Factors see brand identity and overseas investment as the critical topics du jour for the apparel industry this year.
In a recent roundtable discussion held in Los Angeles with factoring executives based on the West Coast, factors discussed the role of brands, the impact of private equity and foreign investment dollars, a manufacturing model that is both domestic and global and the continued influence of the teen sector on apparel trends.
Participants included Mitch Cohen, executive vice president, Western regional manager of commercial services for CIT; Harry Friedman, senior vice president, Rosenthal & Rosenthal; Kevin Sullivan, executive vice president and Western region manager, Wells Fargo Century; Dave Reza, senior vice president, Western region, Milberg Factors, and Ron Vanek, executive vice president, regional manager, GMAC Commercial Finance.
WWD: What is the overall outlook for the apparel industry in 2007?
Mitch Cohen: We're off to a pretty sound year. The suppliers are going to continue to get squeezed for margin compression by the retailers. The suppliers are generally getting smarter to survive, and they're delivering a more efficient model to the retailer.
Harry Friedman: We'll see somewhat of a similar situation to what we saw in 2006, with a slight increase in retail sales on the apparel side. I don't think it will beat expectations — this past year was a little below expectations. We see it as an acceptable year.
Kevin Sullivan: We see a continued emphasis on quality brands, and the clients of ours that have what are perceived to be strong brands in the marketplace will do very well in 2007. Conversely, companies that really don't have a brand, that have to compete on a commoditized basis, are still having a difficult time in the marketplace. Overall, our clients think it's going to be very positive in 2007.
David Reza: We have a fair amount of brands in our portfolio, and they're doing pretty well. They've been under pressure, but not as much as those who sell on price alone. We'll continue to see some price erosion for those people.
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