Samsung Looks West
South Korean giant is California dreamin’ about introducing new labels
When the giant South Korean firm Samsung decided to explore the California market for some of its fashion brands, it flew two of its executives to the heart of the Los Angeles Fashion District to get the lowdown on the local apparel industry.
With a combined revenue of $159 billion, Samsung Group has its hands in many industries, including everything from electronics to financial services. Textiles and fashion fall under the company’s Samsung Chiel Industries division.
Cari Redington and Lyra Jakabhazy, two young women with newly minted master’s degrees in business administration from U.S. universities, know little about the fashion world, but their job is to help Samsung Cheil Industries launch some tried-and- true Korean brands in the United States. First stop is the lucrative California marketplace.
The two Americans weren’t quite sure where to begin with this fashion expansion plan. Then last August, they ventured to Las Vegas to wade through the booths and stalls that make up the huge MAGIC Marketplace trade show, where all things apparel happen. It was there they wandered into a “Starting Your Own Apparel Business” seminar given by Frances Harder, president and executive director of Los Angeles–based Fashion Business Inc., the nonprofit group that helps young apparel firms and designers get started.
Months later, Redington, a global strategist with Samsung Cheil, and Jakabhazy, a strategic-planning manager for the company, were e-mailing Harder from their offices in Seoul, asking if she could arrange for a two-day crash course with a number of Los Angeles apparel experts at FBI’s headquarters in The New Mart building.
Harder flipped through her hefty Rolodex and called various Los Angeles apparel experts to see if they were interested in sharing their decades of wisdom with the two recent graduates.
“For them to get into the American market is very tough,” Harder said, noting that Samsung isn’t familiar with the way California consumers think or what trends they follow.
This is not the first time Harder and her group have helped giant apparel companies grow. Recently, the multimillion-dollar apparel maker Kellwood Co., based in St. Louis but with a major design office in City of Industry, Calif., enrolled 39 designers in a crash course at FBI on Adobe Illustrator. Kellwood’s design-process manager, Mary Pintarelli, wanted to improve the design group’s efficiency by having everyone trained on the same system.
FBI also holds a series of evening classes helping budding apparel companies learn about a variety of subjects, from retail mathematics to marketing strategies.
From her long list of seminar teachers, Harder arranged for a slew of people to give the Samsung women mini-courses in late March on the California apparel industry. Richard Price, president of S.M.U., a Los Angeles consultancy, taught them the ins and outs of sourcing and gave them some perspective on pricing. Samsung’s goal is to take its labels—including Bean Pole, Galaxy, Rogatis and the premium-suit brand Lansmere, which have sold well in Asia— and bring them to the United States. They also are working with a successful South Korean designer to bring his name and clothing to the United States.
“What I gave them was where and how to find the best sources for making things,” Price said, noting that even South Korean companies find it too expensive to manufacture clothes in their own country. He also advised them to keep their designer labels away from designer-style prices. “The designer they are working with in Korea is a couture designer. I said they should put his goods into a price range consumers will understand, not $1,000 for a pair of pants,” Price said. “I told them that $120 is a good place for a pant, $140 for a jacket and $80 for a blouse.”
He suggested the pair set up a sample room with goods made locally and then source around the world. “They were like sponges. They took everything in,” he noted. Debra Stevenson, president of The Skyline Studios, a brand-development consultancy in Los Angeles, gave them a seminar on using global trends to market and sell brands. “We looked at the strategy for tracking and understanding both global and local trends so they could think like a huge global brand and also think about the localized market,” said Stevenson, who studies market shifts and trends. “They are thinking about entering on the West Coast and how trends [in Korea and the United States] could be similar and different and what they could do to enhance the brands they are thinking of launching.”
Samsung is hoping to launch brands that will be in the market for a long time. “We talked about how even a remerchandising strategy could be important for them, to look at their product line and see how they could remerchandise, readapt and restyle their line to be more responsive to our trends so they resonate with the way we dress on the West Coast,” she added.
From Bruce Berton—who started his apparel career as a teen-ager cutting men’s suits on the floor of his father’s shop and is now director of international business consulting at Los Angeles accounting firm Stonefield Josephson—the two learned the fine points of the retail industry. “I told them how retail works, from the buyers to the divisional retail managers to the general merchandise managers and how there are designer stores within a store,” Berton said. “They have a hot designer in Korea who is very well-accepted in the Korean marketplace. They want to bring him to the United States and sell his line under his label to all the better specialty and department stores in the United States.”
Jakabhazy, who received her master’s degree in business administration in 2005 from the University of Chicago, said she and her colleague got an excellent overview of the steps needed to bring a brand to the United States. “It surprised me to learn how critical a hub Los Angeles is for the U.S. apparel industry. The fashion design talent originating from Los Angeles is known the world over,” she said in an e-mail sent from overseas. “However, exploring the value chain further, we realized the scale of local manufacturing, the dominance of the major fashion marts to wholesale apparel, and how critical a port Los Angeles is in volume terms for the U.S. apparel imports and exports.”
The young marketing expert said Samsung has not formally established U.S. plans for the Korean brands, but when the company is ready, it knows where to start.
