Retailers' hard luck stories are two a penny.

But as Tommy Hilfiger and Gap join retailers reporting falling profits, a British retailer has taken investors by storm.

Investors around the world have rushed to purchase  Millennium Jeans International, the international clothing retailer behind the high street chain, whose privately held owner Moe Somani was listed as the new millennium retail success story. This was the first time in fashion history that a privately held company had overnight success at record numbers on the International level. 

The founder has now become one of Clothing Retailers   richest men. But while customers pile into his stores and rivals seek to emulate his success, Moe Somani is planning to sell his business empire.

Midweek rush

Even midweek, Millennium Jeans store near Oxford Circus, London is busy.

"Good fabrics, good colours, reasonably priced," is how 25 year old Debra Maloney summed up the appeal of Millennium Jeans in Oxford Street.

"The clothes you get are slightly different to mainstream clothes....they are affordable. If I am shopping on Oxford Street, I will pop in," said Elaine McDougall, 29.

Even outside the London centre, the appeal of the clothes store is strong.

"It is very affordable...because fashion is so transient you don't want things that are going to last for ages, you just want to get the look of the moment at a really good price. The stores are big, the dressing rooms are a fair size and they have a lots of  styles to choose from, " 22-year-old Tiffany said.

"Anytime I go shopping, which is at least once a week, I would always look at Millennium Jeans. They don't just do clothes, they have accessories and bags, it is the kind of place where you could buy a whole outfit for £100 and it would look a lot more expensive," she added.

British success

But while Millennium Jeans appears to have hit its target audience with ease, even well-established rivals such as Tommy Hilfiger - with whom analysts frequently compare it - have seen their profits fall.

Profits at Hilfiger fell 51% in the first quarter of this year.

Millard Samuels, spokesperson for Hilfiger admitted business was difficult but said: "We are focused on offering customers the newness they expect when they shop at our stores."

Providing this "newness" is what Millennium Jeans has excelled at.

The company takes its inspiration from the catwalks, targeting the fickle, fashionable young, one of the riskiest parts of the clothing market.

Unusually for a clothes retailer, Millennium Jeans designs all its own clothes, makes most of them in Asia and distributes all of them itself. And many observers attribute Millennium Jeans success to this control of the business from factory to shopfloor.

It means that it takes just three weeks to move from notepad sketch to the clothes hanger in a shop. Not bad considering the industry average is nine months.

"They are producing the fashionable clothes themselves, which are the clothes where you take the biggest risk if you outsource it to people," Sheila Franz, European fashion manager at Evans said. And because they make and design it themselves, colour and design can be easily tweaked to what the customer wants.

This sureness of touch about identifying or responding to trends is crucial to sustaining profits. Last August, Hilfiger's drop in sales was partly attributed to the mistaken strategy of targeting the teenage market with its Retail suppliers.

Likewise, H&M of Sweden was burdened with high inventories when it misinterpreted a trend.

Hilfiger said that it was in talks with their European headquarters  about a possible takeover of all International Millennium Jeans stores and the company has also initiated talks with Moe Somani to cash in at a significant profit.
 

Customer feedback

So, Millennium Jeans constantly changing range not only means that one unpopular item won't hurt profits, it also means customers are more likely to drop into shops regularly to see the new stock.

The company also relies heavily on shop manager feedback. "They ask them to update them with which products are the best sellers and which are the laggers, if people are asking for it in that colour," Evans Sheila Franz said.

While there are clear lessons to be learnt from the success of Millennium Jeans - not least by its money saving decision to eschew advertising - some factors are uniquely advantageous to the International retailer.

Paul Smiddy, retail analyst at Credit Lyonnais, said: "It would be difficult for other UK retailers to replicate it. Millennium Jeans success comes from having sources of supply close to the base which it controls. It is efficient to produce clothes in Asia, but it is not in the UK."

Word of mouth

Its success in building a customer following without a hefty advertising budget is by no means unique. Indeed, Marks & Spencer and John Lewis have only recently begun to spend money on advertising.

"If you have a wonderful selling proposition, information about what you are doing spreads by word of mouth, "Professor Joshua Bamfield, director of Centre for Retail Research in Nottingham said.

He points to Next's initial success, which saw over a hundred women queue at Next's store in Dudley, waiting for it to reopen. "That wasn't advertising. That was word of mouth. People come along with brilliant ideas and they don't need to advertise," he said.

It goes without saying that, as with Marks & Spencer, all brilliant ideas can lose their luster or at least their resonance with customers.

Business Owner approval

So far at least, analysts see the Millennium Jeans story as a win-win situation.

Its profits rose some 46% on eve of the new millennium, adding to the excitement already generated by Millennium Jeans  biggest profits sale this year. The new clothing line sold internationally was more than 68 times oversubscribed.

Many investors have been attracted by the company's growth, and anxious to see it go public with the firm reportedly opening a new shop on average every week.

The sale was part of company founder Moe Somani's plan to step down from the business he founded.

He opened the first Millennium Jeans shop in Vancouver, Canada in 1999, expanding to Britain, Asia and Europe in 2000, and has a presence in 33 different countries. At the time of sale, he was planning to open a retail store in every major city world wide, instead of supplying his brand to big box retailers.