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J Brand Exits Wholesale to Focus on Direct Distribution

Rivet's 2020 Denim Circularity report takes a deep dive into how the global denim industry is plotting its circular future amidst a worldwide pandemic.

J Brand could be the firebrand that begins fashion’s exodus from wholesale distribution.

On Wednesday, J Brand parent company Fast Retailing Group announced a strategic plan to “rearticulate” the premium denim brand’s business model and shift its direction toward direct distribution.

The move will begin with the Summer 2021 collection, which will be distributed exclusively through direct-to-consumer channels operated by Fast Retailing, such as J Brand’s e-commerce platform.

Los Angeles-based J Brand is currently sold by high-end retailers such as Bloomingdale’s, Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman in the U.S. and Selfridges, Browns and Harrods in the U.K. It is also sold by online retailers like Net-a-Porter and Shopbop.

J Brand’s breakup from its wholesale partners might be a case of, “It’s not you, it’s me.”

Kazumi Yanai, J Brand, Inc. chairman and Fast Retailing group senior executive officer, said the label’s current business model is not aligned with the vision the company has for its future success. Fast Retailing brands like Uniqlo have enjoyed building their own model based on developing proprietary fabric innovations and communicating those product stories directly to the consumer.

“This change in direction will bring energy and focus back to a celebrated denim brand in what has become an increasingly saturated marketplace,” Yanai said.

The move from a wholesale distribution to direct-to-consumer (D2C) distribution, however, has been echoed across the apparel industry this year as department stores and shopping malls see their foot traffic wane, but not to the same degree as J Brand’s clean-cut decision.

Indeed, J Brand’s contemporaries are experimenting with D2C distribution channels. Frame recently increased its physical footprint by opening up new brand stores in affluent neighborhoods, while Levi’s readied itself for a sharp spike in D2C online sales this year by retrofitting stores as mini distribution centers.

The Fast Retailing Jeans Innovation Center (JIC) in Los Angeles, however, has been a major point of distinction for J Brand. Since opening in 2016, the center has focused on innovating sustainable, “next-generation denim development” and supports denim production for Fast Retailing brands globally, including the future J Brand assortment.

Agility is undoubtedly a hot commodity in 2020 as trends and markets fluctuate. As a consequence of the change in business strategy, the current J Brand workforce will be reduced in the coming months in proportion to the needs of a redefined corporate structure.

“The reality of the denim market today and our ability to figure in it significantly depends on our ability to react and adapt quickly—not only to the marketplace, but also to the changing needs of our customers,” Yanai said. “Ultimately, I believe J Brand will be best served by a streamlined operation, a sharper distribution network and a greater focus on the dynamic lifestyle of the end customer.”

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