A Classic All-American Beauty at 50 : The venerable Ellen Tracy earns its $250-million in annual volume with a canny mix of trend awareness and practicality.
There is no Ellen Tracy. Never was. It’s a made-up name for a firm that was born in 1949, a time when “if you had a women’s line, it had to have a woman’s name,” says the founder of the family-owned company, Herbert Gallen.
Gallen, 83, is a white-haired gentleman wearing wire-rimmed spectacles, a dark suit and a tie. He has the reserved but well-to-do look of a banker or perhaps the senior partner in a law firm. But he is a garment man driven by straightforward, logical concepts such as profit margins, customer satisfaction and reliability. He is not prone to fits of whimsy and he has earned the right to brag.
“We’ve never gone a year without a profit, even if it was only $10,” he says.
Ellen Tracy should not be confused with a fashion house in the manner of Donna Karan or Christian Dior, with all of the attendant distractions of creative indulgence, impetuousness and petulance. Here, no one makes voyages to Bali in search of inspiration for a button or uses actual steam locomotives as runway props.
Instead, Ellen Tracy is a fashion business, focused on sales, growth and dependability. But contrary to the trend-hunting naysayers of the fashion industry, such dedication to the bottom line does not lead to the tried-and-true. Bland clothes generally mean lackluster sales and a short-lived business. Ellen Tracy is not dull, although there are plenty of folks who find it far too conservative. But if it was bland, it would not have reached this landmark: In an industry where a typical company is lucky to be vibrant and relevant for 25 years, Ellen Tracy is celebrating its 50th anniversary.
The company’s mission has always been to manufacture smart clothes that women-including those who have chubby thighs, broad hips, thick waists, sagging rears or a stubborn extra five pounds-can wear for leisure and, more important, for work. These are clothes that women can feel certain will be stylish for years to come.
It is no secret that these clothes have a generous cut, allowing a woman who is a size 12 in designer collections to slip into a size 10 or even an 8 when she buys Ellen Tracy.
“We do cut a fuller size, but it’s not just bigger but longer in the legs and longer sleeves that you can alter to fit,” says the company’s director of design, Linda Allard. “Every designer has a vision of who their customer is. Ours is the all-American girl as opposed to the waif-thin model.”
The company also was part of the early wave of Seventh Avenue businesses embracing full-figured women. Ellen Tracy introduced a plus-size division about five years ago.
With its down-to-earth point of view and size-inclusive philosophy, Ellen Tracy has created a psychological comfort zone whose value cannot be measured.
Branching Out
From the Basics
The company began with the most basic garments: white blouses. They still receive plenty of praise. “I think she makes the best white blouses. The really top designers’ can be $1,000 but hers are a step up from the Gap and nice quality,” says Norma Kline, a Washington shopper.
The white blouse led to a peacoat. Coats led to dresses and skirts and cocktail attire, until the company eventually earned a reputation for catering to working women with offerings that are professional, fashionable but never extreme. The collections are spiced with the season’s trends, but they are not mired in fads.
The credit for that delicate balance of creativity and reality goes to Allard. While Gallen is the businessman, Allard’s vision allows the company to win the grudging respect of fashion critics and the enthusiastic support of retailers. Her skill at trend translation has helped propel Ellen Tracy to more than $250 million in annual volume, according to a company spokeswoman. The company is not as enormous as the publicly traded Gucci Group, which has close to $1 billion in net revenues. But it is far bigger than more glamorous companies such as Michael Kors, John Bartlett or the now-defunct Isaac Mizrahi.
“Linda is a very qualitative, sensitive, smart woman and she really is very focused on who her customer is,” says Philip Miller, chairman and CEO of Saks Fifth Avenue. “She takes the newness that comes down the pike and interprets it for her customer.”
For example, when the fashion industry embraced mannish, flat-front trousers, Allard had them in her collection, but cut to fit a womanly figure. She had fishtail hemlines, but hers were more of a wisp of trailing fabric rather than a dragging yard of material. She shows sheer blouses, but with a camisole underneath. She embraced long skirts, but mostly for evening, because her customers are not likely to float into the office in floor-length pink taffeta.
Allard, 59, grew up in Ohio and arrived in New York after studying fine arts at Kent State University. She has told this story enough times that she has whittled it down to the barest essentials. She knew nothing about Ellen Tracy when she was hired as an assistant designer. After two years, the lead designer departed and Allard was promoted to director of design. That was 1964. Allard has been at Ellen Tracy ever since. And she has stayed focused on her mantra: “Know who your customer is.”
Who is that person? “It’s for people who have to wear suits, like me,” says Anita LaRue-McAfee, a Washington lawyer. The clothes “are classic without being frumpy.”
Where Pragmatism
Trumps Caprice
Like a lot of mid-range lines, Ellen Tracy has taken its share of blows from the constant, dramatic discounting done in department stores. The company recently launched an incentive program to encourage women to make their purchases at full price. For every $1,000 spent on non-sale merchandise, women receive a $100 gift certificate toward more clothes at full price. Ultimately, it’s still a discount, but without the carnival barker atmosphere.
“Part of the problem with retail is everyone is looking for a deal,” Allard says. “We need to reacquaint the customer with ‘If you really love something, it’s OK to buy it.’ ”
Gallen, who started out in the garment trade in Paterson, N.J., once thought about taking the company public. But Wall Street hasn’t been kind to most apparel firms, so he is happy he kept the business in the family. He’s also steering clear of the industry’s other favorite pastime: building free-standing stores. The point in all of this is profits, you see, not hubris.
“I don’t know anyone with a free-standing store making a profit on it,” he says. “I’m a manufacturer, not a retailer.
“Work with what you know.”
Following the company’s fall ’99 runway show earlier this year, Gallen threw a 50th anniversary party in the recently renovated Vanderbilt Hall at New York’s Grand Central Station. Champagne flowed. Tables were weighted with caviar, pasta, canapes and crudites. Waiters circulated with dessert trays loaded with miniature cheesecakes. Members of the fashion industry showered Gallen and Allard with congratulations.
But there was a difference between this party and other industry soirees. This one was not wickedly excessive. There was even the slightest hint of humility. That mood was engendered by something as simple as the flowers. Instead of the usual explosive fleurs choking the air with perfume, there were tiny yellow mimosa blossoms.
The party had its share of stardust with “NYPD Blue’s” Sharon Lawrence and former congresswoman Geraldine Ferraro, but it lacked the typical fashion glitterati that send the paparazzi into lustful spasms. There was no Elizabeth Hurley happily revealing enough bare skin to keep the cameras whirring. There was no parade of hip-hop stars such as Puff Daddy bestowing an aura of dangerous cool on the entire event.
Instead, Cindy Crawford, pregnant and completely dressed, chatted quietly into the lenses of a few sedately roving television cameras. She had walked the Ellen Tracy runway earlier in the day. The room was not aflutter with flying air kisses but rather firm handshakes and palsy-walsy backslapping.
And the money men were there. “We always get all of the major retailers,” Allard notes. “A lot of companies don’t really get that.”
A Retail World
Favorite
They know who helps them to turn a profit. Profit. The word makes retailers swoon.
The collection has been good to Saks. “It’s a huge business for us. It’s one of our primary vendors in sportswear and special sizes,” CEO Miller says. “It’s a big profit-maker, representing more than $50 million in sales for us.”
Miller, as well as company heads Michael Gould of Bloomingdale’s and Burt Tansky of Neiman Marcus, isn’t celebrating an image or a personality. They are honoring longevity and productivity.
“They’re today and yet they’re a company that’s 50 years old,” says Tansky, chairman and CEO of Neiman Marcus, which has had a business relationship with Ellen Tracy for more than 25 years and carries the line in all 31 of the company’s stores.
“They have remained relevant by understanding changes in fashion and design . . . but there’s nothing over the top about it,” Tansky says. “They’ve paid a lot of attention to the customer and they give great service.”
Both Allard and Gallen watch the pennies--to differing degrees--making sure that a design never prices itself out of its market.
“When I choose luxury fabrics and fibers, I care how they’re going to price out,” Allard says. “One of the things I think makes Ellen Tracy successful is by trying to offer value. There is no 100% cashmere coat in the collection because it’s too expensive. A cashmere blend is more reasonable.”
Such concern is not standard throughout the industry. It is not uncommon for designers to toil over a single garment and have no clear sense of what that garment must ultimately sell for if a profit is to be realized.
But the Ellen Tracy collection is not inexpensive. Jackets are about $450, trousers cost $200. A full workday ensemble can easily total $900. Customers are quick to take note of this.
“I think it’s overpriced when compared to other brands,” Lawyer LaRue-McAfee says. “But it’s always a little bit more stylish. The price is my biggest complaint, but I love the clothes.”
The Ellen Tracy collection is part of the bridge market, a division ultimately defined by retailers that has to do with pricing-somewhere between the costly Giorgio Armani label and the more modest Liz Claiborne line.
But more than reflecting a pricing structure, which can vary from store to store, Allard, along with other bridge line designers such as Dana Buchman and Eileen Fisher, captures a sensibility.
“We have important jobs, a lot of things going on in our life. Clothes are important but women aren’t slaves to it,” Allard says. “Women don’t want to buy clothes to become obsolete.
“Mr. Gallen has been such a good mentor. He never allowed me to create something he didn’t think we could sell,” she says. “After all, this is a business. We’re in a business to make money. What’s the point of spending all this time creating something we can’t sell to anybody?
“Sometimes, we lose sight of that.”
