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The Business

Branding carelessly cool clothing

Pavel Selepčíny, the 32-year-old co-owner of an emerging line of sports clothing, sits at a conference table in a softly lit showroom, surrounded by racks laden with a fresh batch of winter ski jackets, and attempts to define the spirit of his Envy brand — young, independent-minded, active yet carelessly cool.

Envy’s parent company, the Ostrava-based Moravia Sport Group, entered the market in 1995, looking to join the clothing-brand boom of the past five years. But gaining a foothold in a highly competitive market is a struggle to find the right strategy.

Finding a niche
Envy’s summer and winter collections fill a niche between sports and fashion. The fusion results in trendy lines of ski and snowboard jackets and pants, as well as casual tees, bikinis and shorts for the summer collection. The designs closely follow hot trends, which often arrive in the rather conservative Czech market after a two-year delay.
Last season, Envy’s billboard campaign was aimed at twenty-somethings, but the prices of its ski jackets — between Kč 3,500 and Kč 10,000 — better matched the pocketbooks of Czechs a decade older. “We commissioned a marketing study,” Selepčíny said. “The core customers were 30-plus [years old].”
Spreading one of Envy’s 2004/ 2005 season top-price men’s ski jackets on a table, Selepčíny enthusiastically pointed out a variety of smart features, such as sleeves pre-shaped at the elbows, special pockets and soft material on the collar’s lining that will not scratch a skier’s frozen face.
These little details caught the attention of Jindřiška Dandová, an apparel buyer for the Sportisimo chain. But Dandová said last winter’s Envy sales at Sportisimo were low compared to those of its main competitors, Hannah and Loap.
One reason for this may have been price. Unlike other suppliers, which usually allow a 50 percent markup, the Moravia Sport Group granted retailers the western standard of 100 percent, said Martin Zavadil, managing director of the Drapa Sport chain. This step elevated Envy’s prices above the amount most Czechs are willing to dole out for a ski jacket. According to Vladislav Fedoš, a partner at a more familiar low-priced label called Alpine Pro, an average Czech is willing to spend only Kč 2,000 to 5,000 on such items.
But Selepčíny disagrees. “We were almost the last ones to bring jackets [to the market] because we had production troubles in China. Despite that, we were left with only 500 out of tens of thousands,” he said. The expensive Kč 8,000-plus items comprised only 15 percent of all ski-jacket sales last season, he said. And now, the company is improving its inexpensive collections — the segment dominated by its competitors — to attract more youthful buyers. It introduced Berquille, a made-by-Envy label that offers a ski jacket and pant set for around Kč 3,000.

Seeking brand identity
Selepčíny said Envy’s marketing efforts — including billboard campaigns, radio ads and the sponsorship of ski-school instructors and extreme-sports enthusiasts — have cost at least Kč 20 million since the brand’s conception. But most Czech consumers, including five interviewed for this story, have still never heard of the brand.
Nor did Envy ring a bell among a representative sample of 1,000 Czech households polled for Fashion Market 2003, a shoe-and-apparel market poll conducted by Incoma Research, a market survey firm. Incoma’s Martina Drtinová said in general, Czechs do not do well with brand recognition. “They could only name Adidas, Nike, Puma, Hi-Tec and Reebok. Nothing else,” she said.  
By the end of the year, Envy will be sold in 17 brand-name stores — in addition to the sporting chains — in the Czech and Slovak Republics and Estonia. The brand is also exported to dealers in about a dozen European countries.
The company’s sales in the Czech Republic, at Kč 199 million in 2003, are in the range of those of its more well-known competitor, Alpine Pro. Selepčíny said turnover at branches in Slovakia, Poland and Hungary reached an additional Kč 100 million last year. Overall sales of the market leader, Plzeň-based Hannah, were “over 500 million” for the same period, according to a company spokesman.  
Envy’s owners, Selepčíny and Marcel Konečný, 33, have known each other since they were seven years old. In the early 1990s, the two friends opened a small general sporting store in Ostrava. In 1995, they added the distribution of western brands and within two years broke into the business of producing clothes for other clients.   
By 1999, “we told ourselves we could do it on our own,” Selepčíny said.

Michal Schoffer contributed with reporting from Ostrava.

SECTOR: Clothing
OWNERSHIP: a limited liability company equally divided between Pavel Selepčíny and Marcel Konečný
TYPE OF COMPANY: Sports Apparel
CURRENT NUMBER OF EMPLOYEES: 100 at branches throughout the Czech Republic, Poland, Slovakia and Hungary
MAIN COMPETITORS: Hannah, Alpina Pro, Loap
THE ELEVATOR PITCH: Envy is an emerging producer of sports apparel seeking ways of succeeding in a highly competitive and growing market

By: Kateřina Zachovalová, 18. 10. 2004 | Commentaries: 0 | Insert commentary | Format for printing

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