By and  on December 6, 1994

NEW YORK -- Many ready-to-wear makers project a first-rate year in 1995, bolstered by the momentum of dresses and the perceived value of suits.

Sales projections for the New Year range from single-digit gains to hikes of 20 percent or more.

Makers are most concerned about maintaining gross margin, particularly in the face of increasing pressure from department stores, and they are split on whether the economy will improve under the new Republican Congress.

Here, dress and suit executives discuss the overall outlook for their categories, as well as key issues facing the industry and the economy.

General projection for gains: 15-20 percent.

Hot Trends:

Shine.

Stretch.

Feminine details, such as dainty necklines, embroidery and soft silhouettes.

Multi-piece ensembles.

Forties influence.

Clean, simple styles.

Key elements:

Versatility.

Value -- at all price points.

Maintaining the momentum generated by dresses this year.

Creating classics, not overly trendy merchandise.

Cost containment.

Dealing with department store consolidation.

Based on peppy spring bookings at regional markets as well as this year's in-store performance, executives say 1995 is shaping up as a strong dress year.

Dresses are expected to continue their momentum into next year because they are a solution when women don't want to wear a suit or separates, say makers. Another plus is that they can be either dressed up or worn more casually, to meet a variety of end-uses.

Suits are also doing well, and should continue their stride into 1995. The keen focus by consumers on value makes a suit -- at one price for two pieces -- a good buy. The highly promotional nature of the business, however, could have a dampening effect on profits for makers, even though sales are good.

Based on vigorous momentum this year, Tom Murry, president of Tahari Ltd., projected a 33 percent increase for 1995 in its branded divisions, an estimate he called "conservative."

"It's very unusual, but right now, all three of our businesses -- dresses, suits and sportswear -- are doing well," Murry said. "Usually, one category does well and the others don't."He attributed the solid performance to a strong perceived value among consumers and the sharp focus the company has taken over the past year.

"We have narrowed our sku's," he said. "Now the product is not as trendy. There is a timelessness about it, and each piece has a function."

Gregg Marks, president of the Sassco unit of The Leslie Fay Cos., said November was "fabulous" in the company's main label -- Kasper for ASL -- and a group of early spring suits has had 10 percent sell-throughs in each of its first three weeks at retail.

Key items at retail and in the showroom are small-check suits, triacetate crepe pantsuits, four-piece wardrobers and two-tone brights. Marks projected an increase of 20 percent in suits and 25 percent in dresses.

The Sassco unit will have sales of about $360 million this year. As reported, its chairman, Arthur Levine, is trying to buy the company back from its parent, Leslie Fay, which is struggling to emerge from Chapter 11. The firm was forced into bankruptcy in 1992 after it revealed that an accounting fraud had misstated earnings from 1990 through 1992.

"Dresses and suits are in a good cycle right now," Marks said. "New looks are selling, but so are basic repeat bodies."

Harriet Mosson, president of the dress and suit unit of Liz Claiborne, said that after two years spent revamping the division's design and marketing concept, it's back on track and primed for strong increases. As reported, the division has been split into three groups -- Collection, Night and Liz Now -- each comprising dresses and suits.

"We're sold out for spring I on Liz Now and Collection," Mosson said. "For spring, shape and movement in silhouette and fabric are key elements. Our biggest challenge is to offer a real value to the consumer, and classics are going to be an important part of the business. The key is in making those looks modern with special trims and treatments."

Mosson said sourcing is critical in dresses right now, in maintaining price and meeting deliveries. Last year the company started producing dresses domestically and in 807 programs, and expects that to increase next year. The new closer-to-home sourcing has helped the division establish an in-stock program of basic styles that stores can reorder quickly.Jeffry Aronsson, chief executive officer of Oscar de la Renta, said fall and holiday business is 25 percent ahead of last year's, and early indications show spring bookings slightly ahead.

"The increase in interest rates notwithstanding, we're encouraged that it's going to be a good year," he said.

Aronsson said international expansion will be a key component for the company in the year ahead. The first two Oscar de la Renta stores opened in Hong Kong last month. They initially are carrying men's tailored clothes, but women's wear will be added shortly, Aronsson said.

Next on tap: a London boutique, scheduled to open next September, followed by shops in Australia, Geneva and Monte Carlo. Aronsson said the company's Latin American business is also growing.

Bud Konheim, president of Nicole Miller, said 1995 "looks strong out of the gate," based on a big pickup since November at the firm's chain of 21 boutiques and robust wholesale bookings for spring.

Konheim said he plans a 20 to 25 percent increase in the first half.

One problem he's encountering is getting enough piece goods to fill the surge in orders.

"What I'm doing is overordering, figuring I'm going to be shorted by a lot of the mills," Konheim said. "The stores should also be looking to increase inventories as business picks up, to avoid running out of goods."

For spring, hot looks are shiny satins in rayon or silk, sometimes blended with Lycra spandex. Miller's signature prints, A-lines, Empires and other shaped silhouettes are also doing well.

Jon Levy, president of the Gillian Group, said he's getting mixed signals for business next year.

"There are pockets of good business," he said, "like eveningwear, social and suits. But career clothing is a disappointment."

Levy said he plans business to be flat or up about 5 percent, based on the softness of career, but that the evening, social and suit businesses would be ahead.

Morris Marmalstein, president of The Warren Group, said he is optimistic about 1995, noting that recent business at regional shows has been on the upswing."There's a lot of business to be done at all price levels," he said. "Our lower-priced DW3 updated line and David Warren traditional dress line are doing well, as are our Morton Myles and Rimini higher-priced social lines. The consumer looking for good value, at all price points."

Marmalstein added that there is a resurgence in the day dress business, and "the loud and clear message is that sportswear has slowed and we're continuing in the dress cycle."

Harvey Berkman, president of Adrianna Papell, said the first half of the year accounts for 70 percent of the firm's business. Papell saw its volume rise to about $60 million this year -- a 35 percent increase -- and spring bookings are up 10 to 12 percent.

"As long as price continues to be an issue, however, it will negatively impact the initial gross margin," Berkman said. "For 17 years we've been able to maintain the integrity of our product without raising prices. But that's becoming more and more difficult. It's become chic to be price-oriented. Consumers are making the stores aware of that, and the stores are putting constant pressure on the manufacturers."

Berkman said the company's new eveningwear division will have sales of about $15 million in 1995.

"Our goal is to expand the division into a major social occasion dress and suit line," Berkman said.

Beau Baker, a partner in the dress firm Expo, said dress business is healthy and his company plans a 10 to 15 percent increase for 1995.

"The last key trend was the vintage look," he said, "but it's been a few years since that happened and the customer is ready for something new."

Baker said shape and fabric will be what propel the dress market next year. There will be a move toward short and A-line silhouettes done in new fabrics such as knits blended with Lycra and new looks in prints -- particularly in the spacing of patterns.

Marvin Singer, chairman of Depeche Mode Inc., said the first half is always a key period and first-quarter bookings are up slightly.

"The word for 1995 is focus," Singer said. "Specialty stores in general are outperforming department stores, at least in dresses, because they are focused, and offer proper service."The company's Scaasi Dress line held its own this year and should be on track for a better year in 1995, while its Constance Saunders division is looking for growth in a new private label program. The company's real growth potential, however, is in its Depeche Mode private label division, which will have sales of about $60 million in 1994.

Helen Merrill, president of the Rena Rowan for Saville dress division of the Jones Apparel Group, concurred that dresses will be strong heading into 1995. Bookings for resort and spring have been vigorous; the line just started shipping for fall 1994.

"The major growth is in two-piece dresses, because of the versatility and ease of dressing," Merrill said. "Dresses that are not strictly daytime, and that can be worn for a variety of purposes, will do best. And suit ensembles are important because they represent value to the consumer.

Rowan spring dresses offer more shape, falling just above the knee or at the ankle, Merrill said. Bright colors, fitted jackets, boleros and treatments like embroideries, satin trim and special buttons are important.

Robert Adler, chairman and ceo of the Halmode division of Kellwood Co., said dress and suit business has been strong in the third and fourth quarters. He expects that momentum to continue.

"Dresses and suits are stealing market share from career sportswear because they offer better value, and it's also an easier way for women to dress," Adler said. "First-quarter spring bookings are 15 to 20 percent ahead in all our divisions -- MHM/Sunshine Starshine, Plaza South and Vintage Dress. We're very positive for 1995."

Adler said a variety of dress lengths and looks are selling. In addition, a new generation of working women are turning to suits as a more practical and affordable alternative to sportswear separates.

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