Allied Domecq (NYSE: AED ) , the world's No. 2 spirits company after Diageo (NYSE: DEO ) , has come up with a new way to wring more profit out of one of its brands: It plans to launch a new line of clothing featuring the 170-year-old brand name Courvoisier.
You probably know Courvoisier as a cognac. You may also know some of Allied Domecq's other brands, such as Ballantine's, Beefeater, Stolichnaya, and Kahlua, not to mention the Baskin-Robbins, Dunkin' Donuts, and Togo's Eateries franchises. But back to the fashion news.
The "Atelier Courvoisier" fall collection will feature about two dozen pieces of "luxury sportswear" for men and women. A Wall Street Journalarticle (subscription required) notes that the company "believes the Courvoisier clothes can command top dollar. A deerskin trench coat might go for $10,000. A purse, made with silk ribbons and replica medallions from the Napoleonic era, costs $750. A bottle of Courvoisier cognac costs $26."
The company has invested about $600,000 in this new venture, and projects sales in its first year to ring in between $1.5 million and $3 million. But as the Journal noted, "The bigger goal is to help transform Courvoisier from liquor label to lifestyle brand."
It's not the only company to attempt such a transformation. Many firms have branched out into new directions, with varying degrees of success. Starbucks (Nasdaq: SBUX ) , for example, introduced Joe Magazine, which folded after a few issues. But it has experienced more success with music than literature, selling hundreds of thousands of CDs.
There's no shortage of luxury brand names out there, so the Courvoisier clothing line will have to fight to be visible. And will enough consumers want to wear clothing unavoidably associated with alcohol? We'll see.
What do you think? Talk about Courvoisier on ourAllied Domecq discussion board (yourfree trial is here ). And to receive promising investment ideas monthly, check out our suite of Fool stock newsletters.
Longtime Fool contributor Selena Maranjian owns no stock in companies mentioned in this article.
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