NEW YORK -- Mass merchandisers are becoming important distribution channels for outerwear manufacturers who want to reduce their dependence on the increasingly consolidated department store market.
In a category often dependent on weather, several manufacturers said their mass business can act as a cushion against a difficult department store season.
While the importance of outerwear varies widely among the mass chains, some, including Sears, Roebuck Co. and discounters such as Bradlees and Kmart, are paying more attention to the category. They are updating offerings and looking for more fashion and quality in an attempt to gain market share from department stores.
At Sears, Lana Cain, divisional vice president of outerwear, juniors, dresses and maternity, said that by 1999, the company plans to increase the floor space in its outerwear departments by 10 percent. Major renovations in outerwear departments are slated for 140 of the company's 799 stores over the next five years.
Of the 50 brands offered in Sears stores, Amerex, Lou Levy, Alorna and New England Macintosh are top sellers. Sporty looks and leather goods are boosting outerwear sales, Cain said. Key items include a reversible fleece jacket, a leather bomber and a reversible denim jacket with detachable vest and hood.
The company promotes some of its fashion outerwear in its institutional "Softer Side of Sears" television ad campaign, she said. But Sears' annual six-week preseason sale -- from late July through early September with 25 percent markdowns -- is the big generator of direct business, Cain said. Additional promotions held throughout the year include an after-Christmas sale with discounts up to 50 percent, she said.
"Active looks are the number-one growth area for coats, and leather is number two," Cain said. "We expect to maintain the wool business, and rainwear is pretty flat."
In the past four years, outerwear has become a strong performer at Bradlees, based in Braintree, Mass. Offerings have increased, and private label decreased. Most of the chain's 126 stores devote 4,000 square feet to outerwear during the fall season, according to Patty Gallagher, outerwear buyer.
Roughly 30 percent of the stores' merchandise is private label -- compared with more than 50 percent in 1990 -- Gallagher said. Bradlees' outerwear offerings have tripled since 1990, said Gallagher, noting Amerex, Fleet Street and Herman Kay are top performers. Retail prices range from $17 to $150, with a $30 polyester printed polar fleece jacket selling well for early fall and a $150 long leather coat expected to be strong later in the season."We used to sell real discount-type coats -- cheapy wools and lots of imports that were 20 percent wool and 80 percent who knows what. Four years ago, we started buying good quality items, changed the assortment, rearranged the department and brought in more updated styles," she said. "Now it's a very developed business, and we'll continue to push for quality."
After updating offerings, the company moved most outerwear departments to heavily trafficked areas of the store, Gallagher said. With 10 new stores scheduled to open before November, Bradlees is planning for growth in outerwear, but Gallagher said the store is realistic.
"Some people are still feeling pangs from the recession. It made a lot of people take a good hard look at how they spend every dollar they earn," Gallagher said. "Our customers are not very label-conscious. Now when they buy a high-ticket item such as a coat, it better be a quality coat at a good price."
Roughly 80 percent of the outerwear offered at Kmart's 2,200 stores is casual, according to Larry Hefner, women's outerwear buyer. At least five private labels and two brands are available on eight circular racks in each store, he said. Offerings have increased over the past few years, even though most outerwear departments are the same size, he said. There are no plans to expand the departments. Outerwear sales increased by 5 percent last year, Hefner remarked, and he is expecting volume to continue inflating at that pace. About 20 outerwear vendors, such as Lou Levy, G-III and Comint Leather, are offered at Hills Department Stores, based in Canton, Mass. Most of the chain's 152 stores are in the Midwest.
Mary Murrell, women's outerwear buyer, said, "It's very weather-related."
In most stores this fall, $11 nylon fleece jackets, $60 leather jackets and at least 28 other styles will be offered on 14 racks. Although there is 25 percent less merchandise this fall than last, the chain has gone into some higher-priced items, such as leather and suede jackets, Murrell said. Full-length leather coats are priced at $100.
The company has offered outerwear since it was founded in 1957. A slight volume increase is projected for fall, despite the cutback in inventory.Vendors face the challenge of servicing the mass market without antagonizing the department stores and specialty stores that are their better-price customers. Different labels and divisions are the usual solution. Essex Manufacturing, which holds licenses for J.G. Hook and Misty Harbor slickers, for example, has developed lower-priced private label collections to enhance its business.
Essex's private label rainwear business with mass marketers has doubled in the last five years, said William Baum, executive vice president. The company distributes casual rainwear to Wal-Mart, Kmart, Sears, Bradlees, Caldor and other mass marketers. Mass marketers generate twice as much in sales as department and specialty stores, he said.
Essex's mass sales are expected to increase 5 to 10 percent this year, and Baum said over the next five years, the category should grow at least 5 percent each year.
"With the shrinking of the department stores, it was a matter of survival," he said. "We had to figure out a way to sell to both the mass and department stores without department stores saying, 'Hey, wait a minute. You're selling the same thing to Wal-Mart for $20, and mine is $30."'
Lou Levy & Sons here has produced goods for the mass market since it was started in 1953, said Donald Levy, president. Today, 40 percent of the company's volume is generated by sales to Wal-Mart, Kmart, Bradlees, Sears and other mass marketers. With prices of $18 to $60, two trendy outerwear labels -- Charisma and New York Girl -- are strong performers at the mass outlets, Levy said.
While a 5 to 10 percent increase is projected for mass business this year, Levy said a 20 percent increase is expected in the company's higher- priced outerwear, which is sold to specialty and department stores.
"We service everyone from Wal-Mart to Saks Fifth Avenue. We see what's selling at the higher price points and apply that to our popular price division," Levy said. "Obviously, it's not the same product. But mass is not just a price-driven business."
Lou Levy has manufactured in Russia and Ukraine for the past three years, and Levy noted that sourcing for the mass market has improved considerably. The company plans to maintain its two factories in Alabama, since Wal-Mart and other mass merchants support domestic manufacturing.Amerex, which holds the license for Misty Harbor rainwear and outerwear, also manufactures lower-priced outerwear under the Current Seen label. The company projects a 5 percent gain for Current Seen, which sells to such stores as Kmart, Montgomery Ward and Sears, said Jesse Mendelson, vice president of sales.
The company typically introduces 60 fall styles and 40 spring styles. Wholesale price points range from $21.75 for a cotton poplin jacket to $33.75 for a brushed cotton poplin jacket filled with polyester, he said. The bulk of Current Seen's business is triggered by mass sales, he added.
"We see that the mass merchants are taking more business from department stores," Mendelson said.
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