Retail sales of intimates picked up in March and April as merchants began replenishing inventories, but industry executives were troubled at this month’s market because of persistent clouds hovering over the economy.
Their worries focused on chronic high unemployment, the need for increased consumer spending to sustain growth and the end of the government’s economic stimulus package.
The major share of orders will not be completed until mid- to late June, primarily because retailers are keeping a tight rein on inventories and are basing future buys on key items and programs that are performing well at stores this spring.
Vendors showcased foundations for spring 2011 during market week, as well as daywear, sleepwear, robes and loungewear for fall and holiday selling, along with immediate merchandise.
The anxiety level was heightened by lackluster sales for Mother’s Day, a harbinger for retail buyers because it is the third most important gift-giving holiday for innerwear after Valentine’s Day and Christmas. Executives are concerned that low- to midsingle-digit gains against dismal year-ago results could affect buyers’ decisions as they look to restock.
And memories are fresh of consumers who recently opted out of big-ticket items such as luxurious peignoir sets and robes in favor of less expensive options such as slippers, and bath and body products, executives said.
Few companies cut to order, and as a result, the industry continues to face the challenge of forecasting and sourcing product within a tight window of four to six weeks. As many retailers delay final buys, manufacturers often don’t know whether they will overcut or undercut product that is not on replenishment.
The situation is particularly difficult for companies that sell cotton goods that are sourced and manufactured in India and Pakistan and elsewhere in Asia. Foreign factories are said to be pressing for shorter lead times since the price of cotton jumped 93 percent over the past year to 74.35 cents a pound, according to WWD’s Fiber Price List.
Shorter lead times for deliveries also are forcing vendors to contend with higher air freight prices. Yossi Nasser, director of Gelmart Industries Inc., said for the past several months the company has been “spending at least four times the cost to airfreight molded, full-figure bras” to retail chains. “It’s very expensive because you can’t stack molded bras on top of each other. They take up a lot of space.”
Assessing the retail environment, Arnold Aronson, managing director of retail strategies at Kurt Salmon Associates, said stores “restocked inventories at substantial decreases last year, and are now stocking conservatively.”
Stores “are watching current inventories like a hawk and are building expectations very conservatively,” he said. “There’s still enough raw scar tissue out there where retailers are not going over budget. They are staying within budget, sacrificing any surprises they could get in good business by not being surprised by bad business and taking bad markdowns. New assortments are being planned based on close facts instead of future hopes.”
Jonathan Greller, senior vice president and general merchandise manager of men’s, children’s and intimate apparel at Lord & Taylor, said, “Mother’s Day [intimates sales] picked up 5 percent and we’re up 6 percent for the season to date. It’s good, but our company is up 14 percent for the season.”
Despite the caution and concerns, there are indications of a rebound, executives said.
“Stores are still playing it safe, but they are definitely more open to new ideas and opportunities,” said Michael Herman, senior vice president of sales, merchandising and production at the Natori Co. “We focused on chasing different opportunities and marketing at this market with catalogues and more gift ideas that will entice consumers for holiday.
“We continue to see the same thing — a price-value relationship,” he said. “Customers will spend the money, but they definitely want a value. There was a slight bump in Mother’s Day business last year, but this year it wasn’t much higher. Mother’s Day is not the seminal holiday it used to be.”
Chronic high unemployment remains a major obstacle. “We are up for the season to date, but we are still [optimistic but careful] because of the jobless rate,” said John Brody, executive vice president of sales and licensing at Jockey International. “There’s more stability but there’s still that uncertainty out there. For Mother’s Day, there seems to have been less of a peak. Business for the week before Mother’s Day was up just slightly over last year. This year, there was more of a focus of consumers buying for themselves. Because of the economy, they had bought less for a period of time.”
Specialty retailers said Mother’s Day business was better than last year, but a lot of purchases were impulse buys.
“We had a pretty good Mother’s Day, but not for Mother’s Day gifts,” said Zequel Hall, manager of Night Gallery, a lingerie, apparel and accessories shop in Chapel Hill, N.C. “A year ago, it was a lot more mother oriented with people saying, ‘I need a gift for my mother or grandmother.’ Not this year. I think people are starting to want something for themselves because they’ve been so cautious and feel deprived.”
Barbara Graves, owner of a namesake boutique in Little Rock, Ark., said, “Mother’s Day is not what it was 10 years ago, when all of the models’ coats and robes were sold out. But we now have the young moms who want sassy, hip items like cami tops and pajamas by PJ Salvage.”
Bob Vitale, executive vice president of marketing and sales at Wacoal America, said a new shapewear introduction received strong reaction: the i Pant, a long line shaper of microfiber and spandex fibers encapsulated with cosmetic ingredients, including aloe vera, retinal, vitamin E and caffeine. The suggested retail price will be $60.
“It’s part of our anticellulite program,” he said. “It’s an exclusive fabric for Wacoal in the U.S. [for a period to be determined]. It has a clean laser-cut waist and legs and 40 percent of the encapsulated ingredients stay in the product after 100 washings.” The encapsulated ingredients help reduce “up to 2 centimeters off the thighs, and helps reduce the orange-peel effect of cellulite.”
Vitale acknowledged that, “from a funding point of view, retailers are still playing it pretty conservatively. We have an idea about preliminary orders and it looks very positive, and we got a sense of how many doors and quantities, but everybody is still uncertain about the economic environment.”
Nasser of Gelmart Industries said a new launch of a full-figure shapewear brand called Body Naturals was well received. “We are going after regional stores, such as Boscov’s and Meyers, as well as barenecessities.com, Freshpair.com and Herroom.com,” he said. “The line is aimed at the 25- to 45-year-old customer.”
Six bra styles, size 36C to 46DD, will retail from $18 to $24; shaper bottoms, size medium to 3X, will be priced from $16 to $28, and coordinating undies will run for $9 to $10.
Maureen Stabnau, senior vice president of merchandising at barenecessities.com, described the Body Naturals line as having “a lot of potential.”
“They did a very nice job of making a classic product look contemporary and very clean, but we have not yet decided,” she said.
Regarding market week, Stabnau said: “Vendors worked very hard for the retailer and consumers, because they realize every cent counts right now.”
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