Despite the fact that Wang is only the most common last name is China, some people make the really awesome mistake of asking me if Vera Wang is my mother. And while my dream would be one day to take an awkward family photo with my dearest mother Vera, my brother Alexander, and me, I’ll settle with considering Vera Wang’s (who is?) recent decision to reposition her brand from luxury bridal gowns to mass-market ready-to-wear (thank you total non sequitur).

Vera currently has a three-fold market distribution strategy that focuses on the high-end market, the upper-middle tier of aspirational consumers, and the mass-market. Vera Wang and Vera Wang Bridal focus on the upper-end of the market, while Lavender Label targets an aspirational segment that lies between affordable and luxury prices. At the mass-market level, Vera has Simply Vera, several licensing deals, and several other diffusion lines like White by Vera. (Note: As much as I generally dislike how diffusion lines dilute brand equity, Simply Vera has worked wonders for Kohl’s.)

This distribution strategy seemed to work fine until the global recession came around and shook up the entire market. Now, Vera is opting to shift her focus from high-end downmarket to where Lavender is currently positioned. The upper-middle tier is an increasingly popular niche for fashion brands to target with prices ranging from the hundreds to low thousands as the economy is slowly recovering and consumers regain an appetite for fashion. To reinforce this change, Lavender is now going to be called “Vera Wang” (the current name for her high-end label). Her upper-end line will be renamed “Vera Wang Collection”.

When talking to the WSJ, Vera Wang Group’s president, Mario Grauso, noted that Vera Wang’s upper end line wasn’t producing the profit margin he’d like to see:

“There’s much less of a customer for Collection…The cost is enormous. I don’t make money doing it. I lose a lot.”

This is a common scenario for fashion brands. While brand equity is built from designer collections, revenue is driven downmarket from lower end lines. In fact, most high end labels lose money on the collection, but make up for it via perfumes, bags, and accessories (most of which they don’t even produce and design in-house).

Of course, there is a careful balance that needs to be made between aggressive sales through lower end lines and maintaining an exclusive, high-end image. While Grauso is correct in asking the rhetorical question:

“How many women are really interested in clothes off the runway that are a little challenging and weird-looking?”

The point is not that women are really interested in buying the clothing from the runway, but that they fantasize about being able to afford a gorgeous and almost theatrical Vera Wang dress then buy something from Lavender to satiate that dream.

The Vera Wang Group is charting through an exciting time as it considers how to best grow. The brand is expected to reach $1 billion in revenues this 2012 and this new market strategy should help them reach this point. I fundamentally agree with Vera Wang’s strategy, but the devil is in the details. Can she grow her RTW label without alienating her traditional consumer base upmarket? Can she grow sales down market without deteriorating her strong brand image? Will Vera ever agree to pretend to be my mother for a day? Questions, questions.

Image: Vera Wang Resort 2012 (source: Style.com)