'Big Three' resurrect moldy brands, bond with baby boomers.

What target has done for Merona and Cherokee, Wal-Mart plans to do for Sasson and GE small appliances.

A new licensing agreement with General Electric and the purchase of the Sasson clothing brand will give Wal-Mart even more ammunition in the battle for sales through nostalgia.

Brands that were popular in the 1970s - and still have some "equity" today - are making a comeback thanks to the "Big Three" mass merchandisers: Wal-Mart Stores Inc., Kmart Corp. and Target, the largest division of Dayton Hudson Corp.

The Big Three have been resurrecting old brands, celebrities and even magazine names in a labeling war that has consumers wondering what decade it is.

Wal-Mart sells rakes branded Better Homes & Gardens and hammers labeled Popular Mechanics. Both are names of magazines that still exist today but were enormously popular in the 1960s when only a few magazines were household names.

Kmart sells a line of women's clothing named for Jaclyn Smith, a star in the 1970s television show "Charlie's Angels."

Target has a retro-1960s television commercial that features a mini-skirted model dancing in a sea of bright red Target logos.

The marketing seems to be geared toward baby boomers who get a warm fuzzy feeling from brand names they remember from childhood, To be chosen by one of the big three for such a promotion could resuscitate a brand that's wheezing with the death rattle.

With all this retro-branding going on, the big three are still coming up with new labeling ideas and making use of modern designers.

"Gee." "No, GE"

On June 29, Wal-Mart, with annual sales of $137 billion, announced an "exclusive trademark licensing agreement" that will enable the world's largest retailer to launch a line of General Electric-branded small appliances.

General Electric Co., based in Fairfield, Conn., with 293,000 employees and $100 billion in annual revenue, is hardly an obscure company. GE has been household name for the majority of the 20th century. It is the only company that has remained on the Dow Jones list of industrial averages since the list was first compiled by Charles Henry Dow in 1896.

GE makes everything from light bulbs to jet engines. The company manufactures large household appliances like refrigerators and washing machines, but GE-branded small appliances haven't been on the market since 1985, the last year that Black & Decker, headquartered in Towson, Md., made them for GE labeling.

GE sold that division in 1984 to Black & Decker, which in turn sold its small-appliance division to Windmere-Durable Inc. early this year. But Miami Lakes, Fla.-based Windmere-Durable won't be making the GE-branded products for Wal-Mart.

John Bisio, a spokesman for WalMart, says the GE-branded products - which include coffee makers, irons, toasters, toaster ovens and mixers will begin arriving in Wal-Mart stores in the fall of 2000. The small kitchen appliances will be made by two companies: Hamilton Beach/Proctor-Silex Inc. of Richmond, Va., and The Rival Co. of Kansas City, Mo.

"GE's engineers will be handling a lot of the design, ensuring GE quality is inherent to those products," Bisio says.

Tentatively, Conair has been chosen to make the GE-branded personal-care appliances such as hair dryers and curling irons. Two companies have been selected to make the GE-branded electric [TABULAR DATA OMITTED] fans: Holmes Products Corp. of Milford, Mass., and Lasko Metal Products Inc. of West Chester, Pa.

Bisio believes GE, like Coca-Cola, is such a powerful name in the American psyche that most shoppers in this nation probably don't realize GE small appliances have been absent from store shelves for the past 14 years.

"GE has such a presence, I don't believe people even realize they dropped out of the small-appliance business," he says. "GE has a history with the consumers, one that is highly revered and respected. When you think of GE, you think of electrical appliances, and that will certainly translate well into the small appliances."

Sasson, Not Sasoon

A month after the Wal-Mart/GE announcement, Wal-Mart purchased Sasson, a line of apparel that was sold at Bloomingdales and Saks Fifth Avenue stores in the early 1980s but was relegated to the discount stores in the 1990s.

Sasson is not related to Vidal Sasoon hair care products, but many consumers probably get the two confused, giving Sasson more name recognition than it would have otherwise.

Wal-Mart may be working on more branding deals, but Jessica Moser, a spokeswoman for the company, wouldn't confirm that, adding that the GE and Sasson deals didn't represent a "trend" in Wal-Mart's strategy.

Details from the two agreements weren't disclosed, and Wal-Mart wouldn't say what the "purchase" of the Sasson brand entailed. But experts say the deals are probably good for Wal-Mart and particularly good for anybody Wal-Mart chooses to promote.

"It'll be interesting to see if Wal-Mart can revive these brands that the manufacturers have basically given up on," says Paul Kelly, president Silvermine Consulting, a Westport, Conn.-based consulting firm that specializes in sales and marketing, "Shelf space is such a premium for everybody. Wal-Mart can do a lot to make or break any brand."

Kelly says Wal-Mart has gained such clout as a retailer that the company is basically telling manufacturers, "Hey, I'm a retailer, and I'm a better marketer than you are. I can make this brand work."

Simply by placing the items on its shelves, Wal-Mart is giving these brands a significant boost in visibility and name recognition.

"Foot traffic in retail is as good a way to build a brand as broadcast [advertising], maybe better," Kelly says.

The Sasson and GE deals amount to what the industry refers to as "captive brands," that is, brands that will be sold only through Wal-Mart.

Private label

Private-label store brands are now a $43.3 billion industry, according to the latest numbers from Information Resources Inc. The Private Label Manufacturers Association, based in New York City, says private label goods account for 11.8 percent of unit market share among mass merchandisers (that's up from 11.2 percent in 1997).

Over the past decade, Wal-Mart has established itself and its line of private-label products, which include Sam's American Choice (food and household products), Great Value (food items) and Equate (health and beauty products).

The company can now move on to selling captive brands like GE and Sasson and have a slightly higher profit margin on those goods, says Neil Stern, a partner in the retail consulting firm of McMillan Doolittle in Chicago.

"If you think, 20 years ago, would you buy Sam's products? Probably not," Stern says. "You'd say, 'I don't know who Sam is or what Wal-Mart is."

But times have changed.

Shoppers will go to the Wal-Mart stores for the low prices and brands they've come to trust, including the store's private label brands, Stern says.

"The same stuff is happening at Target and, to some degree, Kmart," he says of the captive brands. "They're basically psuedo-brands. It's a little different than private label."

Stern says the brand names GE and Sasson will "ring a bell with the customer.

"They'll say, "I've heard of this brand,'" he says. "You're better off that way than with an unheard of private label. People certainly know General Electric. If they can make an airplane engine, surely they can make a toaster."

Wal-Mart has launched its own line of laundry detergent (labeled Sam's American Choice), which will compete against one of Wal-Mart's best selling detergents, Procter & Gamble's Tide.

"Wal-Mart built their business on having the name brands at low prices," says Stern. "Now, as the business matures and Wal-Mart is the major brand, you can experiment with private label."

Peter Berlinski, the editor of Private Label magazine in New York City, says the big three are trying to secure "destination brands" - brands that will be sold exclusively by one retailer and will make that retailer's stores a destination for shoppers.

Other experts believe Wal-Mart, by virtue of its name, is a destination unto itself, a modern general store of sorts where shoppers go for a week's supplies in one swoop.

The theory is that, through licensing, Wal-Mart will build brands - such as Sasson - that wouldn't necessarily draw customers to the store now. After being resurrected by Wal-Mart, however, the brands may once again be the bait that helps lures customers in, says Jon Berry, editorial director of Roper Starch Worldwide, a market research and consulting firm based in New York City.

Berry says many retailers, such as Restoration Hardware, use "heavy doses of nostalgia" to lure baby boomers. Wal-Mart did that with its Neighborhood Market stores that were launched last year in Northwest Arkansas. During a tour of the first Neighborhood Market store, executives noted that the candy bins are supposed to resemble those in an old-time general store.

"That can have a strong impact," Berry says. "Nostalgia is very popular right now. ... You've got a large part of the population that's in its nesting age."

On Target

Target, with revenue of $20.37 billion in 1997, had a compound annual revenue growth over the past 10 years of 14 percent, reflecting a 5 percent increase in comparable-store sales, combined with sales growth of about 9 percent from new stores.

In the mid-1990s, Target, which bills itself as the "upscale" discount chain, started the trend of reviving tired brands when it began carrying the apparel brands Merona and Cherokee.

But that was only the beginning.

This past January, Target unveiled a new line of 200 household products designed by Michael Graves. Graves - best known perhaps for his signature piece, a retro teakettle - had designed a lauded Hyatt hotel in Japan, the Swan and Dolphin hotels at Walt Disney World and some high-end items for Steuben and Lenox.

Kmart Smarts

Target appears to be using the Graves collection to differentiate itself from Kmart, which has been very successful with its Martha Stewart Everyday line of home decor items.

Kmart's contract with Martha Stewart supposedly cost the company some $5 million. Kmart has high expectations for the line, believing that it could become the largest soft home-retail brand in America. The Martha Stewart line first appeared in Kmart stores in 1997.