True Religion Expands Its Vision for Growth
True Religion is known for its top-end denim jeans and their distinctive pocket stitching and seams, which set them apart from other premium-denim lines.
But the company is not relying on just blue jeans to fuel the financial flames.
This year it hopes to expand considerably on its sportswear offerings, beef up its retail store lineup by nearly 50 percent, grow its handbag line, and launch a men’s and women’s fragrance line this fall.
“As I have always said, it is all about the product,” said Jeff Lubell, the company’s founder, chairman and chief executive. Lubell was commenting on the Los Angeles company’s direction in a conference call May 8 about True Religion’s first-quarter financial results.
Even though the U.S. economy is mired in financial quicksand, True Religion’s first-quarter net sales were up 47.4 percent to $53.4 million. Net profits climbed nearly 33 percent to $6.9 million compared with a year earlier.
Founded in late 2002, the blue-jeans company has grown steadily every year. Its major clients, such as Nordstrom and Bloomingdale’s, have had no problem selling customers on the idea of paying $172 to $306 for a pair of jeans.
But in 2005, True Religion decided to launch its own stores, with the first shop opening in the seaside community of Manhattan Beach, Calif. The retail chain concept has helped the company with its growth. It now has 25 stores. Another 10 stores will be added by the end of this year, and the company is looking at franchise stores in places such as Mexico, Hong Kong and Dubai. At True Religion’s outlets, the average sales transaction is $192, according to company executives. “The stores provide an excellent testing ground for our products,” Lubell said.
This fall, True Religion will be introducing new fragrances with a Western theme. The men’s cologne is called “Midnight Rider,” and the women’s perfume is named “Purple Sage.” They will be sold at department stores and True Religion’s own outlets.
The company is also expanding its sportswear collection to diversify because denim sales now make up 72 percent of revenues. “Building sportswear is a major focus in the latter half of 2008,” said True Religion President Michael Buckley, who previously worked for Diesel USA, the Italian denim line, and the North American division of the Ben Sherman Group, the British apparel and footwear company.
In the sportswear arena, the company has introduced women’s velour track suits, jackets, skirts, sweaters, corduroy pants in different colors, and Western-inspired men’s and women’s shirts. Women’s stretch velvet pants are also a new addition.
For 2008, company executives upped their revenue expectations. They predict net sales to be between $220 million and $225 million, instead of the previous forecast of $210 million to $215 million. In 2007, True Religion had a $27.84 million profit on $173.26 million in revenues. —Deborah Belgum
