NEW YORK — Vendors not only are keeping a wary eye on Federated and May to see if they become one, they’re slogging their way though what turned out to be a difficult end to 2004.
There also might be some cyclical factors, such as consumer need and inventory levels, that restrain vendors’ business in 2005.
Within the last week, Kellwood Co. and Jones Apparel Group warned their fourth-quarter earnings would come in well below projections. Both attributed the shortfalls to higher-than-expected sales to the off-price channel and steep markdown payments.
Kellwood said earnings from continuing operations for the quarter ended Jan. 29 would fall to about $6.5 million, or 23 cents a diluted share. The firm had been projecting earnings of $13.7 million, or 48 cents.
Jones reduced profit expectations for its quarter ended Dec. 31 to 28 cents to 30 cents compared with the 40 cents to 45 cents previously anticipated.
Conditions might continue to be difficult for the firms.
Merrill Lynch analyst Virginia Genereux in a research note Monday recommended that investors take a “relatively defensive posture toward” branded apparel stocks.
Genereux does not rate Kellwood, but does follow Polo Ralph Lauren Corp., Liz Claiborne Inc., Tommy Hilfiger Corp. and Jones. The analyst also downgraded Polo, suggesting the firm’s earnings expectations are too aggressive, and upgraded Claiborne on the strength of its portfolio of brands.
Branded manufacturers will continue to face cyclical head winds with difficult comparisons from the same-store sales, inventory and fashion perspectives, said Genereux.
“While several vendors and retailers talked last spring about a new era of ever-lean inventories, weaker outlooks from vendors including Jones, Oxford and Kenneth Cole reinforce our long-held view that retailers order product based on last season’s trends, setting up alternate years of lean and heavy inventories,” she said.
Vendors are going up against an especially active period last spring when a slate of better brands were introduced or relaunched, including Lauren by Ralph Lauren, Jones New York Signature and H Hilfiger.
“There were some genuinely strong sales in the better zone, and one question is whether that more mature female customer needs to replenish her wardrobe again for spring,” said Genereux.Many of last year’s launches were more fashion-forward, which could lead the trend to swing back too far the other way.
“It is possible we are now setting up for an excess of basic product, which could also contribute to an already likely scenario of weakish sales-excess inventory levels this year,” said Genereux.
Taking the final spot on the mens’ portion of New York Fashion Week calendar next month will be none other than @tomford. Though he’s shown his men’s wear in New York in the past, this will mark the first time the designer has shown his men’s collection alone during New York Fashion Week: Men’s. His runway show will debut on February 6 at the Park Avenue Armory. #wwdfashion
London-based couture house @ralphandrusso has certainly been in the spotlight, having its dresses worn by @beyonce, Angelina Jolie, Meghan Markle in her engagement photos and more. For couture, Tamara Ralph focused on ornamentation — think: feathers with chain mail, jet embroidery and clusters of pearls and crystals. See the rest of the collection on WWD.com #wwdfashion #couture (📷: @giovanni_giannoni_photo)
Minnie Mouse celebrated her 90th birthday by getting her own star on the Hollywood Walk of Fame. For her celebratory luncheon, @coach’s creative director @stuartvevers dressed her in a custom made prairie dress, complete with Vever’s take on the polka dot – black sequined versions – under a cropped motorcycle jacket. The designer also put his own mark on Minnie’s classic red shoes, infusing the color with sparkles and adding some Coach crystals. “We chose colors that were very Minnie and also represented quintessential Coach elements,” said Vevers. #wwdfashion #nationalpolkadotday (📷: George Chinsee)
@nickjonas is unveiling his first-ever apparel collection through a partnership with John Varvatos. The limited-edition capsule, which makes its debut in spring, also marks the first time the designer has collaborated with anyone on a line. “The process in working with Nick is amazing. It’s inspiring to be around someone who is not only connected with the trade that they do, but also with what’s happening in the environment around him, and how that connects to what we do with style,” said Varvatos. (RG: @johnvarvatos) #wwdfashion
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)