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Kohl’s Reintroduces Sonoma Brand

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Kohl’s is keenly following in the footsteps of its department-store rivals and has shifted its focus to in-house brands. Chiefly: Sonoma, the private label it first introduced to shoppers 22 years ago.

Fortune reported Thursday that the apparel and home goods line, which accounts for more than $1 billion in sales annually for the retailer, has relaunched with less product and more frequent collections in an effort to compete with European fashion chains H&M and Zara.

“Over the years, we were looking at it as different categories within Sonoma, like women’s, men’s and home items, rather than as a true brand,” Michael Gilbert, executive vice president of product development for Kohl’s, told Fortune, describing how the brand had lost its way over the years. “We knew that Sonoma was a vehicle we needed to re-imagine.”

So the retailer hired New York-based branding consultancy Graj and Gustavsen—which has worked with the likes of Brooks Brothers—in 2014 to give the brand a boost. Now, Sonoma is back, but with a tighter selection of everyday basics made with better materials and washes.

It’s all part of the company’s plan to stay relevant and win back market share, something it desperately needs to do after reporting a measly 0.4% increase in same-store sales in the most recent quarter. And while national brands like Nike, Levi’s, Carter’s and Fila are among the retailer’s strongest performers, private-label sales are at a standstill. That’s a problem, because in-house lines carry higher profit margins. For the year ended Jan. 30, Kohl’s net income was down from $867 million to $673 million.

“The health of our private brands is critical to our success,” Michelle Gass, chief merchandising and customer officer, said. “Given that [Sonoma] is our largest brand, it touches the most categories than any other brand; it has big implications.”

Rather than releasing collections on a seasonal basis, Fortune said that Sonoma will have shorter lead times and merchandising decisions will be made on a monthly basis, something the retailer is hoping will lead to less markdowns and help protect profit margins.

“It should be the crown jewel of our company,” Gass added.

Earlier this year, J.C. Penney announced plans to roll out Belle + Sky (the private-label women’s line it started piloting last September) to 500 more stores. The trendy, quick-turn brand was Penney’s bid to bring back business lost to fast-fashion chains. Last month, CEO Marvin Ellison said the retailer would leverage key private and exclusive brands, like St. John’s Bay, Royal Velvet and Ambrielle, going forward.

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