While department store better floors sputter because of the recession — even losing space to moderate lines — companies hope a stream of launches and relaunches, plus lower prices, will help jump-start the sector.
Although observers agree the pricier better market has been especially hard hit — with orders depressed by 20 to 30 percent — particularly in February, March started to deliver bright spots. The key is delivering the better customer what she wants: items instead of collections, multipurpose career-to-casual pieces, seasonless fabrics, higher value at sharper price points, upbeat colors, tops more than bottoms, slenderizing technology and professional tailored looks.
“Throughout 2008 we saw a lack of sales growth in better, so we reacted and planned those businesses down accordingly [by the same percent of previous decrease] in the fourth quarter and into 2008,” said Tony Buccina, vice chairman and president of merchandising at The Bon-Ton Stores Inc. “But we did see some increases in moderate price points, and we moved our investment to those areas in 2009 — that’s where we’re seeing the business move until the market corrects.”
Belk saw a similar trend of moderate outperforming better. “The whole better category has been challenged, as the higher price points have been a challenge,” said McKay Belk, president and chief merchandising officer of Belk Inc., adding the better department’s modern offerings were outselling traditional.
“Clearly sportswear has been difficult for some time now, but it’s showing relative signs of life this quarter,” said Lord & Taylor chief executive officer Brendan Hoffman. “As spring deliveries hit the floor with brighter colors, lines like Lauren and Kenneth Cole are looking bright and customers are responding.”
Meanwhile, better brands — from Calvin Klein to Nine West to Rafaella and Kenneth Cole New York — are trying to compete in this economic environment by lowering their prices, or at least their opening price points, by 10 to 30 percent. “Everyday value” items that are on the low end of the price range even without promotions are frequent bestsellers.
Hoffman said the promotional level was still higher than he’d like to see for spring, but “inventory levels are more in line than they were in holiday, so it’s less about trying to work down the inventories and more about working around customers’ expectations — everyone wants to know they are getting a value.”
“Better is probably struggling a little more than moderate because this customer has really been hit harder than anyone else,” said Andrea Goldreyer, better analyst for the Doneger Group. “But the better market for fall has worked to address what’s happening in the real world by going after items rather than collections.”
Goldreyer said even brands normally focused on collections have shifted to having key items make up 45 to 60 percent of their overall assortment. Adrienne Vittadini, which relaunched for fall 2008, is an example, shifting from collection mode to key-item mentality for fall 2009.
“Even if the economy hadn’t been so tough, it would have been tough for us because we weren’t on the right track,” said Mary Gleason, president of Adrienne Vittadini. “We started the relaunch with head-to-toe dressing, but for fall we really want to shift to modern separates. We’re hearing from retailers that they want separates. We’re now making great pieces, so if a customer comes in and sees an outfit on a mannequin, they can just buy a piece to add to their existing wardrobe.”
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