Loblaw and Joe Fresh Style

Loblaw's Fresh approach
TheStar.com - Business - Loblaw's Fresh approach

Joseph Mimran, the man behind Joe Fresh, says brand has already hit $400 million in supermarket sales

September 07, 2007
Dana Flavelle
Business Reporter

With his deep tan and crisp, white, open-necked shirt, Canadian fashion design retailer Joseph Mimran looks like he just stepped out of a Ralph Lauren ad.

Indeed, the man behind Loblaw's Joe Fresh line of cheap, chic clothing was briefly linked to the American fashion icon through Polo Ralph Lauren Corp.'s purchase of Mimran's Club Monaco and Caban stores in 1999.

That relationship ended abruptly with Mimran's firing as sales slipped at the hip, stylish clothing and housewares stores he co-founded with his older brother Saul and Canadian fashion designer Alfred Sung.

But that was then.

Now, Mimran is the genius behind Loblaw's Joe Fresh Style, an 18-month-old brand that already commands $400 million in sales for the country's largest supermarket chain. By the end of 2009, Loblaw Cos. Ltd., projects Joe Fresh saleswill hit $1 billion, making it the single biggest clothing brand in Canada and a sizeable chunk of Loblaw Cos.' projected $30 billion a year in sales.

Does Mimran feel vindicated?

If so, he's not saying.

"The first time you're successful, people say, `Oh, you were lucky.' The second time they say, `Oh, you were really lucky.' ... The fourth time you're successful, they say, `He must really know what he's doing,'" he says.

Mimran is standing outside an 18-wheel truck that is covered in photos of kids in the latest Joe Fresh styles. The truck, called a "pop-up" store in fashion industry jargon, begins a cross-country journey today as part of a "very aggressive" marketing campaign, says Mark Foote, Loblaw's president and chief merchandising officer.

The truck will be "popping up" in places like Toronto's stylish Yonge and Eglinton neighbourhood before moving on to Winnipeg, Edmonton, Calgary and Vancouver.

Loblaw is spending heavily to market the Joe Fresh line as it's expanded to more stores and more product categories, Foote said. Watch for Joe Fresh cosmetics and jewellery in future, he said.

Joe Fresh is a "mass-tige" brand, Mimran explains, a fashion industry phrase for brands with prestige styling but mass-market pricing: down-filled vests for $24, organic cotton baby blankets for $12, pencil skirts for $29. The clothes are designed by Mimran & Associates at its studio on Atlantic Ave. then made in low-cost countries such as India, China and Cambodia.

Mimran, 53, has other ventures, including helping his wife, fashion designer Kimberly Newport, promote her Pink Tartan brand of high-end women's wear.

"It's getting lots of recognition in the U.S. where the volume for that price point is where you have to go," he said. "It's been a lot of work. A lot more difficult than this," he said, referring to Loblaw's powerful distribution network, with more than 1,000 stores across Canada.

But is Joe Fresh helping "To make Loblaw the Best Again," the supermarket operator's stated corporate goal after reporting its first annual loss in 19 years last year as it restructured to meet new competition from Wal-Mart Canada Corp.?

"Most of the research says the brand brings consumers into the Superstores," said Foote. "It creates loyalty to the stores it's carried in, which is the strategy behind it."

The brand was initially available only in the company's Real Canadian Superstores, a chain that has flourished in western Canada but has yet to find its footing in Ontario. The newest Real Canadian Superstore, in Milton, shows the company is still struggling to hit the mark, financial analyst Perry Caicco, of CIBC World Markets, wrote in a report this week. "The food offering is weak. The perishables are limited and under-merchandised, natural and organic have been minimized and pricing, although lower, is still not close to Wal-Mart," said Caicco.

L-tc (Loblaw)


Monthly chart shows price has been in a steady downtrend for the last two years, and with no end in sight.

The weekly chart shows price to be trading below the $52-$53 resistance level.

The daily chart shows that the stock made a new low for the year last week. No signs of buying as of yet.

WN-tc (George Weston Limited)

The Monthly chart shows the price has been in a steady decline since the price found resistance at a .786 fib level. For the past year, price has been stuck in a narrow trading range.

The weekly chart shows price to be trading at the lows of the trading range.

The daily chart shows early buyers making initial attempts to step back into the stock, but each time, was met with selling.