu also flexed the creative side of his personality by buying an equity

stake in Tumi, the luggage and accesso-ries brand, and joining the company as executive creative director. He worked with Tumi for around two years and also acquired Mallory & Church, a lux-ury accessories firm.

Most recently, Chu teamed with Investcorp to acquire Georg Jensen, a Scandinavian luxury brand that is best known for its high-end silver but also manufactures jewelry, watches and high-end home goods. It was founded in 1904 and operates nearly 100 stores around the world but has limited distri-bution in the U.S.

Leafing through a coffee-table book of Jensen’s silver products, Chu, who was named the company’s chief cre-

ative director and cochairman of the board, said he was looking forward to doing “something that I’ve never done before. We can take this com-pany global. Its penetration in North America and Asia is low. China is a potentially big market and we’re [en-thusiastic] about the opportunities in North America.”

Among his goals for Jensen is to expand its men’s wear offerings. “We have a watch collection but we’re looking to launch men’s accessories,” he revealed.

He said he’s eager to “take my taste and sensibility and reposition the brand to be more successful. It’s an in-teresting challenge for me.”

Although he may be older and a little grayer, Chu’s creative mind-set hasn’t really changed since he con-ceived of Nautica three decades ago.

Looking back at the brand, Chu said he is “not surprised” that Nautica has remained so popular.

“Once you hit a certain size, you have longevity,” he said. “There’s a value and perception in consumers’ minds about what Nautica stands for, and that will be around for a long, long time.”

He admits that he doesn’t really keep up with what the brand is doing, although he said current Nautica de-signer Chris Cox “is a good guy and has good taste.”

But although he has distanced him-self from Nautica, it will always be a big part of who he is. “Nautica was great and a lot of fun,” he said. “Life’s been good to me.”

12

David Chu: Then and NowNautica’s founder reflects on the brand’s roots and looks ahead to his latest challenge. By Jean E. Palmieri

David Chu photographed last month at

his Manhattan town house.

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Looks from 1993...

...and 1998.

...1996...

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SMOOTH SAILINGPolyester jackets, cotton pants and aviator sunglasses.

PHOTOS BY ELI SCHMIDT

WWD.COM

15WWD THURSDAY, FEBRUARY 7, 2013

Wool blazer, nylon jacket, cotton and nylon pants.

Over the last 30 years, Nautica has evolved into an American lifestyle brand featuring bright performance outerwear, playful sportswear, sleek tailored clothing, timeless dress furnishings and modern accessories.

— ALEX BADIA

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Polyester vest, Sorona shape polyester memory jacket, cotton shirt and silk tie. Tie bar from Thetiebar.com.

SMOOTH SAILING

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Cotton blazer, cotton piqué polo shirt and cotton and elastane skirt.

SMOOTH SAILING

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Polyester and nylon jacket, wool cardigan, cotton and Lycra spandex poplin shirt, nylon active pants and high-top sneakers.

SMOOTH SAILING

NAUTICA

Congratulations

ICONIC STYLE

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Cotton and linen jacket, cotton denim jacket and jeans, cotton and spandex maillot.

SMOOTH SAILING

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Leather jacket, nylon active pants, Sorona shape polyester memory shorts, Nautica Zhik hat, multifunction resin-strap watch.

SMOOTH SAILING

CONGRATULATES

YEARS ON THE WATER

CELEBRATING

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Polyester jacket, cotton and linen shirt, polyester shorts and knit tie. Tie bar from Thetiebar.com.

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Licensing: Pump Up the VolumeNautica’s 58 categories of product account for more than $500 million in annual sales. By Jean E. Palmieri

FROM UMBRELLAS and beach towels to footwear and fashion bedding, and from Europe to Asia to South America, Nautica’s reach is far and wide.

And overseeing the massive international effort is Maria Vicari, president of global li-censing for the brand.

An eight-year veteran of the company, Vicari has an in-dustry pedigree that includes 20 years with GFT working on Ungaro, Valentino and Joseph Abboud, as well as a stint at Saks Fifth Avenue work-ing with then-men’s general merchandise manager Roger Farah, who is now president of Ralph Lauren.

When Vicari joined Nautica, the licensing pro-gram was already established. In fact, the brand has had in-ternational licenses in Canada and Mexico — “above and below the border,” as she puts it — for 29 years.

But under her tutelage, the company’s licensing arm has grown substantially, and today there are 40 operators domesti-cally and abroad, overseeing 59 categories of product that ac-count for annual sales of more than $500 million.

“Licensing is a big source of revenue and a brand-build-ing component,” Vicari said. “It’s a big endeavor.”

The business is broken down into two distinct catego-ries: domestic licensed prod-uct and international licens-ing, she explained.

The domestic products are those that are “noncore com-petencies” for Nautica, like luggage and tabletop. The most successful in terms of volume are watches, fragrance, chil-

dren’s wear and home prod-ucts, Vicari said.

The international arm, which includes distributors, counts 22 operators in almost 75 countries. These partners operate some 200 freestanding Nautica stores as well as 1,000 in-store shops.

Vicari noted that Timex, Coty and Marchon, its watch, fragrance and eyewear licens-ees, respectively, hold global licenses for the brand and sell the Nautica product around the world.

In the States, Nautica is primarily a men’s brand with women’s sportswear slated to launch here for spring under the direction of the in-house Nautica team. But overseas, she pointed out, most of the partners “operate a dual-gen-der platform.” The largest in-ternational market is Greater China, which accounts for 27 percent of total sales. There are 366 points of sale there, including freestanding stores as well as in-store shops in department stores like Isetan, Parkson, Sogo, New World, Mitsukoshi and Takishimaya. There are nine Nautica Kids stores in China and Vicari said there is “potential for growth there.”

Other large international markets include Mexico and

Latin America, which have more than 300 points of sale. Product categories sold in those countries include wom-en’s, home furnishings and children’s in addition to men’s wear. The Middle East boasts freestanding men’s, women’s and children’s stores in Dubai, Abu Dhabi, Kuwait, Qatar, Saudi Arabia and Israel.

There are no longer any full-price Nautica retail out-posts in the U.S., although Vicari said it is definitely in the company’s sights.

“We’re working on it,” she said. “It’ll be one of our strate-gies going forward.”

With such a wide-ranging network, Vicari categorized Nautica’s licensing efforts as “a mature business.” And with rare exceptions, there aren’t a lot of other categories where Nautica hopes to plant stakes. “I get calls all day long with some of the most bizarre re-quests,” she said, shaking her head. “But we have specific guardrails and guidelines [for what products we’ll put the Nautica name on], and we con-sider if it will be brand-equity building. We also look at the kinds of distribution it would get and whether it would en-hance the brand experience with the consumer. If the an-swers to those questions are

not ‘Yes,’ we won’t consider the category.”

And, she added with a laugh, “We’re very control-ling. It’s not easy being our li-censee. We control every part

of the contract negotiation and compliance.”

When deciding whether to enter a category, Vicari said the company “discerns what’s

{Continued on page 30}

The unaided awareness of the brand is astounding. There are very few markets where we’re not known.

— MARIA VICARI

Domestic LicensesFragrance: CotyFootwear: ES OriginalsUmbrellas: EssexBoys’ and girls’ apparel: Fishman Tobin Cold-weather gear: FownesMen’s main floor outerwear: Levy GroupMen’s tailored clothing: Levy GroupWomen’s topcoats: Levy GroupWomen’s swimwear: RajEyewear: MarchonNeckwear: PVHLuggage and backpacks: RandaSocks: RoyceTailored clothing in Canada: S. CohenDress shirts: Li & FungBelts and small leather goods: SwankWatches: TimexInfant and juvenile bedding: Crown CraftsTabletop: LifetimeUtility bedding: LouisvilleFashion bedding and bath in U.S. and Mexico: Revman

International Licenses338: China and Hong KongAmanex: KoreaArvind Lifestyles: IndiaBez Trading: Footwear in Mexico and South AmericaCentral Trading: ThailandDayan: Apparel and accessories in Mexico and South AmericaDebenhams: U.K.La Compagnie del Pelle: Italy, Switzerland and AustriaLF Asia: Children’s wear in ChinaLiwa: Middle EastMontgar: ChileNotos: Greece and CyprusPacific Classic: Children’s wear in TaiwanPlanet Sports: Philippines and VietnamPT Mitra: IndonesiaRoyal Sporting House: Singapore and MalaysiaRuentex: TaiwanSBN Clothing: IsraelSiga: CanadaTrue Alliance: Australia

Fashion bedding in the U.S. and Mexico is licensed to Revman.

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CONGRATULATIONS NAUTICA!30 YEARS OF REFRESHINGLY UNIQUE AND EXCITING MODERN CLASSIC SPORTSWEAR.

YOUR PARTNER FROM THE BEGINNING,

We look forward to many future milestones together

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worth the effort. If it’s small, it won’t have a future. And it also has to be nothing that would be brand-eroding.”

That said, however, bags and foot-wear are two product categories where “enhancements are up for con-sideration,” Vicari said. “But with the exception of women’s accessories, we’re pretty much there.”

So instead of entering a lot of new categories, the “strategy for the next five years,” she said, is for “organic growth and international expansion.”

The plan is to concentrate on emerg-ing markets and Nautica is expected to reveal shortly that it has lined up a partner in Russia. Turkey and Brazil are also seen as key growth opportunities for the brand and the company recently started a full-price business in India.

In the third quarter of 2012, Nautica signed a deal with Amanex for the manufacture and distribution of a performance lifestyle collection available exclusively in Korea. The collection includes men’s and wom-en’s performance apparel and ac-cessories, including backpacks, socks, hats, gloves, underwear and scarves. The items are designed to be functional with water-resistant quali-ties and technical fabrics. The plan is to open between 75 and 100 Nautica accounts by 2016 with distribution in in-store shops in department stores and freestanding Nautica units.

This deal is a “pioneering” one for Nautica, Vicari said, since it focuses on one particular product category — performance apparel. “Our positioning there is unique,” she said, noting that the products offered in that country center around “water and lifestyle” and have been received well.

Outerwear is also expected to be a big business there. “Korea is a very outerwear-centric market,” she added.

Vicari said that when it comes to licensing, one size doesn’t fit all, particularly out-side the U.S. borders.

“The model is different, de-pending upon the country,” she

explained. “A lot of countries don’t have department stores, so we’ll have more distribution in independent spe-cialty stores.”

As a result of its breadth of product and distribution network, the Nautica brand is “incredibly well-known out-side this country,” Vicari said. “The unaided awareness of the brand is astounding. There are very few mar-kets where we’re not known. And the reception to the brand is very strong.”

She said with some exceptions for local variances, the product that is sold overseas is the same as that of-fered in the U.S.

As a result, it is imperative that all product sporting the Nautica name be consistent in terms of seasonal fashion trends.

“Our product development team works with [creative director] Chris Cox to ensure the brand direction is articulated each season,” she said,

adding that “they control the approval process, which is very involved.”

Licensees are invited to the com-pany’s showroom to see the season’s fashion focus and work with the de-sign team to brainstorm on how best to translate the trends into their par-ticular product categories. So when customers buy anything from a pair of shoes to a suit or even sheets for their children, they can be assured it got the nod from the top.

{Continued from page 28}

Pump Up the Volume

Nautica signed a license with Korea’s Amanex for special product and retail. Here, the store in Seoul.

Braided belt by Swank.

Boat shoes are licensed to ES Originals.

Watch from Timex.

Ties are licensed to

PVH.

Translucent sunglasses are

by Marchon.

Aqua Rush by Nautica fragrance from Coty.

CONGRATULATIONS!FOR 30 YEARSOF FASHIONEXCELLENCE

3200 Northline Avenue, Suite 360 Greensboro, NC 27408 tangeroutlet.com NYSE:SKT

THINK OUTLETS. THINK TANGER.

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EXACTLY THREE years ago, Nautica hit the digital scene, and during the first week of February, the brand reached three million fol-lowers on Facebook.

Besides the social media platform having the most fans and highest lev-els of engagement, Facebook drives more traffic to nautica.com than any of its peers, according to Rosalind Drisko, director of marketing and com-munications at Nautica.

“We could have 150,000 people talk-ing about an item, and when the brand posts something, there can be thousands of likes. We get a lot of insights,” Drisko said, noting that the most popular posts on Facebook are about timepieces. “With watches, it’s a very in-ternational audience, and we see a lot of in-teraction here.”

Behind-the-scenes content — like photos of shows and models — also resonates well with users, and Drisko calls Facebook the “perfect medium” in which to showcase these images.

Nautica saw sig-nificant growth on this channel from 2011 to 2012, going from 550,627 fans in 2011 to 2.7 mil-lion just one year later. Last June, the brand toasted reaching 1 million followers with its Nautica Millionth Fan initiative. A Facebook follower designated as the millionth fan at-tended the spring 2013 fashion pre-sentation in New York.

In 2010, the brand launched its Nautica 360 blog, as well as accounts

on Twitter, YouTube and Flickr, fol-lowed by Instagram and Pinterest last August.

And as successful as the brand has been thus far on Facebook, Drisko ac-knowledges that Twitter has been a “bit of a challenge” for the brand.

“A lot of people use Twitter to fol-low celebrities or news outlets and, for us, it’s a bit challenging unless we’re doing a lot of promotions. People usu-ally want a promotion for something

off, which we don’t tend to do on Twitter,” Drisko said.

She revealed that the brand plans a total overhaul of its digital flagship in the coming months — and while small updates were made to nautica.com last year, the site will look com-pletely different come summer.

In addition to enhanced naviga-tion, search and filtering capabilities, the site will contain user reviews and recommendations (a feature not currently available on nautica.com). There will be more of an assortment

of product spanning all categories, including men’s, women’s, kids and home, as well as licensed products like watches, eyewear, footwear, women’s swimwear, leather goods, bath accessories and fragrance.

“Product presentation will be bet-ter and, in general, [we will] better integrate the brand experience with the shopping experience. [This will allow] more of an in-tegration of content and com-

merce,” Drisko said.She added that cur-

rently, nautica.com only ships to U.S. addresses, but there are plans to change this.

Nautica launched e-commerce in 2008, and that channel is growing rapidly. Although Drisko de-clined to reveal the percentage e-commerce generates of overall sales, electronic volume increased 50 percent be-tween 2011 and 2012. She projects the same growth curve for 2013.

Mobile traffic tripled and mobile sales doubled from 2011 to 2012, with the chan-

nel representing 10 percent of all e-commerce sales last year. The company only expects this number to grow, especially since 40 percent of Nautica’s e-mails are opened on a mobile device.

A stand-alone mobile app doesn’t exist yet, but about 10 apps have been created on a project basis since 2010,

ranging from holiday gift lists to back-to-school bedroom makeovers. The company sponsored a contest (which ended last month) in which one win-ner will have the opportunity to star in an upcoming Nautica Ocean to Ocean campaign video. Drisko said the winner will be announced within

a couple of weeks.When asked what has been

the biggest challenge with re-spect to digital for the brand

thus far, Drisko pointed to two elements.

The first is adapting to the speed at which

technology is chang-ing. She cited as an

example the rapid pace at which Instagram has be-come one of the most

popular social plat-forms in the past year.

“This is the place to be, and that’s the one that

we’re going to see grow the fastest. Instagram is where

we’re trying to do more and more,” she said.

The second is divvying up re-sources for digital responsibilities.

“Allocating new resources toward digital becomes an additional part of someone’s job, whereas it should have its own team,” she said. A so-cial media manager and digi-

tal manager work closely with the e-commerce team, but the brand is looking to increase the size of this group. “At Nautica, we’re currently building a full team.”

32

A holiday Instagram promotion.Nautica’s Facebook page has more than three million fans.

The homepage at nautica.com.

Watches attract the

most comments on Nautica’s

Facebook page.

Clicking Away Digital is experiencing

rapid growth in sales, traffic and fans.

By Rachel Strugatz

The blog on Nautica’s site.

Congratulations on 30 Years of Nautical Style and Inspiration

Ce leb r a t i n g ye a r s o n t he WATER

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TO SAY THAT Nautica cares about the environment would be just skimming the surface. Case in point: the company’s mantra, which is “We cel-ebrate, love and respect the

water, everywhere, every day.” The apparel brand adopted

this mission statement in 2009, after years of philanthropic work lacking “an overarch-ing platform,” according to

Rosalind Drisko, director of marketing communications.

So Nautica teamed with Oceana, the largest interna-tional organization focused solely on ocean conserva-tion. Based on similar objec-tives to save and protect the world’s oceans, Oceana was an obvious match for Nautica’s aquatic focus, resulting in a productive partnership that has continued for the past three years. The brand is cur-rently the organization’s larg-est corporate sponsor, joining other donors including La Mer, Christie’s and Burgess.

Besides financial support, Nautica also supports the or-ganization’s efforts with elbow grease. On World Oceans Day, for example, Nautica sends 80 employees to help pick up trash along the Hudson River near its Manhattan headquar-ters. For those who cannot attend — the number of vol-unteers is capped each year due to limited resources — the company holds events in New York and Los Angeles to help bring awareness to the cause.

In January 2012, Nautica expanded its charitable efforts

to another aquatic-themed organization, pairing with Charity: Water, a nonprofit group dedicated to bringing clean and safe drinking water to developing nations.

Within this new collabo-ration, Nautica introduced its “Give Change to Make Change” campaign, allowing customers at the brand’s out-let stores to round up their purchases to the nearest dol-lar, with the extra pennies do-nated to Charity: Water. Since the program was unveiled in March 2012, funds have reached more than double the initial goal.

“Our initial goal was $150,000,” said Drisko. “Then we got to a point where we moved it up to $250,000. It ended up com-ing in at about $375,000.”

Nautica currently supports two countries, Nepal and India, through Charity: Water, providing safe drinking water to needy communities through the installation of sanitary water taps and wells.

Despite its more recent dedication to water-themed charities, the company has not turned its back on other

causes it has supported in years past. In 2008, the brand began the Nautica South Beach Triathlon, held every April to benefit St. Jude’s Children’s Research Hospital.

For the past 25 years, it has also been a part of the annual Nautica Malibu Triathlon, which benefits pediatric cancer research at Children’s Hospital Los Angeles. Celebrities who have participated in the races include Jennifer Lopez, Matthew McConaughey, Jon Cryer and Tom Cruise.

“It started as a small event, and over time it’s grown to be massive,” Drisko said of the Malibu event. “This past year, we raised $1.2 million in that one day. [That’s] really amazing.”

Actor Josh Hopkins (“Cougar Town”) at the Malibu triathalon.

Morgan Freeman and Ted Danson at an Oceana event.

Making Every Drop CountNautica puts water in the forefront of its philanthropic efforts, partnering with organizations such as Oceana and Charity: Water. By Lauren McCarthy

LEACHENG APPAREL CO., LTD.

on 30 Years of Innovation

Congratulates

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