By  on September 21, 1994

NEW YORK -- To maximize sales and develop better business partnerships with vendors, department store chains, including May Department Stores Inc., Mercantile Stores Co. and Dayton Hudson, are aggressively narrowing their list of swimwear resources.

The move troubles many small resources, which claim that it will lead to cookie-cutter swimwear departments that lack fashion newness.

Here, a look at a few retail developments.

May Department Stores Inc., which has been narrowing its vendor lists, appears to be getting more aggressive. In early June, it invited about seven top resources, including Mainstream, Jantzen, Gabar, Baja Blue and La Blanca, to May's St. Louis, Mo., headquarters to discuss buying strategies for the cruise season. "It appears that they are taking it one step further," said one resource, who was at the meeting, but wanted to remain anonymous.

Belk Store Services, based in Charlotte, N.C., is giving its buying office here more clout. Its buying division is developing major programs with six of the largest swimwear manufacturers and is now recommending to its individual buyers how they should buy, according to sources.

Starting this past summer, Mercantile Stores Company Inc., Fairfield, Ohio, narrowed the number of vendors to eight from 25. Some of the key vendors include Jantzen, Robby Len and Baja Blue.

"The swimwear departments were a little cluttered, and we were just doing business with too many vendors," said Rickey Heaton, corporate buyer for Mercantile, which operates 101 stores. "We wanted to develop partnerships with vendors and deliver more meaningful statements within our departments."

"The strong swimwear resources are going to survive, because department stores are going with the winners," said Howie Greller, executive vice president of Carson, Calif.-based Beach Patrol Inc., which produces Baja Blue, Tango Rose, Daffy Waterwear, Rebel Beach, Amber Bay, Swim Systems, Daffy Girls and Baja Blue Men's. As one of department stores' favored resources, it has seen bookings up 35 percent for the cruise 1995 season. "But inherently, there is a danger in all of this. By narrowing the vendors, they are ultimately hurting the consumer, who wants newness and fashion in the department stores," said Greller.Dayton Hudson Corp., based in Minneapolis, don't buy swimwear from a matrix, but the store has been narrowing down its resources in the past few seasons, said Debra Aldredge-Remme, senior buyer, women's swimwear. In the past four years, the department store chain has cut its misses' labels from about 40 to about 25, she said.

Key resources at Dayton Hudson include Jantzen, Cole of California, Apparel Ventures, Calvin Klein, Sirena and Beach Patrol, she said.

"We like to keep [the swimwear selection] narrow and deep. We're very key-item oriented," she said. She added that Dayton Hudson will ask some manufacturers to make a design exclusively to meet a particular need -- an example from last season was a jogger one-piece, which grew to represent about 10 to 12 percent of the chain's total swimwear business.

The chain will buy from smaller manufacturers if they have something new and innovative in silhouette, color or marketing, which isn't covered by the bigger resources, she said. "They can't just have a great black suit," Remme added.

Carson Pirie Scott, based in Milwaukee, has been applying a vendor matrix to all areas of its business since emerging from bankruptcy last year, said Tony Buccina, senior vice president and general merchandise manager. The moderate department-store chain reduced its number of swimwear vendors by about 15 percent, he said, but he noted its vendor structure isn't as tight in swimwear as in other lines because it needs more variety.

Top vendors at Carson's are Jantzen, Robby Len, Sirena, Mainstream, La Blanca, Baja Blue, Harbor Casuals and Anne Klein, Buccina said.

But the chain also seeks out new resources regularly, as well as buying from the major manufacturers, he said. At Jackson, Miss.-based McRae's, a 28-unit department store chain, swimwear resources have been pared down to five to seven key vendors, including Jantzen and La Blanca, which represent the biggest percentage buy, according to Margie Erwin, swimwear buyer. In recent seasons, Sessa has also been strong.

"We're buying deeper and with more focus," she said. "It's been a trend over the past five years." Erwin said that such buying has led to working more closely in partnership with key vendors.Some department stores are taking the opposite approach, but they remain a minority. Gottex is the biggest swimsuit resource at Neiman Marcus, but the retailer also expects to build business with five other key resources and to continue to seek new lines. Neiman's also is banking on growing its coverup and accessories business.

"We had a really good season and had some big volume resources, but we want to test new looks and new resources to make Neiman Marcus different from the competition," explained Deborah Kaplan, vice president and divisional merchandise manager for leisure sportswear and swimwear.

"We plan to continue with Gottex, Viewpoint, Baja Blue, Harbour Casuals, Anne Cole and Gideon Oberson, which we've done well with, but there are many resources in the assortment," she added.

Neiman's beat its swimwear plan for spring and expects a gain next year too, though Kaplan declined to say how much. "The trends we feel good about are athletic styles and looks, color -- because there wasn't much color last year and now its a fashion trend -- as well as coverups and sportswear pieces to merchandise with the swimwear," she pointed out. "Sheer has been great, and we plan to continue with that."

Matrix buying isn't the way to go at J.C. Penney Co., either. The chain is adding two major brands for spring 1995 and hasn't eliminated smaller resources.

"We've taken a position where next year we will not reduce the number of suppliers and cut smaller people just to concentrate on the bulk of the business because we feel the department can lose the excitement and character that all the different brands bring to the table," said Beverly Anderson, swimsuit buyer. "We want to make sure there's a breadth of assortment, and everything that is important in the market is represented on the floor in not just one but several ways."

She said it was too early to reveal the two new national brands that will ship to Penney's stores in January.

Coming off a strong swimsuit year with a gain of 10 percent, Penney's is aiming to boost the category again next year with an 11 percent sales hike. "Our four regional planning managers feel very strongly about swimwear," Anderson pointed out.The company is willing to look at smaller resources, but is always concerned that they will have the financial backing to produce and ship the goods. Penney's also prefers to communicate with suppliers via computers, though that isn't an absolute requirement.

These stores, however, are the exceptions, and many small vendors, which are trying to crack into department stores, are troubled by the increasingly tight environment.

Many smaller vendors see the matrix system as an exclusive club, whose membership rules are elusive -- short of being a kind of birthright."It's like getting season tickets for the Dodgers -- you have to inherit your spot," said Holly Berman, national sales manager of Los Angeles-based Bare Nothings Inc. The company, in business about 20 years, manufactures a junior line (suits average $26.50 wholesale) and has "inherited spots" on several matrix systems, but according to Berman, "some stores are a virtual impossibility."

"We are on a couple of different chains' matrixes, and we're working to get on others," said John Kermgard, vice president of Los Angeles-based Excelsior Inc., manufacturer of moderate-to-better Pierre Cardin (misses'), Beach Bay (misses' constructed), Bare Assets (junior) and newly added Nautilus. "This is a small industry, and to do enough volume to be considered a factor in this marketplace, you really do need the majors."

Added Kermgard: "If you're already in the stores and are in the top group, considered a major player, it's almost an automatic thing: You will go on the matrix. If you're a fringe vendor, you're not likely to have made that list."

For newer companies not in a store prior to its conversion to the matrix system, the odds of being added go down -- way down. "It's been very difficult to break in," said Toni Sutherland, president of Sea Jane Swim, a Los Altos, Calif.-based firm. The three-year-old company, whose contemporary junior line wholesales between $29 and $36, did a total volume last year of $250,000. "It's the first time in my 12 years in swimwear that I talk to a buyer and am told, 'You're not on the system? We won't see you."'Some vendors concede that the system has benefits to the stores and to the selected manufacturers on the swimwear matrix.

"In theory, the matrix system is good because it makes the stores more important to a few vendors; therefore, those vendors have got to make sure those stores are profitable," said Berman. "In reality, it creates a situation where stores and their suppliers are married to each other for perhaps unhealthy reasons," Berman said. "Stores go on the matrix to make sure they won't be overassorted or have too many vendors, so those vendors on the system will kill themselves to keep the stores profitable, which may mean getting more off-price, more in-season promotion, more advertising money or, ultimately, if they screw up, more markdown money.

"My problem with the system is that I feel it is the buyers' responsibility to look at everything," Berman continued. "At some chains, like Dillard's, buyers are not even allowed to look at you unless you're on the matrix. I think the matrix system totally prohibits what the fashion business is really about -- having newness and being competitive with other stores. If a store doesn't allow buyers to look at product that's not on the matrix, how can they compete with other stores that do?"

Those vendors interested in getting onto the majors' matrix systems often feel stymied. "I've always been into specialty stores, but at a certain point, as the line grows, I know I'm going to have to put a lot more energy and attention into getting on the matrix systems," said Toni Sutherland of Sea Jane Swim. "The problem is, buyers won't tell you how to go about incorporating into the system. I had one of my reps look into it, and it seems that you have to go through a main office in New York, and if you get acceptance there, then you go through some rigmarole to get on the system, and then you will be on the list given to buyers."

Excelsior's Kermgard suggested a few indirect tactics open to small vendors. "If the chain belongs to a buying office, and your name keeps coming up on the list of vendors that are performing well at other stores with that buying office, then they might want to talk to you," he said, adding that a strong marketing effort will help build the line's exposure. "We run ads in Redbook and Ladies' Home Journal, and we have a big spread in Seventeen, because sometimes you get a groundswell coming from the consumer," Kermgard explained. "We got thousands of letters and phone calls based on what they see in the magazines, and we tell them to go to the stores. We want them to walk into a department store with the ad and say, 'Where can I get this?' You can create a market for yourself like that; it's one of the things we've done to create more interest in our product."For Keiko, New York, a highly forward contemporary line, editorial exposure in the top consumer fashion magazines has been a plus. "Magazine exposure has a lot to do with the customer wanting a certain suit and going to look for it in the big store in her town," said designer/owner Keiko, whose 10-year-old company does about 70 percent of its business with department stores.

There's no discounting the longevity factor, either. "I really think the way to get on that list is to have proven retail performance," said Kermgard. "You have to prove yourself in the market for a while, and when the stores hear that there's a hot new line that's performing well, then they'll talk to you."

The bottom line is that vendors who believe in their product also believe it will eventually come to the attention of the majors. "Our objective is to put out the best product we can. At some point, department stores are going to realize that they're all carrying the same five lines and will notice us," said Patti Oblath, vice president of Cruz, a Santa Monica, Calif.-based company that makes junior, misses' and children's swimsuits. "That's already started to happen with our children's line, which is the fastest-growing aspect of our business now. Some of the big stores have called and expressed interest, even though we are not yet on their matrix."

Some vendors, however, are not as optimistic. "I think it's going to get worse in the future," said Holly Berman of Bare Assets. "I see a lot of stores getting taken over by conglomerates, so then there will be only two or three big ones out there, and it will be a very sad day in our industry when you cannot present your product and have it be critiqued and viewed for what it is."- with contributions from Holly Haber, Dallas, and Sophy Fearnley-Whittingstall, Chicago

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