By  on March 20, 2006

NEW YORK — If there's one constant in the apparel industry, it's that business trends follow the money — especially money spent by consumers.

But consumers are finicky, and can change loyalties to a brand, retailer or fashion look in a flash. To succeed in this market, vendors and retailers have to tap into trends that can maximize sales and profits. Over the past year, profitable trends that have emerged include the growth of premium denim as well as private label brands, say several factoring firms who track trends on the retail and supplier side of the industry.

In the past 18 months, factors have seen robust growth in the denim market, especially at the high end. And the factors agree that there's still opportunity in the segment as denim evolves into the foundation of a women's wardrobe.

"We talk a lot about the elimination of the specialty store, but there's this renaissance in the denim market. For example, the boutiques have gotten a little resurgence and they are able to differentiate themselves, although there are certainly not as many as there used to be," said Dave Reza, senior vice president, western region, Milberg Factors.

Reza said start-ups that do well are having success with premium lines.

"Did any of us ever envision $175 blue jeans having a life? Seriously? We thought it was a flash in the pan. Denim is now like the little black dress; pair it with a T-shirt, a shirt, a jacket — it's accepted everywhere," said Jeff Enoch, vice president, Rosenthal & Rosenthal of California Inc.

Despite the continued popularity of the segment, factors caution that market positioning is still key.

"As is the case when you see any 'hot' segment of the marketplace, you see a lot of companies rush toward that segment. I think we're beginning to see a little bit of fallout from [premium] denim. There are some companies out there that maybe weren't as well geared to enter the marketplace that just frankly aren't doing well with it. That will be one of the issues we have to deal with in 2006," said Kevin Sullivan, executive vice president, western regional manager, Wells Fargo Century. In particular, companies without expertise in the denim market who try to jump on the bandwagon will fall out, he predicted.

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