Is it fad or fashion forward? Whatever it is, retailers are increasingly adding salsa to their clothing lines in an effort to boost sales.
Though it seemed to begin as a ploy for singer Jennifer Lopez to market herself and her J.Lo line of fashion, perfume, and restaurants, it has fast become de rigueur in the industry to have Hispanic women front and center in its marketing. J.C. Penney (NYSE:JCP) is the latest in a long list of retailers who are spicing up their clothing lines with a Latin flavor called Candela, though presumably there is no relation to the Spanish TV personality Candela Ferro.
In 2003, Sears (NYSE:S) unveiled a line of apparel named for Lucy Pereda, who has minimal name recognition outside the Hispanic market but is considered to be the "Latina Martha Stewart," sans the arrest record, of course. Her collection has expanded to include shoes, handbags, and jewelry. Kmart (NASDAQ:KMRT) followed suit with its Thalia line of home goods named for Mexican soap opera and pop star Thalia Sodi. Both of these retailers have a large presence in urban areas, making a Hispanic marketing campaign natural for them. Yet more suburban Kohl's (NYSE:KSS) also launched a clothing line featuring TV personality Daisy Fuentes, who was hardly ever marketed as Hispanic when she began as a VJ on MTV. She was chosen because of her cross-cultural appeal, and her line will also include jewelry, handbags, and sleepwear.
Retailers were spurred to action by the 2000 U.S. Census, which highlighted a glaring opportunity that had previously been ignored: The Hispanic population is a growing demographic in this country and had already grown 58% over the past decade. More importantly, to the retailers anyway, Mediamark Research found that Hispanic women tend to spend more money on clothing than any other ethnic group in the country and that the Hispanic apparel market is about $15 billion of the $170 billion clothing industry, according to NPD Group, another market research organization.
Hispanic men have not been completely ignored, either. Men's Warehouse (NYSE:MW) is launching a pre-Castro Havana "lifestyle" chain called Eddie Rodriguez; TV personality Don Francisco has promoted calling cards; and Macy's and Nordstrom's (NYSE:JWN) feature a popular line of women's shoes "designed" by legendary guitarist Carlos Santana. (Yeah, I don't get that either.)
J.C. Penney was the No.1 seller of women's clothes for years until it was overtaken by Wal-Mart. Though it's doubtful it will wrest that crown from the discount king any time soon, a financial turnaround coupled with some Latina flair will undoubtedly ensure it doesn't lose any ground.
While it may certainly appear to be pandering and simply jumping with both feet into a trend, it can't be denied that the Hispanic market is an attractive and lucrative one. It expands far beyond just clothes. Even Hidden Gems recommendation Coinstar (NASDAQ:CSTR) picked up privately held Mundo Communications, a prepaid calling card service, because of its presence in the Hispanic community. In a cutthroat business like retailing, catering -- not pandering -- may be just a matter of survival.
Read more about the growing Hispanic cultural phenomenon:
Also, hook up with other Spanish Speaking Fools on the Motley Fool discussion boards.
Fool contributor Rich Duprey is certain the fact that his girlfriend owns two dozen handbags has nothing to do with her being of Puerto Rican descent. He owns shares in Wal-Mart does not own any of the other stocks mentioned in the article.
