By  on July 27, 2005

NEW YORK — The Christmas season beckons retailers — even at the height of summer — with a multitude of challenges in a year that will seriously test them.

Retail consolidations and intensifying pressures on Wal-Mart, Sears, Roebuck and Co. and other low-priced mass chains, as well as Gap Inc., have changed the landscape. By the start of the season, Marshall Field's, Lord & Taylor, Neiman Marcus and possibly others, such as Carson Pirie Scott, will have new owners with Federated Department Stores Inc. taking over May Department Stores Co. and Saks Inc. selling off department stores.

High oil and gasoline prices, terrorism and concerns about job stability have coalesced, triggering declining consumer confidence last month.

Nonetheless, holiday assortments are planned, press previews are under way and merchandise will start pouring onto the selling floors in mid-October. The bigger push will be in November with pre-holiday sales, though The Neiman Marcus Group launches its over-the-top, ultraexclusive Christmas catalogue in September.

At many stores, last year's explosion of color, cashmere, denim and luxe has been reined in and refined — it's about a fusion of luxe looks with casual; lifestyle items; velvets; metallics; quirky, fun accessories with a lot of shine, gold and bronze, and a return to black dresses.

Retailers selling fashion are not anticipating huge holiday gains — several see low- to midsingle-digit comp-store growth. However, they are hoping for decent business, largely because of progress attaining more sophisticated and differentiated styles, and trends suggesting consumers are more willing to spend on apparel and accessories, having already bought their iPods and computers.

Christine Augustine, retail analyst, Bear, Stearns, said she was "cautiously optimist" about holiday and noted that Wal-Mart Stores Inc. has been working to improve apparel and electronics, which could see a lift this year after flopping last holiday, while seasonal bedding, pet supplies, domestics and paper goods did well.

Augustine foresees fewer tactical errors on the marketing side at Wal-Mart, including a return to product-focused advertising, and fewer image campaigns, with hipper ad spots broadcast on the coasts and more traditional ads for the Midwest and the South. Wal-Mart went soft in price promoting after Thanksgiving last year, and suffered as a consequence.The $285 billion company has launched a public relations counteroffensive after coming under attack for its levels of employee benefits and other issues. And it is fighting the perception that its chief rival, Target Corp., is hipper and more fashion focused. Target, Augustine said, did well in jewelry and accessories last year, though apparel was not a standout and could come back stronger in apparel and electronics, as well.

China's 2.1 percent revaluation of its currency last week and the decision to peg the yuan to a basket of currencies rather than the dollar isn't expected to have a major impact on the season.

For Saks Inc., criminal and civil investigations into its chargeback and accounting practices loom large.

Gap Inc. is struggling with poor sales trends and has been criticized for missing trends and lackluster merchandise. Its recovery plan involves renovating stores, shifting from its historical emphasis on sportswear by adding space for petites, accessories, jewelry and personal care, and this fall launching another division, called Forth & Towne, to capture an older demographic.

"I see no reason why the consumer won't be strong for holiday, given the 3 percent growth in real disposable income we are seeing right now and provided the housing market hangs in with 2 percent real interest rates for mortgages," said Bob Buchanan, senior retailing analyst, A.G. Edwards. "I'm thinking 4 to 5 percent comp-store gains for Christmas. It will be a very respectable Christmas.

"However, I certainly would not want to be at the low end. Stores such as Wal-Mart, Family Dollar and Dollar General will continue to struggle due to high gas prices and the continued migration of factory jobs to the Pacific Rim," he continued. For stores ranging from J.C. Penney Co. Inc. to Kohl's Corp. and up to Neiman Marcus, there's a more favorable outlook, Buchanan said.

"Wal-Mart really does get affected by gas prices more than other retailers," said Robin Lewis, president of the strategic consulting firm bearing his name. "Target can feed off a higher income group." He added that Wal-Mart's apparel upgrades may not kick in soon enough for the chain to benefit this holiday.One department store chief executive, who asked not to be identified, suggested holiday comps for the sector would be in the low-single-digit range, at 2 or 3 percent. Andrew Jennings, president of Saks Fifth Avenue, was less specific, projecting single-digit gains. "We're put in a lot more preparation" than last year, Jennings said. "We are feeling positive about the season."

Total sales growth for the nation is expected to fall short of last year for the fourth quarter, but not by much. "We are predicting about a 5 percent growth in total sales, which is good," said Tracy Mullin, president and ceo of the National Retail Federation, which hasn't yet forecast specifically for the holiday season. For holiday '04, there was 7 percent growth," Mullin said.

"We are bullish on apparel and accessories," Mullin added. "We think it will perform well through the year. Retailers are making a very concerted effort to differentiate merchandise and look different from competitors. It's beginning to pay off." Back-to-school apparel, so far, has performed well, she added, though total numbers on apparel are pretty much flat with a year ago. "I don't think it looks bad at all."

For retailing overall, the gift card trend keeps evolving, pushing more business into January, and online is an ever-increasing part of the picture, cannibalizing some comp business but pushing up total sales.

Holiday 2005 will be about outfits that mix luxe appeal with casual items, such as fancy velvet evening tops and fur shrugs that work with embellished denim jeans. Items such as fur trapper hats, hoodies, exotic skins and fancy flip-flops demonstrate retailers are willing to get fun and quirky with unusual silhouettes and fabric mixes that don't reach too far for fashion flair.

The season also will feature logos with a bit of flash, and velvets. Metallic tones, particularly gold and bronze, and unusual sizes and silhouettes permeate accessories. More than ever, retailers are hyping exclusive looks they say hold the key to a successful season.

"It's about fusion — logos with fur, activewear with luxe, denim with embellishments, velvet jackets with lace camisoles — and taking one lifestyle and blending it with another," said Nicole Fischelis, vice president and fashion director for ready-to-wear, Macy's East. "There are two sides to it: a casual attitude in a very luxe way."Fischelis, a native Parisian, characterized the season's mood as "après-ski" and showed off items to explain the look, including cableknit sweaters, cashmere sweaters and snug winter white quilted jackets.

"It's about casual opulence," said Stephanie Solomon, Bloomingdale's operating vice president and fashion director, women's rtw. She cited the use of velvet in women's and men's wear, rich colors and beadwork and, like other retailers, also suggested that the program for Christmas is different, but not a complete abandonment of last year's offerings. Cashmeres, denim, brights and shine will still command a good chunk of floor space.

"The subtle, shrunken velvet jacket is a must have," Solomon said. "It works with your favorite jeans. It works over anything. We also love velvet in dresses and accessories, and the proliferation of beadwork on knits and tops. There's a more neutral color palette, which makes the beadwork more discreet."

She also said embellished jeans, while important to the presentation again this year, have shifted to a more subdued look with embroidery and studs, rather than shiny beads. However, "there is nothing sleeker than a little black dress. It's back in fashion."

Robert Burke, vice president and senior fashion director for Bergdorf Goodman, said, "We are seeking things toned town. We saw a lot of color last year. This year, it's a lot of metallics, black, rich browns and jewel tones. We still see ornamentation, bit it is more monochromatic."

He said Bergdorf's, for the past three years, has intensified efforts to be recognized as a gift store, and one that offers exclusive products in a range of prices, from a Darby Scott semiprecious stone handbag with metal casting for $110,000 or an actual stuffed zebra by Deyrolle, a Parisian taxidermist, for $27,500, to private label cashmere socks for $80, or crocodile iPod cases for $295.

J. Crew Inc. is offering a limited-edition cashmere cardigan with a fur-trim collar. "It reminds you of your grandfather's sweater. It's cozy and big," said Margot Brunelle, head of J. Crew marketing. For the cashmere assortment overall, Brunelle said: "I like to think of it as a new generation of cashmere, with new silhouettes, and also limited-edition items."She also said J. Crew will be offering newness in some fabrics, including introducing tartan plaids, and authentic Scottish tweeds.

Brunelle sounded a familiar chord for the season, saying, "You'll see the juxtaposition of casual dressing with luxury dressing, so your favorite pair of chinos, which is in a new, sexier fit, [is] paired with a more luxurious fitted tweed blazer and silk camisole underneath." The company also has a wait list on some more exclusive items, such as a mink purse with a chain handle for $495, shown in an editorial shot for Elle's July issue, and a cardigan with a fur-trim collar, for $395, shown in Shop Etc.

Saks Fifth Avenue will be reviving some of the elements of last year's campaign, including the giant snowflakes on the facade of the Fifth Avenue flagship, and the snowflake shopping bags. The company is offering more exclusives, including Neil Lane celebrity jewelry featuring vintage diamond jewelry. Among the exclusive products exhibiting that relaxed-luxe look are Jimmy Choo flip-flops or Gypsy Couture wrap dresses, as well as a full assortment of fur hats and fur hoodies, from brands such as Cassin. "It's not the basic trapper," said spokeswoman Leslie Langsam. "It's a functional trapper or baseball caps with fur ears. There's a little glitz and a little glamour. It's not going away."

Saks seeks to cash in with its Wild About Cashmere promotion, which commences in September and will run through holiday. The store also has taken the black dress to a new level, for example, offering a Donna Karan cashmere sequined dress for $1,250.

At Sears, Roebuck and Co., "we believe this holiday season is even more so about luxe and we will be featuring metallics, velvet, faux fur and luxe fabrics in apparel, footwear and accessories," said spokeswoman Lee Antonio. "It's all about shine" in apparel or in jewelry, or even western boots done in a leather bronze color. "This whole luxe and shine concept is being applied to everything."

Citing some seasonal shifts, Limited Brands Inc. reported: "Black is reborn in velvet, satin and lace. Everything is rich in luxury, accentuated through texture, jacquards, fur and embellishment. The color palette includes deep, rich and saturated jewel tones of garnet red, vivid violets and chocolate brown. Metallics are extremely important in authentic shades of muted gold, bronze and gunmetal."The specialty retailer also cited "luxurious sweaters in graphics, crochet, cables or featuring pointelle stitches, along with a sexy bustier worn with embellished denim for the holiday party. Other key looks include silk charmeuse wrap tops paired with velvet trousers and lacy, Victorian-inspired tops mixed with clean, modern trousers.

Lavelle Olexa, Lord & Taylor's senior vice president of fashion merchandising, said, "We see Christmas 2005 as an opulent season rich in color and texture with an abundance of all kinds of embellishment: stones, sequins, trims, embroidery, patchwork. In ready-to-wear and accessories, velvet is newly important, and metallic, especially gold and bronze, are key," she said. "Denim continues to grow in importance, now with lots of embellishment or embroidered. Knits are strong, cardigans, camisoles, sweater jackets and, of course, lots of cashmere. There is also a warm and cozy trend with shearlings, faux and real, in outerwear, accessories and boots."

Holiday '05 Trends

  • Velvets and cashmeres.
  • Sophisticated, embellished denims.
  • Outfits with a fusion or casual luxe appeal.
  • Trapper hats.
  • Metallic tones, particularly gold and bronze.

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus